Academic

Considerations of PCAOB

By Gordon Smith, Christine, Hurt, Vic Fleischer, Fred Tung, Lisa Fairfax, David Zaring

Rick Pildes has a well done take on one outlier issue here.  Orin Kerr thinks the Court will find the agency to be constitutional.  Scotusblog appears to concur, though it appears to hedge.  I gave the transcript a quick read, and, though I don't follow Supreme Court tea leaves closely, I do note that Scalia asked difficult questions of both sides, and that Kennedy seemed a little skeptical of the anti-agency crowd as well.  Scalia wanted to know if the SEC could pass a rule telling PCAOB to stop doing anything, and seemed pretty convinced that it could, which would suggest that he found the board to be analogous to a division of the SEC, which would, presumably, bring it closer to constitutionality, as the SEC itself has been found to be a constitutional limitation on the president's removal powers.

My own somewhat nihilist rule of thumb is that the modern Court will rarely get in the way of an important government program, but is happy to tread on symbolic ones (this rule of thumb is highly imperfect - the Court made the criminal sentencing guidelines advisory in the Booker case).  Eliminating an agency is a severe sanction, especially when the agency has a plausible claim to expertise, and an agency that specializes in accounting standards does, I think, have such a claim.  But the problem is that it has not been clear how much work the PCAOB is actually doing. 

Bonus: number of law review articles referring to "PCAOB": 1021.  Number referring to "PCOAB": 29, including the J Corp L, the Minn L Rev, and the Hastings L J, all of which have my sympathies.  Source: 12/7/09 Westlaw JLR

Full post as published by Conglomerate on December 07, 2009 (boomark / email).