Administrative Law

Adminstrative Law

the body of law created by administrative agencies in order to carry out their duties and responsibilities.

Administrative agency

a federal, state, or local government agency created by the legislature to perform a specific function, such as to make and enforce rules pertaining to the environment.

Difference between statutory law and administrative law and how they interact with each other

whereas statutory law is created by legislatures, administrative law is created by administrative agencies.

when Congress-or a state legislature enacts legislation, it typically adopts a rather general statute and leaves the statute's implementation to an administrative agency. the agency then creates the detailed rules and regulations necessary to carry out the statute. the administrative agency, with its specialized personnel, has the time, resources, and expertise to make the detailed decisions required for regulation.

Administrative agencies throughout the government

at the national level, the two basic types of administrative agencies are executive agencies and independent regulatory agencies.

there are administrative agencies at the state and local levels as well. a state agency is created as a parallel to a federal agency.

just as federal statutes take precedence over conflicting state statute, so do federal agency regulations take precedence over conflicting state regulations.

Executive agencies

exist within the cabinet departments of the executive branch. for instance, the Food and Drug Administration is within the U.S. Department of Health and Human Services.

executive agencies are subject to the authority of the president, who has the power to appoint and remove officers of federal agencies.

Independent regulatory agencies

are outside the cabinet departments and include the Federal Trade Commission, the Securities and Exchange Commission, and the Federal Communications Commission.

the president's power is less pronounced in regard to independent agencies, whose officers serve for fixed terms and cannot be removed without just cause.

Do administrative agencies work together?

yes, often administrative agencies at various levels of government work together and share the responsibility of creating particular regulations

(ex: the Environmental Protection Agency (EPA works with parallel environmental agencies at the state level to analyze existing data and determine the appropriate pollution-control standards)

What are the benefits and costs for administrative agencies’ legislation and regulations?

legislation and regulation increases compliance, but the costs of compliance can cost businesses a pretty buck. although the agencies have calculated that the overall benefits of its regulations often exceed their costs, the burden on business is substantial.

How to create administrative agencies

to create an administrative agency, Congress passes enabling legislation, which specifies the name, purposes, functions, and powers of the agency being created.

federal administrative agencies can exercise only those powers that Congress has delegated to them in enabling legislation.

through similar enabling acts, state legislatures create state administrative agencies

Which act created the Federal Trade Commission (FTC)

Federal Trade Commission Act. the act prohibits unfair and deceptive trade practices. it also describes the procedures that the agency must follow to charge persons or organizations with violations of the act, and it provides for judicial review of agency orders.

What powers the Federal Trade Commision Act grant the Federal Trade Commission?

1. create "rules and regulations for the purpose of carrying out the
   Act."

2. conduct investigations of business practices.

3. obtain reports from interstate corporations concerning their business practices.

4. investigate possible violations of federal antitrust statutes. (The
   FTC shares this task with the Antitrust Division of the U.S.
   Department of Justice.)

5. publish findings of its investigations.

6. recommend new legislation.

7. hold trial-like hearings to resolve certain kinds of trade disputes that involve FTC regulations or federal antitrust laws.

What is the composition of the commission that heads the FTC?

the commission that heads the FTC is composed of five members.

each is appointed by the president, with the advice and consent of the Senate, for a term of seven years. the president designates one of the commissioners to be the chair. various offices and bureaus of the FTC undertake different administrative activities for the agency.

What agency powers are associated with the functions of the government?

legislature (rulemaking), the executive branch (enforcement), and the courts (adjudication).

Is it only the legislative branch that can create laws?

no, the U.S. Constitution authorizes only the legislative branch to create laws. yet administrative agencies, to which the Constitution does not specifically refer, can make a legislative rule that is as legally binding as laws that Congress passes using the delegation doctrine.

Delegation Doctrine

a doctrine, based on the U.S. Constitution, which has been construed to allow Congress to delegate some of its power to make and implement laws to administrative agencies.

this doctrine and administrative law is based on Article I and Section 8, this section gives Congress the power to make all laws necessary for executing its specific power.

the courts interpret these passages as granting Congress the power to establish administrative agencies and delegate to them the power to create rules for implementing those laws.

Bureaucracy

the organizational structure, consisting of government bureaus and agencies, through which the government implements and enforces the laws.

Why are administrative agencies called the fourth branch of the U.S. government?

they constitute the bureaucracy and in many ways function independently.

