NCLA seeks Fifth Circuit"s help to return lawsuit to Texas
- NCLA filed a petition with the Fifth Circuit on September 12, 2024, to return a lawsuit against PCAOB to Texas.
- The lawsuit claims PCAOB unlawfully exerted government power and violated due process during an investigation.
- NCLA argues that the transfer to D.C. was premature and seeks to ensure that federal regulators cannot dictate the venue of litigation.
On September 12, 2024, the New Civil Liberties Alliance (NCLA) filed a petition with the U.S. Fifth Circuit Court of Appeals seeking a writ of mandamus to return a lawsuit filed by an anonymous client, John Doe Corporation, to the Southern District of Texas. The lawsuit challenges the Public Company Accounting Oversight Board (PCAOB) for allegedly overstepping its authority and infringing on the rights of the accounting firm. The case was transferred to the District of Columbia without proper notice or opportunity for response, violating legal protocols. The PCAOB, established under the Sarbanes-Oxley Act of 2002, is accused of conducting an intrusive investigation into the accounting firm, which NCLA argues deprives it of due process. The transfer of the case to D.C. disregarded a recently adopted Texas court rule that mandates a 21-day stay for out-of-circuit transfers, complicating the legal process for NCLA's client. NCLA's Senior Litigation Counsel, Russ Ryan, criticized the PCAOB for attempting to force accountants to litigate in distant courts, arguing that federal regulators should not have the advantage of 'home-court privilege.' This situation has prompted NCLA to seek emergency intervention from the Fifth Circuit to rectify what they deem an erroneous transfer. The outcome of this legal battle could have significant implications for the rights of small accounting firms and the accountability of federal regulatory bodies, highlighting ongoing tensions between state and federal jurisdictions in the realm of administrative law.