The strange thing is that no statute says that the President may remove SEC commissioners only for cause. The idea that the President may not remove SEC commissioners except for cause turns out to be only a whopper of an assumption. Removing that erroneous assumption, there is only the PCAOB-SEC firewall to presidential control [...]]]> In his dissent in Free Enterprise Fund v. PCAOB, D.C. Circuit Judge Brett Kavanaugh characterized the SEC – Public Company Accounting Oversight Board (PCAOB) relationship as “Humphrey’s Executor squared.” His analysis assumes that two firewalls shield the PCAOB’s exercise of executive power from presidential control. First, PCAOB members can be removed only for cause by SEC commissioners. That’s clear enough. Second, SEC commissioners can be removed only for cause by the President.

The strange thing is that no statute says that the President may remove SEC commissioners only for cause. The idea that the President may not remove SEC commissioners except for cause turns out to be only a whopper of an assumption. Removing that erroneous assumption, there is only the PCAOB-SEC firewall to presidential control of the PCAOB and so understood that arrangement looks no worse than Humphrey’s Executor to the first power. Unless the Court is prepared to abandon Humphrey’s Executor altogether, this part of the challenge looks like a loser at this point in time.

The significance of the assumption was not lost on the Court during oral argument.

Justice Breyer first raised the issue (Tr. 17, lines 8-12: “What — what restrictions? Because, interestingly enough, my law clerks have been unable to find any statutory provision that says the President of the United States can remove an SEC commissioner only for cause”), but several justices later seconded the concern, including Justices Kennedy (Tr. 51-52) and Sotomayor (Tr. 52).

The only statute that could be interpretively glossed as creating good cause tenure is the provision for fixed commissioner terms. A provision, however, that fixes a tenure for a period of time does not thereby provide for removal only for cause. Examples abound in the U.S. Code. For example, bankruptcy judges are appointed for 14-year terms, 28 U.S.C. 152(a). It is a separate provision that provides bankruptcy judges may be removed only for cause. See 28 U.S.C. 152(e). A fixed term defines the appointment’s length and provides a measure for the quantum of damages should the officer be removed before the end of the term. On the other hand, a “for cause” provision specifies on what grounds an officer’s tenure may be terminated during that fixed term.

An analogy to agency law may be helpful here. A principal may contract with an agent for a fixed period of service, say, 5 years. If the principal should be canned before the agent’s 5 year term ends (agency law places the principal firmly in control of his choice of agents), the length of the term speaks only to the amount of damages that the erstwhile agent could receive for the breach of contract. The fixed term does not give the jilted agent a right to continue to serve in a principal-agent relationship if the removal was for other than cause. It just defines the amount of damages.

This agency approach explains why Wiener v. United States, 357 U.S. 349 (1958), should not be read to create an implied statutory limitation on presidential removal power whenever an officer merely holds an office for a fixed term. Wiener was simply a suit for back pay, not for reinstatement as an officer. The officer’s fixed term was relevant to the determination of the quantum of damages (much as it would be  in agency law).

Ironically, Justice Scalia was dissatisfied with Justice Breyer’s attention to statutory text – or absence thereof – at oral argument. Scalia thought that, notwithstanding the absence of any statute providing for good cause tenure for SEC commissioners, the Court should go along with the parties’ assumption. That position is surprising. Since when can parties stipulate to different statutory language than that which was duly enacted and the Court go along with it? And what is this new law of extra-textual assumptions? Is Scalia appealing to evolving standards of assumption? International and foreign sources of assumption? Assumptions found in legislative history? As Scalia says, the best evidence of what Congress intended is what the text of a statute said. Here it said nothing about limiting presidential power to remove SEC commissioners to good cause shown.

And what conditions for removal should we assume from this extra-textual exercise? Is the good cause that we are to assume the “malfeasance, neglect of duty, and inefficiency” language that created a “here-and-now subservience” in Synar? Or is it something more limited, such as removal only for physical or mental incapacity?