How does the executive branch exercise control over agencies?

through the president’s powers to appoint federal officers and through the president’s veto power. the president may veto enabling legislation presented by Congress or congressional attempts to modify an existing agency’s authority.

How does the legislative branch exercise control over agencies?

through legislation. Congress give powers to an agency through enabling legislation and can take power away—or even abolish an agency altogether—through subsequent legislation. enabling legislation usually sets certain time and monetary limits on the funding of particular programs, Congress can always revise these limits.

in addition to its power to create and fund agencies, Congress can investigate the implementation of its laws and the agencies that it has created. Congress also has the power to “freeze” the enforcement of most federal regulations before the regulations take effect. another check on agency actions is the Administrative Procedure Act (APA)

How does the judicial branch exercise control over agencies?

through the courts’ review of agency actions. The Administrative Procedure Act provides for judicial review of most agency decisions. agency actions are not automatically subject judicial review, the party seeking court review must first exhaust all administrative remedies under what is called the exhaustion doctrine.

Exhaustion Doctrine

in administrative law, the principle that a complaining party normally must have exhausted all available administrative remedies before seeking judicial review.

The Arbitrary and Capricious Test

the arbitrary and capricious standard does not have a precise definition, but in applying it, courts typically consider whether the agency has done any of the following:

1. failed to provide a rational explanation for its decision.

2. changed its prior policy without justification.

3. considered legally inappropriate factors.

4. failed to consider a relevant factor.

5. tendered a decision plainly contrary to the evidence.

What was Congress’s goal in enacting the APA

to provide for more judicial control over administrative agencies. the APA sets forth rules and regulations that govern the procedures administrative agencies follow in performing their duties.

to that end, the APA provides that courts should “hold unlawful and set aside” agency actions found to be “arbitrary, capricious, and abuse of discretion, or otherwise not in accordance with law.” under this standard, parties can challenge regulations as contrary to law or so irrational as to be arbitrary and capricious.

What notice must regulatory agencies give to those affected by its regulations?

Fair notice.

for example, an agency may change the way it applies a certain regulatory principle. Before the change can be carried out, the agency must give fair notice of what conduct will be expected in the future.

What functions make up the Administrative process?

rulemaking, enforcement, and adjudication.

the APA imposes requirements that all federal agencies must follow in fulfilling their functions. thus, the APA is an integral part of the administrative process.

Rulemaking

the formulation of new regulations, or rules. the APA defines a rule as “an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law and policy.”

regulations are sometimes said to be legislative because, like statutes, they have a binding effect. thus, violators of agency rules may be punished. because agency rules have such significant legal force, the APA established procedures for agencies to follow in creating (amending, or removing) rules. if an agency fails to follow the required procedures, a court may find that the resulting rule is invalid.

The APA’s notice-and-comment rulemaking procedure

many rules must be adopted using the APA's notice-and-comment rulemaking procedure, which involves three basic steps:

1. Notice of the proposed rulemaking.

2. A comment period.

3. The final rule.

Notice of the Proposed Rulemaking

when a federal agency decides to create a new rule, the agency publishes a notice of the proposed rulemaking proceedings in the Federal Register.

The Federal Register is a daily publication of the executive branch that prints government orders, rules, and regulations.

the notice states where and when the proceedings will be held, the agency's legal authority for making the rule (usually its enabling legislation), and the terms or subject matter of the proposed rule.

fhe agency must also make available to the public certain other information, such as the key scientific data underlying the proposal.

Comment Period of the Proposed Rulemaking

following the publication of the notice of the proposed rulemaking proceedings, the agency must allow ample time for persons to comment on the proposed rule. the purpose of this comment period is to give interested parties the opportunity to express their views on the proposed rule in an effort to influence agency policy. the comments may be in writing or, if a hearing is held, may be given orally. all comments become a public record that others can examine.

the agency need not respond to all comments, but it must respond to any significant comments that bear directly on the proposed rule. the agency responds by either modifying its final rule or explaining, in a statement accompanying the final rule, why it did not make any changes.

in some circumstances, particularly when the procedure being used in a specific instance is less formal, an agency may accept comments after the comment period is closed.

The Final Rule

after the agency reviews the comments, it drafts the final rule and publishes it in the Federal Register. A final rule must contain a "concise general statement of ... basis and purpose" that describes the reasoning behind the rule. the final rule can include modifications based on public comments. If substantial changes are made, however, a new proposal and a new opportunity for comment are required.

