A major test case on the power of the President to appoint and remove government officials apparently is on its way to the Supreme Court. On Monday, the D.C. Circuit Court split 5-4 in denying en banc review of a case challenging the constitutionality of a key provision of the Sabanes-Oxley Act, passed in the wake of the Enron and Worldcom accounting scandals. Lawyers for those seeking en banc review had said earlier that, if that move failed, they would then appeal to the Supreme Court.
The close division in the Circuit Court probably enhances the chances that the Justices would agree to hear and decide the case.
The test case is Free Enterprise Fund, et al., v. Public Company Accounting Oversight Board, et al. (Circuit docket 07-5127).Â
The 2002 law at issue was designed to protect investors from scandals involving publicly traded companies by regulating the firms that do their accounting. The law created the Public Company Accounting Oversight Board, a private board exercising government power; its members are not appointed by the President, and cannot be removed by presidential action. The board members are appointed by the Securities and Exchange Commission, which has limited removal power.
The Circuit panel that decided the case in August split 2-1 on Monday in denying panel rehearing. In the en banc Court, Circuit Judges Janice Rogers Brown, Merrick B. Garland, Karen LeCraft Henderson, Judith W. Rogers, and David S. Tatel voted against rehearing. Chief Judge David B. Sentelle and Circuit Judges Douglas H. Ginsburg, Thomas B. Griffith and Brett M. Kavanaugh supported en banc review. (Only the Circuit Court’s active judges voted on the question.)
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