Post by flatlander on Jun 29, 2010 9:52:24 GMT -5
Articles this morning in the Washington Post and Wall Street Journal discuss the potential implications to of the Supreme Court decision in Free Enterprise Fund v. Public Company Accounting Oversight Board to sitting ALJs.
I haven't read much more than the headlines, and since I am not a sitting ALJ, I'll just raise the issue and let the experts discuss amongst themselves ...
Here is a link to the articles:
www.washingtonpost.com/wp-dyn/content/article/2010/06/28/AR2010062804983.html
online.wsj.com/article/SB10001424052748703964104575334771098178714.html
A link to a .pdf version of the decision can be found here: www.supremecourt.gov/
Summary of the issue from the article:
The Sarbanes-Oxley Act, the heart of the government's response to accounting scandals at Enron and WorldCom, survived a Supreme Court test Monday almost unscathed.
But the 5 to 4 decision sowed doubts about the job security and legal authority of high-level government officials in agencies as varied as the Nuclear Regulatory Commission, the Social Security Administration, the Consumer Product Safety Commission and the Federal Trade Commission.
In its ruling, the court gave people and businesses regulated by such agencies ammunition to file lawsuits challenging their power, lawyers and scholars said.
The target of the plaintiffs in Free Enterprise Fund v. Public Company Accounting Oversight Board was the nonprofit organization created in 2002 to oversee the firms that audit publicly traded companies. The plaintiffs argued that the board's setup violated the separation of powers by giving executive responsibilities to officials beyond presidential control.
The court said board members were too insulated from removal by the president. But, instead of throwing out the board or the entire Sarbanes-Oxley Act, as defenders of the law had feared, the court struck down only the part that said the Securities and Exchange Commission needs good cause to remove board members. The court said the SEC has the power to remove board members at will.
"The consequence is that the Board may continue to function as before, but its members may be removed at will by the Commission," Chief Justice John G. Roberts Jr. wrote for the majority. "With the tenure restrictions excised, the Act remains 'fully operative as a law,' " he wrote.
Breyer's dissent
The dissenting justices, in an opinion written by Justice Stephen Breyer, said that supervision of the accounting board “violates no separation-of-powers principle," and said the court's majority opinion questions the constitutional status of many government officials. The dissent warned that the decision could put at risk "administrative actions and decisions" by senior officials in similar positions at other federal agencies, including the Nuclear Regulatory Commission, Social Security Administration and Federal Trade Commission.
“Reading the criteria as stringently as possible,” he wrote, “I still see no way to avoid sweeping hundreds, perhaps thousands of high level government officials within the scope of the court’s holding, putting their job security and their administrative actions and decisions constitutionally at risk.”
In response, the majority opinion says "the dissent fails to support its premonitions of doom." ... "Nothing in our opinion,therefore, should be read to cast doubt on the use of what is colloquially known as the civil service system within independent agencies. fn 10"
[fn 10 content]
"For similar reasons, our holding also does not address that subsetof independent agency employees who serve as administrative lawjudges. See, e.g., 5 U. S. C. §§556(c), 3105. Whether administrative law judges are necessarily “Officers of the United States” is disputed. See, e.g., Landry v. FDIC, 204 F. 3d 1125 (CADC 2000). And unlike members of the Board, many administrative law judges of course perform adjudicative rather than enforcement or policymaking functions, see §§554(d), 3105, or possess purely recommendatory powers. The Government below refused to identify either “civil service tenure-protected employees in independent agencies” or administrative law judges as “precedent for the PCAOB.” 537 F. 3d 667, 699, n. 8 (CADC 2008) (Kavanaugh, J., dissenting); see Tr. of Oral Arg. in No. 07–5127 (CADC), pp. 32, 37–38, 42."
__________________________
So, what impact could this have? Is the SSA ALJ "independence" requirement and removal process easily distinguishable from the case here? Does the Administrative Procedure Act impact the analysis?
Now ... Talk amongst yourselves ... and have a great day!
I haven't read much more than the headlines, and since I am not a sitting ALJ, I'll just raise the issue and let the experts discuss amongst themselves ...
Here is a link to the articles:
www.washingtonpost.com/wp-dyn/content/article/2010/06/28/AR2010062804983.html
online.wsj.com/article/SB10001424052748703964104575334771098178714.html
A link to a .pdf version of the decision can be found here: www.supremecourt.gov/
Summary of the issue from the article:
The Sarbanes-Oxley Act, the heart of the government's response to accounting scandals at Enron and WorldCom, survived a Supreme Court test Monday almost unscathed.
But the 5 to 4 decision sowed doubts about the job security and legal authority of high-level government officials in agencies as varied as the Nuclear Regulatory Commission, the Social Security Administration, the Consumer Product Safety Commission and the Federal Trade Commission.
In its ruling, the court gave people and businesses regulated by such agencies ammunition to file lawsuits challenging their power, lawyers and scholars said.
The target of the plaintiffs in Free Enterprise Fund v. Public Company Accounting Oversight Board was the nonprofit organization created in 2002 to oversee the firms that audit publicly traded companies. The plaintiffs argued that the board's setup violated the separation of powers by giving executive responsibilities to officials beyond presidential control.
The court said board members were too insulated from removal by the president. But, instead of throwing out the board or the entire Sarbanes-Oxley Act, as defenders of the law had feared, the court struck down only the part that said the Securities and Exchange Commission needs good cause to remove board members. The court said the SEC has the power to remove board members at will.
"The consequence is that the Board may continue to function as before, but its members may be removed at will by the Commission," Chief Justice John G. Roberts Jr. wrote for the majority. "With the tenure restrictions excised, the Act remains 'fully operative as a law,' " he wrote.
Breyer's dissent
The dissenting justices, in an opinion written by Justice Stephen Breyer, said that supervision of the accounting board “violates no separation-of-powers principle," and said the court's majority opinion questions the constitutional status of many government officials. The dissent warned that the decision could put at risk "administrative actions and decisions" by senior officials in similar positions at other federal agencies, including the Nuclear Regulatory Commission, Social Security Administration and Federal Trade Commission.
“Reading the criteria as stringently as possible,” he wrote, “I still see no way to avoid sweeping hundreds, perhaps thousands of high level government officials within the scope of the court’s holding, putting their job security and their administrative actions and decisions constitutionally at risk.”
In response, the majority opinion says "the dissent fails to support its premonitions of doom." ... "Nothing in our opinion,therefore, should be read to cast doubt on the use of what is colloquially known as the civil service system within independent agencies. fn 10"
[fn 10 content]
"For similar reasons, our holding also does not address that subsetof independent agency employees who serve as administrative lawjudges. See, e.g., 5 U. S. C. §§556(c), 3105. Whether administrative law judges are necessarily “Officers of the United States” is disputed. See, e.g., Landry v. FDIC, 204 F. 3d 1125 (CADC 2000). And unlike members of the Board, many administrative law judges of course perform adjudicative rather than enforcement or policymaking functions, see §§554(d), 3105, or possess purely recommendatory powers. The Government below refused to identify either “civil service tenure-protected employees in independent agencies” or administrative law judges as “precedent for the PCAOB.” 537 F. 3d 667, 699, n. 8 (CADC 2008) (Kavanaugh, J., dissenting); see Tr. of Oral Arg. in No. 07–5127 (CADC), pp. 32, 37–38, 42."
__________________________
So, what impact could this have? Is the SSA ALJ "independence" requirement and removal process easily distinguishable from the case here? Does the Administrative Procedure Act impact the analysis?
Now ... Talk amongst yourselves ... and have a great day!