The final rule is later compiled along with the rules and regulations of other federal administrative agencies in the Code of Federal Regulations.

final rules have binding legal effect unless the courts later overturn them. If an agency fails to follow proper rulemaking procedures when it issues a final rule, however, the rule may not be binding.

Informal Agency Actions

agencies have increasingly used more informal methods of policymaking. these methods include issuing interpretive rules and guidance documents.

informal agency actions are exempt from the APA's requirements because they do not establish legal rights. a party cannot be directly prosecuted for violating an interpretive rule or a guidance document.

nevertheless, an informal action can be important because it warns regulated entities that the agency may engage in formal rulemaking if they ignore its informal policymaking.

Interpretive rule

is not legally binding. interpretive rules simply indicate how an agency plans to interpret and enforce its statutory authority.

Guidance documents

advise the public on the agencies’ legal and policy positions.

Enforcement

agencies exercise enforcement through inspections and tests, subpoenas, and search warrants.

The two types of subpoenas

The subpoena ad testificandum (to testify) and the subpoena duces tecum (bring it with you). an administrative agency may use either type of subpoena.

Subpoena ad testificandum

is an ordinary subpoena. it is a writ, or order, compelling a witness to appear at an agency hearing

subpoena duces tecum

compels an individual or organization to hand over books, papers, records, or documents, to the agency.

What factors are considered by a court to determine whether an agency is abusing its discretion in pursuing information as part of an investigation?

1. The purpose of the investigation. An investigation must have a legitimate purpose. Harassment is an example of an improper purpose. An agency may not issue an administrative subpoena to inspect business records if the motive is to harass or pressure the business into settling an unrelated matter.

2. The relevance of the information being sought. Information is relevant if it reveals that the law is being violated or if it assures the agency that the law is not being violated.

3. The specificity of the demand for testimony or documents. A subpoena must, for example, adequately describe the material being sought.

4. The burden of the demand on the party from whom the information is sought. For instance, the cost of copying requested documents or providing digital information may become burdensome. (Note that a business generally is protected from revealing information such as trade secrets.)

Search warrants

the Fourth Amendment protects against unreasonable searches and seizures by requiring that in most instances a physical search for evidence must be conducted under the authority of a search warrant.

an agency's search warrant is an order directing law enforcement officials to search a specific place for a specific item and seize it for the agency.

it was once thought that administrative inspections were exempt from the warrant requirement, but the United States Supreme Court has held that the requirement does apply to the administrative process.

nevertheless, agencies can conduct warrantless searches in several situations. warrants are not required to conduct searches in highly regulated industries. firms that sell firearms or liquor, for instance, are automatically subject to inspections without warrants.

sometimes, a statute permits warrantless searches of certain types of hazardous operations, such as coal mines. also, a warrantless inspection in an emergency situation is normally considered reasonable.

Adjudication

To render a judicial decision. Adjudication is the trial-like proceeding in which an administrative law judge hears and resolves disputes involving an administrative agency's regulations.

Negotiated Settlements

depending on the agency, negotiations may take the form of a simple conversation or a series of informal conferences. whatever form the negotiations take, their purpose is to rectify the problem to the agency's satisfaction and eliminate the need for additional proceedings.

settlement is an appealing option to firms for two reasons: to avoid appearing uncooperative and to avoid the expense involved in formal adjudication proceedings and in possible later appeals. settlement is also an attractive option for agencies. to conserve their own resources and avoid formal actions, administrative agencies devote a great deal of effort to giving advice and negotiating solutions to problems.

Formal Complaints

if a settlement cannot be reached, the agency may issue a formal complaint against the suspected violator.

the complaint is a public document, and a press release may accompany it. the party charged in the complaint responds by filing an answer to the allegations. if the charged party and the agency cannot agree on a settlement, the case will be adjudicated.

Hearings

agency adjudication involves a hearing before an administrative law judge (ALJ. under the APA, before the hearing takes place, the agency must issue a notice that includes the facts and law on which the complaint is based, the legal authority for the hearing, and its time and place.

