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Limitations on Removal of Officials from Public Company Accounting Oversight Board Unconstitutional

By FindLaw Staff on June 28, 2010 | Last updated on March 21, 2019

Free Enterprise Fund v. Pub. Co. Acctg. Oversight Bd., No. 08-861, concerned an action against the Public Company Accounting Oversight Board and its members, seeking, inter alia, a declaratory judgment that the Board was unconstitutional and an injunction preventing the Board from exercising its powers.  The Court affirmed the D.C. Circuit's affirmance of summary judgment for defendants, holding that the Board's appointment was consistent with the Appointments Clause.  However, the Court reversed in part, on the grounds that 1) the dual for-cause limitations on the removal of Board members contravene the Constitution's separation of powers; and 2) the unconstitutional tenure provisions were severable from the remainder of the statute.

As the Court wrote:  "Our Constitution divided the "powers of the new Federal Government into three defined categories, Legislative, Executive, and Judicial."  INS v. Chadha, 462 U. S. 919, 951 (1983). Article II vests "[t]he executive Power . . . in a President of the United States of America," who must "take Care that the Laws be faithfully executed." Art. II, §1, cl. 1; id., §3. In light of "[t]he impossibility that one man should be able to perform all the great business of the State," the Constitution provides for executive officers to "assist the supreme Magistrate in discharging the duties of his trust." 30 Writings of George Washington 334 (J. Fitzpatrick ed. 1939)."

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