There are a number of significant cases pending in the U.S. Supreme Court to be decided in its current term. The following are highlights of some of these high-profile cases:
A case from West Virginia tests when judges must step aside from disputes that involve people who backed their election. West Virginia Supreme Court Justice Brent Benjamin rejected pleas to excuse himself from a lawsuit involving a booster of his 2004 election campaign and cast the deciding vote in overturning a verdict, now more than $82 million with interest, against his supporter’s company.
At stake in this case is the federal government’s authority to prevent discriminatory voting changes through a provision of the landmark Voting Rights Act. This section forces all or parts of 16 states, many in the South, to submit proposed election changes to the Justice Department. In 2006, Congress extended the provision, first enacted in 1965, for 25 more years. The local Texas governing authority challenging the law says the safeguard once may have been needed to root out discrimination, but no longer can be justified in 2009, especially with an African-American president.
One of the cases involves charges of reverse discrimination. White firefighters in New Haven, Conn., claim they were discriminated against when the city tossed out the results of a promotion exam because too few minorities scored high enough. The City says it acted because it might have been vulnerable to claims that the exam had a “disparate impact” on minorities in violation of the Civil Rights Act of 1964. The white firefighters said the decision violated the same law’s prohibition on intentional discrimination.
Student strip search
Another case involves the search of a student. A federal appeals court determined that an Arizona school official went too far by ordering a strip search of a 13-year-old eighth-grade girl accused of having prescription-strength Ibuprofen. The Justices appeared swayed by the argument of the school’s lawyer against tying the hands of administrators who must be able search for drugs and weapons on school grounds.
Investigating lending discrimination
An important case involves a fight between the states and the federal government over who gets to investigate national banks. The Obama administration says federal law prohibits states from looking at the lending practices of those banks, even under state anti-discrimination laws. Federal courts have so far blocked an investigation begun by New York, which is backed by the other 49 states, of whether minorities were being charged higher interest rates on home mortgage loans by national banks with branches in New York.
Challenge to Sarbanes-Oxley
The Supreme Court will decide a constitutional challenge to the 2002 law that created a national board to oversee U.S. public company auditors in the United States. The Justices agreed to review a ruling by a U.S. appeals court that upheld the Sarbanes-Oxley Act of 2002, which set up the private sector Public Company Accounting Oversight Board. The Free Enterprise Fund and a small Nevada accounting firm appealed to the Supreme Court claiming that the law violated constitutional requirements on separation of powers because it failed to allow adequate control of the board by the U.S. President.
The Board polices the U.S. audit industry, including the Big Four firms that review the books of major corporations: Ernst & Young LLP, KPMG, PricewaterhouseCoopers and Deloitte & Touche LLP. The Sarbanes-Oxley corporate reform law created the board in response to auditing scandals early in the decade that involved Enron Corp and other companies. The board’s members are appointed by the Securities and Exchange Commission, with consultation from the Federal Reserve Board and the Treasury Department. The SEC’s five commissioners are appointed by the White House with Senate consent.
Competitive Enterprise Institute, a public interest group representing Free Enterprise, said the PCAOB imposes massive regulatory burdens on public companies. The group argues that “the regulators are unaccountable to the people, the president or the senate.”
The lawsuit, filed in 2006, argued that the law unconstitutionally stripped the President of all power to appoint or remove Board members, or to supervise or control their activities. A federal judge and then the appeals court rejected the challenge. The appeals court ruled that past Supreme Court decisions on the President’s relationship with administrative agencies meant the Board’s set-up must be upheld.
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