The Role of the Administrative Law Judge

the ALJ presides over the hearing and has the power to administer oaths, take testimony, rule on questions of evidence, and make determinations of fact. technically, the ALJ, who works for the agency prosecuting the case, is not an independent judge.

nevertheless, the law requires the ALJ to be unbiased.

certain safeguards prevent bias on the part of the ALJ and promote fairness in the proceedings. for instance, the APA requires that the ALJ be separate from the agency's investigative and prosecutorial staff. the APA also prohibits ex parte (private) communications between the ALJ and any party to an agency proceeding. finally, provisions of the APA protect the ALJ from agency disciplinary actions unless the agency can show good cause for such an action.

Hearing Procedures

hearing procedures vary widely from agency to agency. administrative agencies generally exercise substantial discretion over the type of procedure that will be used.

frequently, disputes are resolved through informal adjudication proceedings that resemble arbitration.

a formal adjudicatory hearing, in contrast, resembles a trial in many respects. prior to the hearing, the parties are permitted to undertake discovery-involving depositions, interrogatories, and requests for documents or other information. the discovery process usually is not quite as extensive as it would be in a court proceeding, however.

the hearing itself must comply with the procedural requirements of the APA and must also meet the constitutional standards of due process. The burden of proof in an enforcement proceeding is placed on the agency. During the hearing, the parties may give testimony, present other evidence, and cross-examine adverse witnesses.

The difference between trials and agency hearings

a significant difference is that normally much more information, including hearsay (secondhand information), can be introduced as evidence during an administrative hearing.

Agency orders

following a hearing, the ALJ renders an initial order, or decision, on the case. either party can appeal the ALJ's decision to the board or commission that governs the agency and can subsequently appeal the agency decision to a federal court of appeals.

If no party appeals the case, the ALJ's decision becomes the final order of the agency. the ALJ's decision also becomes final if a party appeals and the commission and the court decline to review the case.

if a party appeals and the case is reviewed, the final order comes from the commission's decision (or, if that decision is appealed, that of the reviewing court).

Public accountability

after growing public concern over the powers exercised by administrative agencies, Congress passed several laws to make agencies more accountable through public scrutiny.

The Freedom of Information Act (FOIA)

requires the federal government to disclose certain records to any person on request, even if no reason is given for the request. Federal government agencies must make their records available electronically on the Internet and in other electronic formats.

the FOIA exempts certain types of records, such as those involving national security, and those containing information that is personal or confidential.

for other records, a request that complies with the FOIA procedures need only contain a reasonable description of the information sought.

an agency's failure to comply with an FOIA request can be challenged in a federal district court. the media, industry trade associations, public-interest groups, and even companies seeking information about competitors rely on these FOIA provisions to obtain information from government agencies.

The Government in the Sunshine Act

also referred to as open meeting law, it requires that “every portion of every meeting of an agency” be open to “public observation.” the act also requires procedures to ensure that the public is provided with adequate advance notice of the agency’s scheduled meeting and agenda.

What are the exceptions of the Sunshine Act that allow closed meetings to be permitted?

the following situations:

1. the subject of the meeting concerns accusing any person of a crime.

2. open meetings would frustrate implementation of future agency actions.

3. the subject of the meeting involves matters relating to future litigation or rulemaking.

courts interpret these exceptions to allow open access whenever possible.

the Regulatory Flexibility Act

this act was formed over the concern over the effects of regulation on the efficiency of businesses, particularly smaller ones, and led Congress to pass it.

under this act, whenever a new regulation will have a “significant impact upon a substantial number of small entities,” the agency must conduct a regulatory flexibility analysis. the analysis must measure the cost that the rule would impose on small businesses and must consider less burdensome alternatives.

this act also contains provisions to alert small businesses about forthcoming regulations.

the act relieved small businesses of some record-keeping burdens, especially with regard to hazardous waste management.

The Small Business Regulatory Enforcement Fairness Act (SBREFA)

includes various provisions intended to ease the regulatory burden on small businesses:

1. federal agencies must prepare guides that explain in plain English how small businesses can comply with federal regulations.

2. Congress may review new federal regulations for at least sixty days before they take effect, giving opponents of the rules time to present their arguments.

3. the courts may enforce the Regulatory Flexibility Act. this provision helps to ensure that federal agencies will consider ways to reduce the economic impact of new regulations on small businesses.

4. The Office of the National Ombudsman at the Small Business Administration was established to receive comments from small businesses about their dealings with federal agencies.
   based on these comments, Regional Small Business Fairness Boards rate the agencies and publicize their findings.