Dealbreaker's John Carney has a great post explaining why the DC Circuit’s recent case upholding SOX actually involves no mere technicality but a serious issue of delegation of power to administrative agencies, and why the Supreme Court may reverse if it gets the opportunity.
My only addition is to wonder if the 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.
Of course, if that was the strategy, it doesn’t eliminate the problem, because once this part of SOX goes to Congress, the log-rolling on the whole act will begin, which could throw a lot of issues up for grabs – e.g., breaks for small and foreign firms.
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