Legal Studies Final

The Nature of Criminal Law

Used for public & individual deterrence, harm prevention, and punishment + rehabilitation. It was historically a product of common law (precedent influences future rulings), but not is exclusively statutory (written & dictated by statute, esp the 1962 Moral Penal Code).

Unlike Civic law, there is no federal level for criminal law.

What defines a crime and its punishment

Crimes can be acts or omissions. They are defined by public law & punished through judicial proceedings brought by the government.

The essential elements of crime

Actus reus: all non-mental elements of the crime

Mens rea: degree of mental fault/”the guilty mind”. legal principle that a person must have had a certain intent/mental attitude when performing the crime. to be convicted, their “guilty mind” must match the mental state for that crime

Actus Reus

the tangible act of the crime

• physical acts, movement, speech

• failure to act/omissions

• circumstances & consequences

Mens rea

degree of mental fault/”the guilty mind”. legal principle that a person must have had a certain intent/mental attitude when performing the crime. to be convicted, their “guilty mind” must match the mental state for that crime

• subjective fault - purposeful, knowing, and reckless.

  • purposefully: defendant had conscious objective to engage in prohibited conduct or cause result.

  • knowingly: defendant is aware conduct is prohibited type of conduct

• objective fault - large deviation from standard of care (negligence)

Model Penal Code Common Defenses

Self Defense, Duress, Mistake of Fact, Entrapment

Self Defense

• Person or property: reasonable force to protect themselves, others, or their property

• Majority rule: deadly force not reasonable to protect property

• Stand Your Ground laws eroding majority view

  • type of self-defense law that authorizes individuals to use force to defend themselves

Duress

Person threatened w/ immediate serious bodily harm to another person unless engaged in a crime (no excuse for murder).

Mistake of Fact

Person reasonably believes facts surrounding an act would not constitute a crime (honest and reasonable)

Entrapment

• Law enforcement official induces a person to commit a crime when the person wouldn’t have done w/o the persuasion of the official

• Defendant’s predisposition defeats the defense of entrapment by proving the defendant was alr willing to commit a crime before government involvement. gov has to provide:

  • more than opportunity

  • degree of urging

  • coercion or persuasion

Criminal Procedure fundamentals

criminal procedure is mechanism through which crimes are investigated, guilt of the accused is adjudicated, and punishment is imposed

What does criminal procedure seek to address

tensions inherent to the criminal justice system

• balance between insufficient enforcement and overzealous investigation/prosecution

• identifying, apprehending and punishing criminals while exonerating the innocent

• government intrusion vs individual privacy

• government authority & societal inequalities

What level of proof is required for crimes

beyond a reasonable doubt

What are the differences between civil procedure and criminal

• beyond a reasonable doubt

• presumption of innocence

• defendant cannot be compelled to testify against themselves (allowed to plead the 5th)

• Prosecution must turn over all exculpatory evidence to defendant (Brady Rule)

• There are constitutional. protections shielding them from improper government behavior that deprives them of liberty interests (4-6th, 8th, 14th amendments)

4th amendment

freedom from unreasonable search & seizure (warrants or warrantless)

6th amendment

• right to a speedy, public jury trial

• impartial judge

• right to be informed of accusations

• right to present witnesses and confront accusers

• right to counsel

5th amendment

• right to due process

• right to indictment by grand jury for capital crimes/serious crimes

• freedom from double jeopardy: you can’t be retried at the federal level for the same crime

• freedom from self-incrimination

8th amendment

• freedom from excessive bail

• freedom from cruel and unusual punishment

14th amendment

extends the bill of rights to the state action

• 5th amendment right to indictment had not been applied to state action

Steps in a Criminal Investigation & Prosecution

1. investigation: collection of evidence, interview, searches/stops/temp detention

2. suspect is arrested and booked (fingerprint, searched, held)

3. charging decisions by officer or prosecutor (status shifts from arrestee to defendant in criminal system)

   1. indictments required for federal crime felonies, but requirements vary by state

4. initial appearance informed of charge & bail potentially set

5. prelim hearing: indep review by a judge to see if probable cause exists that the defendant committed the alleged crimes

