Pildes scores amicus victory in vital separation-of-powers case

In a case before the U.S. Court of Appeals for the D.C. Circuit, Richard Pildes, the Sudler Family Professor of Constitutional Law, successfully represented the former chairmen of the Securities and Exchange Commission as amicus curiae. The former chairmen opposed the position of a pro-business conservative group arguing that the industry oversight board established by the Sarbanes-Oxley Act violates the Constitution's separation of powers because the board's members are not appointed or removed by the president and Congress does not control the board's budget.

In a 2-1 ruling, a panel of the court rejected the Free Enterprise Fund's argument, finding that Sarbanes-Oxley and the board it created are constitutional because board members are subject to direction and supervision by the SEC and do not have to be appointed by the president. The dissenting judge called the case "the most important separation-of-powers case regarding the president's appointment and removal powers to reach the courts in the last 20 years."  An appeal to the Supreme Court is likely.

Congress passed the Sarbanes-Oxley Act in 2002 following a spate of business scandals involving Enron, WorldCom, Tyco, and other companies.

Download the full decision (PDF)