CH 23 & 24 Administrative Agencies + Consumer Protection (Exam 2)

What is administrative law?

Law governing government agencies and their activities.

Why does Congress create administrative agencies?

To implement and enforce statutes.

What is enabling legislation?

A statute creating an agency and defining its powers.

What four things does enabling legislation specify?

Agency name, purpose, functions, and powers.

What does OSHA illustrate?

An agency implementing workplace safety laws.

What is a benefit of administrative regulation?

Protection of consumers, workers, and the environment.

What is a disadvantage of administrative regulation?

Compliance costs imposed on businesses.

What are federal executive agencies?

Agencies under more direct presidential supervision.

Give an example of an executive agency.

Department of Labor.

What are independent regulatory agencies?

Agencies with greater independence from direct presidential control.

Give two examples of independent regulatory agencies.

FTC and SEC.

Executive vs. independent agencies?

More direct presidential control vs. greater independence.

Who typically leads executive departments?

Cabinet secretaries.

Who often leads independent regulatory agencies?

Commissions or boards.

What are the three main powers of administrative agencies?

Rulemaking, enforcement, adjudication.

What is rulemaking?

Creating regulations that implement statutes.

What is agency enforcement?

Investigating compliance and responding to violations.

What is adjudication?

Resolving disputes through administrative proceedings.

What are the FTC's main enabling-law powers?

Rulemaking, investigations, reports, findings, recommendations, and hearings.

What business information can the FTC require?

Reports from covered interstate corporations.

Can agencies recommend new legislation?

Yes, when authorized.

What are the three constitutional checks on agencies?

Executive, legislative, judicial controls.

What executive controls apply to agencies?

Appointments and presidential veto of legislation.

What legislative controls apply to agencies?

Congress can change powers, abolish agencies, or defund them.

What judicial control applies to agencies?

Court review of agency actions.

What is the Exhaustion Doctrine?

Complete required administrative remedies before seeking judicial review.

Why must administrative remedies be exhausted?

To let the agency finish its required review first.

A business skips a required agency appeal and sues in court. What doctrine applies?

Exhaustion Doctrine.

What does APA stand for?

Administrative Procedure Act.

When was the APA enacted?

1946.

What is the purpose of the APA?

Establish procedures for federal agency actions.

What three major processes does the APA regulate?

Rulemaking, adjudication, judicial review.

Can enabling legislation modify APA procedures?

Yes, through specific congressional requirements.

What applies when Congress provides no special agency procedure?

The APA.

What is the arbitrary and capricious test?

Courts set aside agency actions lacking lawful, reasoned decision-making.

What five problems can make agency action arbitrary and capricious?

No rational explanation, unjustified policy change, improper factors, ignored factors, or contrary evidence.

What if an agency changes policy without explaining why?

Potential arbitrary and capricious action.

What if an agency ignores important evidence?

Potential arbitrary and capricious action.

What is fair notice in administrative law?

Notice of what regulated parties must do.

Why must agencies provide fair notice of changed requirements?

Businesses need to know expected future conduct.

What is an administrative rule?

An agency statement implementing, interpreting, or prescribing law or policy.

What are the three basic notice-and-comment steps?

Proposed rule, public comments, final rule.

Where are proposed federal agency rules published?

Federal Register.

What is the Federal Register?

Daily publication of federal rules, notices, and government actions.

What happens during the public comment period?

Interested persons submit written comments.

What must an agency do after receiving comments?

Consider them before finalizing the rule.

Where are final federal agency rules initially published?

Federal Register.

Where are effective federal regulations organized and codified?

Code of Federal Regulations (CFR).

Federal Register vs. CFR?

Register publishes rules and notices; CFR organizes current regulations.

What are interpretative rules?

Agency explanations interpreting existing laws or regulations.

Are interpretative rules generally subject to ordinary notice-and-comment requirements?

No, generally exempt.

What are agency guidance documents?

Informal explanations of agency policies or interpretations.

What is an agency inspection?

Examination of facilities or records for compliance.

What places might an agency inspect?

Offices, factories, or other business facilities.

What is a subpoena?

A legally authorized demand for testimony or evidence.

What is subpoena ad testificandum?

An order requiring someone to testify.

What is subpoena duces tecum?

An order requiring documents or records.

Ad testificandum vs. duces tecum?

Testify vs. produce documents.

What four limits apply to administrative subpoenas?

Legitimate purpose, relevance, specificity, reasonable burden.

What is the legitimate-purpose requirement?

An investigation must serve a lawful purpose.

What does relevance mean for an agency subpoena?

Information helps determine compliance or violations.

What is subpoena specificity?

The demand adequately identifies the requested information.

What does subpoena burden concern?

The cost or difficulty of compliance.

What constitutional amendment protects against unreasonable searches?

Fourth Amendment.

What is a search warrant?

An order authorizing a specified search and seizure.

Are physical agency searches generally subject to warrant requirements?

Yes, subject to legal exceptions.

What is a negotiated agency settlement?

An agreement resolving a compliance dispute.

What happens if an agency settlement cannot be reached?

The agency may issue a formal complaint.

What is an administrative formal complaint?

An official allegation of a violation.

What does ALJ stand for?

Administrative Law Judge.

What does an ALJ do?

Presides over administrative hearings and issues decisions.

What four powers does an ALJ have?

Administer oaths, take testimony, rule on evidence, determine facts.

Must an ALJ be unbiased?

Yes.

Can agency adjudication be informal?

Yes.

What does an ALJ typically issue after a hearing?

An initial decision or order.

Where can an ALJ's initial decision be appealed?

The agency's governing board or commission.

What is the basic administrative adjudication sequence?

Settlement attempt, complaint, hearing, initial decision, agency appeal.

What is the main federal consumer protection agency for deceptive advertising?

FTC.

What does FTC stand for?

Federal Trade Commission.

What does FCC stand for?

Federal Communications Commission.

What does EPA stand for?

Environmental Protection Agency.

What does FDA stand for?

Food and Drug Administration.

What law created the FTC?

Federal Trade Commission Act of 1914.

What practices does the FTC Act prohibit?

Unfair or deceptive trade practices.

What is deceptive advertising?

Advertising likely to materially mislead a reasonable consumer.

What does material mean in deceptive advertising?

Important enough to influence consumer decisions.

What is puffery?

Vague promotional opinion or exaggeration.

Puffery vs. deceptive advertising?

Subjective praise vs. misleading factual claims.

What kinds of advertising claims require substantiation?

Specific, factual, verifiable claims.

What does substantiation mean?

Evidence supporting an advertising claim.

What does the manipulated soup advertisement illustrate?

Deceptive visual presentation.

What does the manipulated vehicle-crushing demonstration illustrate?

Deceptive product-performance demonstrations.

What does the Lime-A-Rita example teach?

Advertising must be judged in its overall context.

What does the extraordinary weight-loss advertisement illustrate?

Unsupported scientific claims may be deceptive.

What does the dog-food packaging example teach?

Vague promotional claims may be permissible puffery.

What is a half-truth?

A technically true but misleadingly incomplete statement.

Can a literally true advertisement still be deceptive?

Yes, through misleading omissions or context.

Can a false celebrity endorsement be deceptive?

Yes.

What is bait-and-switch advertising?

Luring buyers with an offer, then pushing a more expensive product.