6. indictment via grand jury/filing of criminal info if probable cause exists

7. arraignment: defendant formally charged & enters plea

Steps in Criminal Trial

1. Prosecution followed by defense

2. Opening and closing statements

3. Judge instructs jury

4. VERDICT

   1. Not guilty - government has no right to appeal

   2. Guilty - judge enters judgement of conviction and sets time for sentencing

      1. Defendant may make motion for new trial (prejudicial error) or file appeal

What is the US Sentencing Guidelines resulted from

Sentencing Reform Act of 1984

• Changed substance and procedure of sentencing by federal courts

• objective was to take discretion away from trial judges and put it in the hands of the legislature

• Sentencing Reform Act created U.S. Sentencing Commission as a permanent body (part of judicial branch and bipartisan)

When did sentencing guidelines switch from mandatory/regulatory to advisory?

In US v Booker (2005), SCOTUS said mandatory guidelines violated 6th amendment right to a jury trial, as depriving defendants of jury trials on fact issues that might be relevant to their ultimate sentencing is unconstitutional.

Thus, sentencing guidelines were switched to advisory

What exactly is the purpose of the US Sentencing Commission?

They promulgate initial guidelines, propose amendments, implement Congressional acts, and make recommendations to Congress for changes

1991 Organizational Guidelines

Created financial incentives for corporations to adopt compliance programs

• Organizations could reduce “culpability scores” through effective compliance programs, acceptance of responsibility, and self-reporting errors

• however there is no specific guidance on elements of an effective compliance program

• corporation sentences are determined by what sentencing guidelines apply and what the mitigating/aggravating factors are

What are organizational effective compliance programs and how do they relate to the government?

if organizations accept responsibility and self-report underlying criminal conduct prior to the government becoming aware of their illegal activity, this reduces their culpability score.

the acceptance of responsibility is determined by

• how cooperative the corporation is w/ the government while an investigation is being conducted

• how much info they provide

• how responsive they are in acknowledging the underlying issue driving potential criminal violations

Sarbanes-Oxley Act of 2002

US Sentencing Commission directed to review & amend the sentencing guidelines to deter/punish organizational misconduct

2004 Amendments to Sentencing Guidelines

• Established stand-alone guidance on effective compliance and ethics programs

• clarified that the Board of Directors must be knowledgeable about content and operation of programs

• shifted the focus from purely a compliance program to

  • compliance and ethics program w/ a focus on organization culture

  • changed how a corporation (management& CEO) drove that culture

Compliance

duty to meet a requirement and typically law driven (civil or criminal law standards). it is mostly advisory, with no penalty if not followed.

1. Hortatory

2. Incentive-based

3. Mandatory

The different forms of compliance

1. Hortatory: advisory in nature. No penalty if not followed

2. Incentive-based: following requirements may result in more favorable treatment or mitigate penalties or consequences. popular in federal healthcare programs/government contracting

   1. [if non compliant] company can be prevented/excluded from competing in government contracts

3. Mandatory: Laws & Regulations that must be followed

   1. Not an underlying law, but the law requires companies to have the compliance program, and failure to have the program results in a legal violation

When did the focus shift from compliance to culture & why

In 2004, the focus shifted from organizing compliance programs to instead organization culture because compliance is overly legalistic & focus on spotting out enemies. Compliance was critiques as being to legalistic and punishment-based rather than rewarding for those who are good.

What does ethics focus on

It is a value-based approach focused on

• fostering ethical decision-making

• incentives and culture

• tone from the top & tone from the middle

Legal and Enforcement drivers for Compliance and Ethics programs

• cost avoidance

• element in defense against government enforcement or private litigation

• compliance and ethics programs and voluntary disclosures may result in forms of amnesty, or reduced sentences/fines

• prosecution often result in involuntary programs that may constrain otherwise legal activity and create a culture of fear

• expansive theories of corporate liability for conduct (subsidiaries related entities, and employees)

Ultimately, what does the Compliance and ethics program attempt to do

address to what extent the subject (wrongdoing) should be litigated, whether the wrongdoing reflects the nature/intent of the corporation, or was it done outside the rules and standard practices. Determine the corporation’s true intent in how they operate.

Where else can compliance and ethics programs show up?

private cases/litigation

• the program must be effective in order to voluntarily make disclosures to regulators that result in regulator’s decisions to not prosecute or to reduce the charged. must show insane compliance.

