Early Commentary on Free Enterprise Fund v. PCAOB:

NYU law professor Rick Pildes has a lengthy post on Balkinization previewing Free Enterprise Fund v. PCAOB, "the most important challenge in two decades in the ongoing debate between those who believe in the "unitary executive branch" theory of Art. II of the Constitution and those who endorse the constitutional validity of independent agencies." Prof. Pildes, who represented amici supporting the PCAOB below, doubts the Supreme Court will invalidate the Board unless it is willing to challenge the constitutionality of independent agencies. I am not so sure.

As I read it, Prof. Pildes' argument rests on the claim that the Board is under the SEC's near-complete control, and thus the Board's members are inferior officers. This may be true insofar as the SEC's authority over the Board is concerned, but the statute also provides that Board members can only be removed for cause. This structural feature necessarily attenuates the SEC's practical control over the Board — even if SEC retains near-plenary authority to direct or overturn Board actions — and dramatically diminishes any Presidential control over the Board. Structure matters, and agency costs are real. Accepting that independent agencies are constitutional (either on first principles or precedent), does not mean that anything goes. It may be kosher to create an agency at one level of remove from direct Presidential authority, and still impermissible to nest one independent agency within another. Or, to paraphrase Judge Kavanaugh's dissent below, accepting Humphrey's Executor does not require accepting Humphrey's Executor squared. I would agree with Prof. Pildes, however, that it may be difficult for the Cort to invalidate the PCAOB without casting doubt on other Appointments Clause precedents, such as Morrison v. Olson.

Former Solicitor General Kenneth Starr and former Assistant AG Viet Dinh have a different take on the case, as they represent the plaintiffs. Last Friday they had an op-ed in the WSJ arguing not only that the PCAOB is unconstitutional, but also that the Board's "lack of an accountable structure has likely contributed to what members of both parties see as its policy failures."

This is a fascinating and potentially important case (as I stressed to my Administrative Law students last year), and it is definitely worth watching.

UPDATE: Professor Bainbridge has more here.