Supreme Court hears arguments on constitutionality of Sarbanes-Oxley Act

[JURIST] The US Supreme Court [official website; JURIST news archive] heard oral arguments [day call, PDF; merit briefs] Monday in two cases. In Free Enterprise Fund and Beckstead and Watts, LLP v. Public Company Accounting Oversight Board [oral arguments transcript, PDF; JURIST report], the Court heard arguments on whether the Sarbanes-Oxley Act of 2002 [text] violates constitutional separation of powers by affording members of the Public Company Accounting Oversight Board (PCAOB) [board website] executive power while removing any presidential authority to control the exercise of such power. The law was passed in 2002 to reform business practices and prevent corporate fraud by overseeing the accounting industry and punishing corrupt auditors. The US Court of Appeals for the District of Columbia held [opinion, PDF; JURIST report] that the Act is constitutional because Congress is able to restrict the president's removal power in any way it "deems best for the public interest" and because the constitutional authority to appoint implies the authority to limit, restrict, and regulate the removal of such appointments. Counsel for the petitioners argued:

The board is unique among Federal regulatory agencies in that the President can neither appoint nor remove its members, nor does he have any ability to designate the chairman or review the work product, so he is stripped of the traditional means of control that he has over the traditional independent agencies.

On the other side of the balancing test, Congress provided no reason for stripping him of these traditional means of control.
Counsel for the respondent, the United States, argued that, "[r]esolution of this case follows from a simple syllogism and it is this: The President has constitutionally sufficient control over the [Securities and Exchange Commission]. The SEC has comprehensive control over the Accounting Board, therefore the President has constitutionally sufficient control over the Accounting Board." Counsel for the PCAOB echoed this point, arguing, "[t]he SEC has pervasive authority over every aspect of the board's operations. Board rules and sanctions have no effect, except as the SEC allows, and can be changed by the SEC at any time."

In Florida v. Powell [oral arguments transcript, PDF; JURIST report], the Court heard arguments on whether a suspect must be explicitly advised of his right to counsel during custodial interrogation and whether the failure to provide such advice violates Miranda v. Arizona [opinion text]. The case arose out of Miranda warnings given to a defendant that specified a "right to talk to a lawyer before answering any of our questions" and a "right to use any these rights at any time you want during this interview." The trial court overruled the defense lawyer's objection, holding that the warning was sufficient. The Florida Supreme Court reversed [opinion, PDF], finding the warning to be misleading enough to cause a reasonable person to conclude that he or she could only consult with an attorney before questioning. Counsel for Florida argued:
As Courts have recognized, Miranda warnings protect Fifth Amendment rights and promote voluntary confessions, confessions important to seeking truth, solving crimes, and securing justice. Yet the Florida Supreme Court erred in two ways to suppress a voluntary confession relied upon for Kevin Powell's conviction.

First, the Florida court misapplied the analysis. Rather than evaluating the warning under a reasonably conveyed standard for the right to an attorney, the court strictly parsed the warning, seeking certain words in a certain order.

Second, the court incorrectly found the warning to be misleading. The court ignored the totality of the warning. The court overemphasized the order in which the rights were given, and furthermore, the court applied a hypertechnical analysis of the warning's language.
Counsel for the US argued as amicus curiae in support of the petitioner. Counsel for the respondent, Kevin Powell, argued, "[c]learly Miranda could not have been more specific when it said, an individual held for interrogation must be clearly informed that he has the right to consult with a lawyer and to have the lawyer with him during interrogation."

 

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