• If the program isn’t effective in the company, the government tends to reflect their own management views into the company for a certain time period via involuntary programs.

what happens when the government implements involuntary programs into a company

this can stifle innovation and worry employees

Reputation and Business Drivers affecting Compliance and Ethics Programs

• competitive impact & reputational harm

• responding to legal charges and enforcement oversight due to a compliance and ethics failure distracts management of daily tasks SIGNIFICANTLY

• strong compliance and ethics programs & ethical cultures result in better long-term performance

• strong compliance and ethics programs improve employee engagement and retention

• compliance and ethics programs identify improvements to business processes and operations

The 7 Elements of an Effective Compliance and Ethics Program

1. establish standards/procedures to prevent and detect criminal conduct

2. top management involved in implementation/operation of program

3. Reasonable steps to prevent hiring and promotion of key personnel that were known or should have been known to have engaged in inappropriate conduct

4. communicate and train about compliance and ethics program periodically and practically

5. monitoring and auditing systems; maintain and publicize system for reporting of criminal conduct w/o fear of retribution

6. promote and enforce program through appropriate incentives and disciplinary measures

7. after an offense has been detected, undertake reasonable steps to respond appropriately and prevent further similar offenses

2nd Elements of an Effective Compliance & Ethics Program

(Top management involved in implementation/operation of program)

• typically an audit/risk committee and specific executive that has internal responsibility for implementing the compliance and ethics program

• also a management committee that includes people from each line of business and and responsible to implement it within the lines/across the organization

  • if new organizations are integrated into the company, need to figure out how to implement the overarching compliance and ethics program into those groups

3rd Elements of an Effective Compliance & Ethics Program

(Reasonable steps to prevent hiring and promotion of key personnel that were known or should have been known to have engaged in inappropriate conduct)

• In depth process to review/hire people, especially regarding promotions. When management is making hiring/promotion decisions, examining workers’ previous problematic behaviors

• people often have to take annual or monthly compliance and ethics online training

  • creates more resources and proof that they want to comply

7th Elements of an Effective Compliance & Ethics Program

After an offense has been detected, undertake reasonable steps to respond appropriately and prevent further similar offenses

• If you find a pattern of issues where policy is not being required, how in depth do you dig in and report the issue/cause of the problem

Elements of effective compliance and ethics programs

Evaluation questions for Corporation Compliance Programs

• Is the corporation’s compliance program well designed?

  • Risk assessment: allocation of resources, updates/revisions

  • Policies/procedures: design, accessibility, operation integration

  • Training: risk-based, content, communication about misconduct

  • Confidential reporting structure and investigation process: properly scopes investigations, resources and tracking

  • 3rd part management: appropriate controls, oversight, consequences

  • mergers and acquisitions: integration and implementation post close, due diligence

• Is the program being applied earnestly and in good faith? Is the program adequately resourced and empowered to function effectively?

  • commitment by senior and middle management: shared accountability, board compliance exercise

  • autonomy and resources for compliance program: structure, independence, seniority

  • incentives and disciplinary measures: disciplinary process and consistency, incentive systems

• Does the corporation’s compliance program work in practice?

  • continuous improvement & testing: periodic testing/review, internal audit process, updates

  • investigation of misconduct: qualified, responsive investigator

  • analysis and remediation of underlying misconduct: root cause analysis, prior weakness, payment systems.

Learn the Walmart case

this is too long im just saying to learn it

How can culpability score be reduced

• existence of “an effective compliance and ethics program”

• self-reporting of violations and cooperation w/ authorities

• identification of steps prior to offense to prevent and detect criminal conduct

• level of employee involvement and response following identification of an offense

• acceptance of responsibility

What are caveats of the 4th amendment

It only applies to actions of government officials — private employers can monitor emails or install surveillance cameras throughout the workplace

• to obtain a warrant, law enforcement officials must demonstrate to a magistrate the probably cause exists to believe search will reveal evidence of criminal activity

probable cause

a practice common-sense decision that given the circumstances, there is a probability of evidence/contraband evidence found in a particular place

a search warrant isn’t required when

• hot pursuit of a fugitive

• consent

• emergency

• lawful arrest

• evidence of a crime in plain view

• delays present a significant obstacle to the investigation

When is evidence not allowed to be used

When the means to obtain the evidence don’t comply w/ the 4th Amendment

Exclusionary Rule

legal principle that prevents the government from using evidence obtained in violation of a defendant’s constitutional rights in court. Drives a more just legal process on the side of law enforcement.

