Supreme Court of the United States
Free Enterprise Fund v. Public Company Accounting Oversight Board
June 28, 2010561 U.S. 477
Summary
The Court held that the Sarbanes-Oxley Act's dual for-cause removal protections for PCAOB members violate Article II's vesting of executive power in the President. The Court found the restrictions severable, allowing the Board to continue operating with members removable at will by the SEC. Justice Breyer, dissenting, argued the structure does not significantly impair presidential control and warned of broader implications for federal employees.
Holding
- Separation of powers/removal power. Dual for-cause removal restrictions on PCAOB members violate Article II's vesting of executive power in the President.
- Severability. The unconstitutional tenure provisions are severable from the remainder of the statute.
- Appointments Clause. Board members are inferior officers validly appointed by the SEC Commissioners.
- Jurisdiction. The District Court had jurisdiction to consider petitioners' claims.
Docket No. 08-861
Cited authorities
- 15 U.S.C. §§ 7211
- 5 U.S.C. §§ 554
- 5 U.S.C. § 556(a)
- 5 U.S.C. § 557(a)
- 15 U.S.C. §§ 7217
- 28 U.S.C. § 2201
- 5 U.S.C. §§ 2302
- 5 U.S.C. § 3302