Agency Independence After PCAOB

30 Pages Posted: 9 Dec 2014

See all articles by Kevin M. Stack

Kevin M. Stack

Vanderbilt University - Law School

Date Written: July 1, 2011

Abstract

Many administrative agencies are vested with powers characteristic of all three branches of government — legislative, executive, and judicial. This combination of functions within administrative agencies has piqued the interest of students of separation of powers, but the Supreme Court has not seriously questioned it. This Essay, published in a Festschrift in honor of Paul Verkuil, argues that the Supreme Court’s decision in Free Enterprise Fund v. Public Company Accounting Oversight Board (PCAOB) makes constitutionality of statutory removal protections for agency officers depend in part on separation of functions within the agency. In PCAOB, the Court struck down the Public Company Accounting Oversight Board’s good-cause removal protection from dismissal by the SEC, relying primarily on the fact that the Board’s protections constituted the second layer of removal protection from the President. But the dual-layer of removal protection did not decide the case. A simple rule prohibiting dual layer removal protections would have swept aside good-cause protections for dedicated adjudicators operating in independent agencies who also have two layers of good-cause protection, a conclusion the PCAOB Court resists. Instead, what distinguishes the Board, on the one hand, from dedicated adjudicators within independent agencies, on the other, is the Board’s combination of quasi-legislative, executive, and adjudicative functions. In this respect, PCAOB marks a significant reversal: Whereas adjudicative functions had previously provided a sufficient ground for upholding good-cause removal protections for an agency, like the Board, with a combination of functions, under the logic of PCAOB, dedicated adjudicators are entitled to removal protections that officers who adjudicate but also possess quasi-legislative and enforcement powers are not. While the PCAOB decision may be read as applying this principle only to scrutiny of dual layer removal protections, the logic the decision’s separation-of-functions principle has no necessary limitation to second (or greater) tier protections and thus has the potential to restructure the constitutional foundations removal protections.

Keywords: independent agencies, separation of functions, administrative adjudication, separation of powers, agency independence, due process

Suggested Citation

Stack, Kevin M., Agency Independence After PCAOB (July 1, 2011). 32 Cardozo L. Rev. 2391 (2011); Vanderbilt Public Law Research Paper No. 14-40. Available at SSRN: https://ssrn.com/abstract=2534574

Kevin M. Stack (Contact Author)

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States

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