What was SCOTUS’S original belief

Only physical instructions (persons, houses, papers & effects) qualified for 4th Amendment protections (trespass doctrine)

How did (Katz v US 1967) expand the 4th amendment

It opened the definition of privacy to ecoompass expectations of privacy

Miranda Warning triggers

Custody: formal arrest or the deprivation of freedom to an extenet associated w/ formal arrest

Interrogation: explicitly questioning or actions that are reasonably likely to elicit incrimination response

Ethics

the study of what is good or right for human beings

• what people ought to do or what goals should be pursued

• ethics donn’t rely on courts or legislatures to decide issues

are laws equivalent to ethics

No, although an individual isn’t legally required to do certain things, lack of doing certain actions could raise ethical issues

• illegal acts may also be ethical and moral (disobedience in opposition to a dictator)

Business ethics & who it applies to

The study and determination of right and good in business settings

• Employees

• customers

• owners

• community

• other businesses

• larger society

Free Market Theory

perfectly competitive markets and business managers pursuing profits ensures members of society are served in the most socially beneficial ways

• business managers produce the goods and services most valued by society in the most efficient manner

What are counterarguments to the Free Market Theory

• Markets aren’t perfectly competitive

• Profit maximization isn’t socially beneficial

• Firms don’t produce what all members of society want or value

Shareholder Theory

Most corporation were “closely held” companied whose stock was held by a single controlling shareholder or groups closely involved in company affairs

• shareholder focus could be on profits or on employees, consumers or communities

What are the claims of supporters and detractors in respect to the shareholder theory

Supporters:

• Businesses aren’t organized to possess the expertise to engage in social activities, but are structured to produce goods and services

• Businesses that deviate from their profit-mking role may take an unfair advantage of shareholders and employees

Detractors

• short-term focus on shareholder value may not result in long-term growth and innovation, or benefit society

• exclusive focus on shareholders at the expense of other stakeholders doesn’t factor into externalities

• challenges to ideas around ownership if owners only commit to weath maximization

What is the function of the supporter role in the Shareholder theory

businesses represent a set of relationships among groups that have a bested interest in the activities of businesses

• managers & empoyees

• customers & suppliers

• Financiers (stockholders, bondholders, banks)

• communities and government

What is the stakeholder belief

That business should be focus on creating value for an entire set of stakeholders, rather than just certain shareholders.

Successful/profitable firms have values&purposes beyond profit maximization

What do critics of the stakeholder theory claim

that the theory fails to address how balance is struck, how stakeholders and defined, and may always result in shareholder primacy

Social contract theory

society establishes a special status for corporations (including limited liability) and in return, corporations have a duty to contribute to society’s overall well-being

• pollution controls

• safe products

• free marketplace

• cures from illness

What are the different theories of corporate purpose and their beliefs?

1. Stakeholders Theory: corporations should be looking at all the relationships they have (employees, gov authorities, etc) and balancing those relationships to create the best outcome consistent w/ long-term growth. Allows corporations to act against shareholders interest if it benefits the greater good.

2. Shareholders Theory: corporations should be focusing on profit maximization

3. Social Contract Theory: we have social expectations of what corporations should give back to society

Advantages & Disadvantages of Corporations

Advantages

• Pool resources

• Limit liability/risk

• Perpetual

Disadvantages

• Principle-agent problems

• Lack of moral culpability

What is corporate law

1. Procedural Requirements

   1. Governs corporations’ internal structures

   2. Provide structure for a corporation’s life cycle: formation, funding, governance, and death

   3. Govern relationships between corporate managers (directors, officers, executives) and owners (Shareholders)

2. EXAMPLES of corp law

   1. Shareholders elect board members

   2. shareholders must approve acquistions, divestitures, or sale of company

Board of Director Duties

• set corporate policy and appoint officers to execute policy, set their executive compensation, and oversee management’s operations of the business

• oversee management’s. implementation of policy and risk management

• Substantive Requirements

  • Fiduciary duties to shareholders

    • Duty of loyalty

    • Duty of care

What is the Duty of Loyalty

• Corporate officers and directors cannot deliver corporate assets, info or opportunities for personal gain

• Breached when a corporate officer or director puts her own interest ahead of those of the corporation

