Monday, June 14, 2010

The Roberts Court and the Unitary Executive Branch View of the Presidency: When Will We Know?

Rick Pildes

One of the longest outstanding cases from this Term of the Court is the constitutional challenge, based on separation of powers grounds, to the Sarbanes-Oxley Act. As I've noted before, the case raises a host of fundamental questions about how much power the President has to have, constitutionally, over the organization of administrative agencies. At bottom, these questions reflect longstanding debates over what's known as the unitary executive branch theory of the Presidency, and it's the first major test of how the Roberts Court is going to view these issues. The case is also the most important in twenty years, since Morrison v. Olson upheld the Independent Counsel Act, on these general issues. When Congress enacted the statute, it was advised by constitutional and administrative law experts -- including by Elena Kagan, then Dean of Harvard Law School -- that the structure of SOX was constitutional. The lower courts agreed: the District Court upheld the Act, as did the 2-1 panel of the DC Circuit (and a 5-4 vote of that court denied rehearing en banc on the case).

If the opinion comes down today, the immediate question will of course be whether the Court holds SOX constitutional. But if it does not, I will be looking at a couple key questions. The challenge presents extremely broad and very narrow basis on which SOX is claimed to be unconstitutional. More than in most cases, the basis on which the Court, if it finds the Act unconstitutional, reaches its conclusion will be of great consequence. Second, will the Court's decision require Congress to revisit SOX, which will throw yet another significant policy issue onto Congress's plate? Or will any constitutional problem in the statute, if the Court finds one, be cured by the Court itself in its opinion -- if the Court, for example, finds that it can just sever any offensive provision? Third, how will the decision likely effect the current legislative plans, as part of the financial reform legislation, to put a new Consumer Financial Protection Agency inside the Federal Reserve Board? There could be direct implications for that important question.

Disclosure: As I've noted before, I am not a disinterested observer in this case. I filed an amicus brief on behalf of seven former SEC Chairmen defending the constitutionality of the Act.

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