Of course, there is a textual option that avoids the need to assume and lays the problem at the feet of the democratic process. The Court could conclude that the SEC commissioners are removable at will because the statute does not say otherwise and conclude that there is only one removal firewall. To be sure, Congress could react to the Court’s statutory interpretation and create good cause tenure for such commissioners, but that’s the democratically and institutionally appropriate role of Congress. Then, and only then, would “Humphrey’s Executor squared” be truly presented to the Court for its review.

VICTOR HANSEN and LAWRENCE FRIEDMAN

on

The Case for Congress: Separation of Powers and the War on Terror

THE BOOK

Despite the focus on Presidential power and its expansion since September 11, one branch of government has [...]]]> Today’s Brights Ideas piece comes from Professors Victor Hansen and Lawrence Friedman who both teach atNew England Law, Boston. The book, The Case for Congress: Separation of Powers and the War on Terror (Ashgate), shows how Congress still has vital role to play in the way our country conducts war. In addition, for all of you wondering about the gestation of a book, let alone one where two authors must work together, the authors share the story of the beginnings of the book and some insights about collaboration and the legal academy.

VICTOR HANSEN and LAWRENCE FRIEDMAN

on

The Case for Congress: Separation of Powers and the War on Terror

THE BOOK

Despite the focus on Presidential power and its expansion since September 11, one branch of government has not received enough attention: Congress. Though the office of the President has over time accrued more power in the area of national security than the textual delegation in Article II would suggest, Congress still has an important role to play. At this writing, President Obama continues to pursue some of the same strategies adopted by his predecessor, and so it seems our representatives in Congress can never be reminded enough that they have the constitutional authority both to authorize and supervise many aspects of the defense of the nation against the threat posed by terrorism. This perspective drives our new book, The Case for Congress: Separation of Powers and the War on Terror.

Now, several years and a new Presidential administration after we began discussing the role of Congress in national security matters, we remain convinced that Congressional involvement should be encouraged.

The benefits of such Congressional action are many. Not least is the value that inheres in Congress, through enabling legislation and the apparatus of the political process, serving as a check on a President’s tyrannical impulses. In the end, as the framers imagined, Congressional involvement brings to the table a measure of accountability that exclusively executive decision making often lacks.

THE PROCESS: FROM DISCUSSIONS TO ARTICLES TO COLLABORATION

We started writing The Case for Congress: Separation of Powers and the War on Terror without even realizing it. As we note in the book’s preface, the project began as a discussion over lunch in late 2005 about various aspects of the war in Iraq and the war on terror. Each of us knew Americans on the ground in Iraq, and neither of us was impressed with the coverage of the war on terror in the popular media. In talking about the legality of the Bush administration’s moves in each of these conflicts, moreover, we thought about how terribly partisan the analysis of policy decisions had become, and we thought we could make a contribution to the debate by focusing, in a neutral way, on an institutional actor that seemed to be neglected: the United States Congress.

These discussions led to a series of essays published in the on-line journal Jurist, as well as to a larger project, a law review article about the Bush administration’s proposal to use secret evidence in the trials of terrorism detainees. That article was published in a symposium issue of the Roger Williams University Law Review on military justice in 2007.

Somewhere along the way, our work attracted the attention of an editor at the Vermont office of Ashgate Publishing, based in England. He contacted each of us separately to ask whether we had any interest in pulling together into a book some of the ideas we’d been toying with for a couple of years. This was in the spring of 2008. At the time, neither of us had written a book, or had much idea what it would take to turn one law review article and a handful of short essays into a longer work focusing on the issue to which we kept returning: the importance of Congressional involvement in foreign affairs and national security decisionmaking.

But once we decided we had more to say, we also discovered the writing was easy. In fact, working on the book became something of an attractive nuisance: each of us had other scholarly projects in process, as well as a full teaching load at New England School of Law, yet working on the book proved to be a welcome diversion from those responsibilities.

We learned something important in the process: It helps to collaborate. Collaboration is sometimes looked down upon in the legal academy, and for no good reason that we can discern. By collaborating on this project, we were able to get a manuscript to the publisher within months, rather than years, and see the book published in time for it (hopefully) to be relevant.