Monday, October 30, 2023

Free Enterprise Fund and Seila Law

 Here is a quick summary (from Chemerinsky) on Free Enterprise, a case dealing with removal of Board members of the Public Company Accounting Oversight Board (PCAOB). 

"The members of the Board are appointed by the Securities and Exchange Commission and are removable by the Commission only for 'good cause.' The issue was whether this was constitutional in light of the fact that the president cannot remove Board members and can remove members if the Securities and Exchange Commission also only for 'good cause.' The Court held this unconstitutional and declared: 'We hold that such multilevel protection from removal is contrary to Article II's vesting of the executive power in the President....This contravenes the President's constitutional obligation to ensure faitghful execution of the laws.'"

And here is Cherminsky's executive summary of the Court's 5 to 4 holding in Seila Law:

In Seila Law LLC v. Consumer Financial Protection Bureau, the Court held in 2020 that having the Bureau led by a single director who cannot be removed by the president except for cause violated separation of powers. Chief Justice Roberts wrote the opinion for the Court...and narrowly to focus just on the unconstitutionality of limiting presidential removal in an agency headed by a single director. The Court stated: "We are now asked to extend these precedents to a new configuration: an independent agency headed by a single individual who cannot be removed by the President unless certain statutory criteria are met. We decline to take that step. While we need not and do not revisit our prior decisions allowing certain limitations on the President's removal power, there are compelling reasons not to extend those precedents to the novel context of an independent agency led by a single Director. Such an agency lacks a foundation in historical practice and clashes with constitutional structure by concentrating power in a unilateral actor insulated from Presidential control.

So, it looks like the current Court is more protective of the Constitutional command that  "The executive power shall be vested in a President of the United States of America. But Congress may still limit removal power in many cases when independence from the President is desirable. For now, at least.


 

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