Could the DC Circuit which held that the Sarbanes-Oxley accounting board didn't infringe on constitutional separation of powers rules have been sending a signal to Congress to fix the law? That's what law professor Larry Ribstein thinks might have been going on.
[T]he DC Circuit figured that by upholding SOX with a strong dissent, it might be sending a message to Congress to amend to eliminate the problem. The court thereby avoids the chaos that would have ensued under the alternative holding of declaring the PCAOB unconstitutional. Because SOX lacks a severability clause, the effect of that would be to invalidate all of SOX and throw the whole thing back to Congress.
That's right. With out a severability clause, Sarbanes-Oxley might be completely struck down by a court finding fault with even a minor part of the law. As we explained earlier this week, the creation of the Public Company Accounting Oversight Board may be in trouble if the issue reaches the court, which could put the whole of SOX in jeopardy.