Examples

• Flagrant diversions

• Self dealings

Duty of Care

• Corporate officers & directors must exercise good business judgement

• Must exercise the level of care that an ordinary person would under the circumstances

Business Judgement Rule

Court will uphold the decisions of a corporate officer or director if the decision is made:

• in good faith

• with the care that a reasonable prduent person would use, and

• with the reasonable belief that the officer or director is acting in the corporation’s best interests

Pros & Cons of Business Judgement Rule

Pros:

• Requires managers to make decisions in good faith & w/ due care and loyalty

Cons:

• Doesn’t evaluate the outcomes of the decisions made by managers

How do directors exercise oversight & risk management under their duty to monitor a corporation?

Through

• regular meetings w/ management through governance process (full boards and committees)

• Authority to hire & fire corporate officers

• compensation and financial guidance

• approve acquisitions/mergers and changes in capital structure

• fundamental changes in business, strategy, and corporate policies

Caremark doctrine

A legal standard from Delaware case law requiring corporate directors to implement & monitor reasonable oversight systems for the company’s operations and legal compliance.

The Caremark standard deals with when corporate directors can be held personally liable for failing to oversee the company.

How was Caremark expanded into soft law?

Board views Caremark more broadly than “what they have to do to avoid liability”

• Economies of scale: protects companies and employees, not simply directors

• Deters excessive risk taking and focuses on the spirit of law

• Promotes reputational and corporate citizenship

How was the Caremark standard reformulated via the Stone v Ritter case?

Stone v Ritter tightened the standard to explain two specific ways that directors can breach their duty of loyalty through failure of oversight:

1. utterly failing to implement any reporting or info system/control

OR

2. having implemented such systems/controls, consciously failing to monitor or oversee its operations, disabiling themelves from being informed of risks or problems

Potential future Caremark claims

• Failure to monitor private behavior of CEO and terminate employment of a sexual predator

• failure to monitor personal political activities of CEO resulting in defamation suit for more than $1.3B in damages

• Failure to adopt best practices for background checks in connection w/ sales of assult rifles when used in a school shooting or other deadly events

• failure to ensure appropriate response to consumer boycott threats due to failure to take position on social issue

• failure to consider or oversee implementation of climate related risk controls

What is administrative law

A branch of public law created by administrative agencies in the form of rules, regulations, orders and decisions to carry out their regulatory powers and duties

Administrative agencies

Government entities — other than courts and legislatures, having authority to affect the rights of private parties through their operations

What are the basic functions of administrative agencies

• Rulemaking

• Enforcement

• Adjudication

Increased complexity of economic, social, and industrial life has enormously expanded the scope & importance of adminstrative law

Purpose of administrative agencies

• Relieves legislatures from challenges of fashioning legislation that deals w/ every detail of a specific problem

  • FTC has authority to prohibit “unfair” or “deceptive practices” along w/ rulemaking and enforcement authority

  • Administrative agencies can staff people w/ expertise in the field being regulated

  • Develops knowledge and experience in emerging issues, technologies, and provide guidance to regulated industries, public, and Congress

Note: administrative agencies can be exec agencies housed within the exec branch OR independent ones subject to legislative oversight

What are critiques of administrative agencies

1. That agencies are a fourth branch of government that function as “mini independent governments” that are dangerous depositis of irresponsibile agencies and uncoordinated powers

2. In the face of controversial issues, legislatures delegate the authority to agencies, so that they don’t have to face the political cost themselves. Thus, unpopular policy trade-offs are blamed on the agencies. Smollen believes this is true

3. Agencies have a lot of independence, as Presidents cannot supervise so large amounts of regulatory activity. Thus, they have an every-growing power.

Characteristics of Independent Agencies

1. Multi-member structure

2. Partisan balance requirements

3. Fixed, staggered terms

4. For-Cause removal protection: president can’t remove a member of an independent agency unless there is a malfesance cause

5. Culture of Independence

What do all the vesting clauses state

Congressional: “All legislative powers herein granted shall be vested in a Congress of the U.S. which shall consist of a Senate and House of Representatives

Executive: “The executive power shall be vested in a President of the US”

Judicial: “The judicial power of the US shall be vested in one SCOTUS and in such inferior courts as the Congress may establish”

Constitutional Theory of Separation of Powers

• