Mark A. Esposito LLP Files Writ of Mandamus with the U.S. Fifth Circuit Court of Appeals in Litigation Against the PCAOB
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This morning, Mark A. Esposito LLP filed a Writ of Mandamus with the United States Court of Appeals for the Fifth Circuit on behalf of John Doe Corporation (“Doe Corp.”) in a matter involving an unprecedented constitutional challenge to the non-transparent investigative process of the Public Company Accounting Oversight Board (“PCAOB”). Mark A. Esposito LLP is asking the Fifth Circuit to order the trial court in the Southern District of Texas (“SDTX”) to request return of the case from the U.S. District Court for the District of Columbia. The Writ establishes that the SDTX, the home of Doe Corp., is the proper forum for litigating this case.
“We are in the appellate court because the trial court turned a blind eye to a standing order requiring SDTX trial courts to give notice and time for filing an appeal, apparently never read the detailed reasons in the Amended Complaint establishing the proper forum for the case as the federal court in Houston, and sought no briefing on applicability of the venue transfer statute under federal law,” says Jacob Frenkel, lead counsel and Chair of Mark A. Esposito LLP’s Government Investigations & Securities Enforcement Practice. “Doe Corp. has zero connection with or presence in Washington, DC, the Board’s backyard, where the Board wants this case to move forward. This case anywhere but the federal court in Houston would undermine generations-long principles of fairness and rationality in forum selection.”
The Amended Complaint is a legal challenge to the PCAOB’s investigative process. Three overriding allegations in the Amended Complaint are the unlawful delegation of legislative power to the Board, compelled production of audit work papers with no opportunity for a CPA firm or its associated persons to seek pre-enforcement judicial review, and complete absence of notice as to potential bases for alleging audit violations where there are no on-point auditing standards or auditing guidance for cryptocurrency, crypto-mining equipment, and crypto-asset issuers. Mr. Frenkel added that “ultimately, I and my team look forward to receiving discovery from the Board, deposing senior Board officials, and demonstrating to a federal Judge at trial how constitutionally defective and lacking in fairness and objectivity are PCAOB investigations. What should be obvious from the Complaint is how the Board is using its unlimited budget to attempt to crush small public accounting firms in an apparent crusade to leave but a few select firms standing.”
Mark A. Esposito LLP filed the case (John Doe Corp. v. Public Company Accounting Oversight Board, case number 4:24-cv-01103) in March 2024, using the pseudonym “John Doe Corporation” for the firm’s client because federal law and PCAOB Rules dictate that PCAOB investigations are non-public.
Jacob Frenkel (Member, Washington, D.C.) and Brooks Westergard (Member, Reno), who teamed recently to win complete dismissal of a case against the Securities and Exchange Commission (“SEC”) in the United States Court of Appeals for the First Circuit setting new precedent in relief defendant litigation and obtained an award of attorneys’ fees from the SEC, serve as Lead Counsel to John Doe Corporation, with the New Civil Liberties Alliance as co-counsel.
To read the brief, please click here.
“We are in the appellate court because the trial court turned a blind eye to a standing order requiring SDTX trial courts to give notice and time for filing an appeal, apparently never read the detailed reasons in the Amended Complaint establishing the proper forum for the case as the federal court in Houston, and sought no briefing on applicability of the venue transfer statute under federal law,” says Jacob Frenkel, lead counsel and Chair of Mark A. Esposito LLP’s Government Investigations & Securities Enforcement Practice. “Doe Corp. has zero connection with or presence in Washington, DC, the Board’s backyard, where the Board wants this case to move forward. This case anywhere but the federal court in Houston would undermine generations-long principles of fairness and rationality in forum selection.”
The Amended Complaint is a legal challenge to the PCAOB’s investigative process. Three overriding allegations in the Amended Complaint are the unlawful delegation of legislative power to the Board, compelled production of audit work papers with no opportunity for a CPA firm or its associated persons to seek pre-enforcement judicial review, and complete absence of notice as to potential bases for alleging audit violations where there are no on-point auditing standards or auditing guidance for cryptocurrency, crypto-mining equipment, and crypto-asset issuers. Mr. Frenkel added that “ultimately, I and my team look forward to receiving discovery from the Board, deposing senior Board officials, and demonstrating to a federal Judge at trial how constitutionally defective and lacking in fairness and objectivity are PCAOB investigations. What should be obvious from the Complaint is how the Board is using its unlimited budget to attempt to crush small public accounting firms in an apparent crusade to leave but a few select firms standing.”
Mark A. Esposito LLP filed the case (John Doe Corp. v. Public Company Accounting Oversight Board, case number 4:24-cv-01103) in March 2024, using the pseudonym “John Doe Corporation” for the firm’s client because federal law and PCAOB Rules dictate that PCAOB investigations are non-public.
Jacob Frenkel (Member, Washington, D.C.) and Brooks Westergard (Member, Reno), who teamed recently to win complete dismissal of a case against the Securities and Exchange Commission (“SEC”) in the United States Court of Appeals for the First Circuit setting new precedent in relief defendant litigation and obtained an award of attorneys’ fees from the SEC, serve as Lead Counsel to John Doe Corporation, with the New Civil Liberties Alliance as co-counsel.
To read the brief, please click here.
