Sotomayor Confirmed, Constitutional Debate Continues

All Americans should take pride in seeing our first Hispanic Supreme Court justice (not counting Benjamin Cardozo). While this moment should have belonged to Miguel Estrada—who was denied even a vote by an unprecedented Democratic filibuster—we should nevertheless celebrate Sonia Sotomayor’s rise from very humble beginnings to reach the highest court in the land. Although her selection represents the very worst of racial politics—she is not a leading light of the judiciary and would not have been considered had she not been a Hispanic woman—her career achievements show that the American Dream endures.

What makes the American Dream possible, however, is the rule of law, which in this country is ultimately guaranteed by the Constitution. The Constitution provides for a very specific government structure, with checks on each branch’s powers designed to maximize liberty and eliminate arbitrary and capricious rule. To that end, officers of the judicial branch—judges—are to make their decisions irrespective of the race, religion, or riches of those who come before them. And judges are to interpret the Constitution as written text. If they set aside the text and rule based on their own notions of fairness, then they act as unelected legislators or, worse, extra-constitutional amenders of our founding document.

Nominee Sotomayor knew all this, which is why the testimony she gave at her confirmation hearings disclaimed many of her previous speeches and writings, even going so far as to reject President Obama’s “empathy” standard—the idea that a judge applies the law differently when a litigant is sympathetic in some politically correct way. While she was evasive most of the time—reason enough to vote against her—when she did say something about judicial philosophy, it was often indistinguishable from the words of John Roberts or Samuel Alito (as evidenced by the frustration of left-wing commentators). And for good reason: in poll after poll, the American people overwhelmingly support a vision of the judicial role as one of enforcing the law as written, not of imposing their own policy preferences or vision of justice.

Kudos from this exercise go to those Republicans whose hard questions and thoughtful statements elevated the discussion of the Constitution beyond mere abstractions, so Americans could better understand the significance of ideological differences over the judicial role, or the use of foreign law in interpreting the Constitution, or property rights, or employment discrimination.

In walking away from so many controversial positions, Sonia Sotomayor established a new standard to which all future nominees will at least have to pay lip service. While confirmation was almost a foregone conclusion from the start because of the Democrats’ strong Senate majority, the Republicans played well the cards they had been dealt by engaging in a serious discussion about constitutional interpretation and jurisprudential philosophy.

Cross-posted at Cato's blog.

Sarbanes-Oxley’s Harms Are Magnified by the PCAOB’s Unconstitutional Structure

Passed with scant deliberation amid a stock market panic, the Sarbanes-Oxley Act of 2002 vastly expanded the federal government’s role in regulating corporate governance and the accounting industry. As part of that effort, Congress created a new agency to “audit the auditors.” Known as the Public Company Accounting Oversight Board, the agency has broad rulemaking and enforcement powers to set accounting standards, investigate accounting firms, punish criminal violations, and make whatever rules “may be necessary or appropriate in the public interest or for the protection of investors.”

Remarkably, the PCAOB (pronounced “peek-a-boo”) also has the power to fund its own budget by levying taxes on publicly traded companies. Despite giving the PCAOB all this power, however, Congress insulated it entirely from presidential oversight. Unlike with an ordinary “independent agency,” the president has no power whatsoever to appoint or remove PCAOB officials. Those officials may be removed only “for cause” by the SEC, not the president; and SEC officials may themselves be removed only for cause.

The Free Enterprise Fund challenged the constitutionality of the PCAOB and appealed to the Supreme Court. Cato’s supporting brief focuses on the PCAOB’s practical policy consequences, illustrating how the PCAOB’s unconstitutional structure has created incentives for out-of-control spending, agency aggrandizement, and lack of coordination between regulators. Our brief also highlights the PCAOB’s efforts to impose American accounting standards abroad, which has caused confusion and invited retaliation from foreign regulators.

I previously blogged about this case here and here.

Cross-posted at Cato's blog.

A Chance to Rethink How We Regulate Political Speech

At the March 24 argument in Citizens United v. Federal Election Commission, the U.S. government argued that Section 203 of the Bipartisan Campaign Reform Act of 2002 (otherwise known as McCain-Feingold) permits the FEC to ban corporations, including ideological nonprofits like Citizens United, from making independent expenditures on films, books, or even “a sign held up in Lafayette Park.” The jurisprudential justification for this extraordinary and shockingly expansive view of the government’s power to suppress political speech traces to the Supreme Court’s 1990 decision in Austin v. Michigan Chamber of Commerce. In Austin, the Court held that Michigan had a compelling state interest in banning political speech funded with wealth accumulated using the corporate form. Though the Court contended that such speech, because it bears little correlation to public support for the political ideas expressed, constituted a “different type of corruption,” in reality it upheld Michigan’s statute as a “counterbalance” to the “distorting” and “unfair” influence corporate funds could have on the outcome of elections.

This relative-equality rationale—suppressing disfavored speakers to enhance the voice of other government-favored speakers—is antithetical to core First Amendment protections and elsewhere has been expressly rejected by the Court (in Buckley v. Valeo and, more recently, in Davis v. FEC). Accordingly, to decide Citizens United’s appeal, the Court ordered rebriefing and reargument on Austin’s continuing validity.

On Friday, Cato filed its brief, the second we’ve filed in the case. We argue that Austin, and the part of McConnell v. FEC that upheld Section 203’s facial validity, are not entitled to stare decisis deference and should thus be overturned. These relatively recent decisions are poorly reasoned, have engendered no reliance interests (no one relies on less freedom of speech), and have spawned an unworkable and irrational campaign finance system in which the government rations different levels of permissible political speech to otherwise equally situated speakers.

The case will be reargued September 9, in a special session about a month before the official start of the Court’s new term.

Cross-posted at Cato's blog.