Court to rule on Sarbanes-Oxley
UPDATED 2:32 p.m.
The Supreme Court agreed on Monday to rule on the constitutionality of the Sarbanes-Oxley Act passed in 2002 to create a new government agency to regulate firms that audit the books of publicly traded companies. The key question in the case is whether the Act violated the separation-of-powers doctrine by the mode of selection and removal of members of the Public Company Accounting Oversight Board. The case is Free Enterprise Fund v. PCAOB (08-861).
The Court granted three other new cases, including a review of the fraud conviction of a former media mogul, Canadian Conrad M. Black, in a celebrated case involving allegedly illegal executive compensation. The case is Black v. U.S. (08-876).
Also granted was Beard v . Kindler (08-992), on the proper treatment in a federal habeas corpus proceeding of state procedural rules that are discretionary rather than mandatory. Justice Samuel A. Alito, Jr., took no part in that order. The Court also agreed to hear a death penalty case, Wood v. Allen (08-9156), with the grant limited to the first two questions. The Wood case tests the failure of an inexperienced defense lawyer to present in a capital sentencing proceeding evidence of the defendant’s severe mental impairment.
The newly granted cases will be heard in the Term that starts Oct. 5. The Court has finished oral arguments for the current Term, and is now working toward adjournment, probably in late June.
Among other orders Monday, the Court asked the U.S. Solicitor General to provide the federal government’s views on the deadline for workers to complain to a federal agency about the use of an employment test that has a stronger negative impact on minority applicants. Eight black individuals in Chicago, representing a class of 26,000 black applicants who passed a 1995 entry-level test for firefighters, but were never selected, contend that a flawed job test becomes an act of discrimination not when the results are announced, but when actual hiring decisions are made based on test results. The issue is which event starts the 300-day filing period for a complaint to the U.S. Equal Employment Opportunity Commission. When the Solicitor General responds, the Court will decide whether to hear the case — Lewis, et al., v. Chicago (08-974).
Among cases that the Court refused to hear was an appeal by former Louisiana Democratic Rep. William J. Jefferson, seeking to scuttle 14 of the 16 bribery charges against him because evidence of his legislative activities was heard by the grand jury that indicted him. The Court gave no reason for turning aside his claim that the grand jury consideration violated his rights under the Constitution’s Speech or Debate Clause. The denial came in Jefferson v. U.S. (08-1059). His case is scheduled to go to trial in Alexandria, Va., federal court on June 2. Jefferson, a nine-term member of the House, was narrowly defeated for reelection last year.
The Court also refused to step into a family feud over the copyrights to famous works of the author John Steinbeck. His only surviving son and granddaughter have been thwarted in efforts to undo his widow’s assignment to Penguin Group of the rights to such works as The Grapes of Wrath and Of Mice and Men. The case is Steinbeck, et al., v. Penguin Group, et al. (08-1039). Justice Stephen G. Breyer took no part in the order.
The Court also refused to hear these other issues:
** A plea by two California counties for the right to challenge state power to decriminalize the use and cultivation of marijuana for medical use, on the theory that this conflicts with federal narcotics law. Their case marked a failed attempt to get the Court to strike down the laws of 13 states that allow medical use of marijuana. (San Diego County v. San Diego NORML (08-887) and San Bernardino County v. California (08-897).
** A challenge to the constitutionality of laws in Indiana and other states that bar a winery — out-of-state or in-state — from selling or shipping wine directly to residents unless the buyer has had one face-to-face meeting with the winery to identify himself or herself. The denial came in Baude v. Heath (08-1004); the Seventh Circuit Court upheld the Indiana statute’s buyer identification requirement.
** A challenge to the constitutionality of police officers’ repeated use of a stun gun (“Taser”), inflicting pain, to try to get a suspect to cooperate at the scene of a traffic stop. Such use was upheld by the Eleventh Circuit Court. The case is Buckley v. Rackard (08-996).
In addition, the Court once more chose to pass up a test of whether a part of the federal sentencing regime remains binding, rather than advisory, under the Supreme Court’s 2005 decision in U.S. v. Booker. The question in Dunphy v. U.S. (08-1185) was whether a federal judge in imposing a new sentence after a Sentencing Guideline range has been lowered may go below the bottom of the new level. Federal courts are divided on the issue.
The Court, after looking for a fourth time, once again took no action on a case testing the constitutionality of the 2005 federal law giving a federal official sole authority to suspend federal, state and local laws that may get in the way of building a 700-mile-long “secure fence” along the U.S.-Mexico border. The case is El Paso County v. Napolitano (08-751).
The Court also took no action on two other issues of note: the constitutionality of a state law requiring one group of regulated companies to pay a fee to be used as a subsidy for competitions whose business is financially troubled (Empress Casino v. Giannoulias, et al., 08-945), and a plea to reexamine the standards that must be met before a party in a civil case may obtain punitive damages for harms done by a faulty consumer product (Daimler/Chrysler v. Flax, et al., 08-1010).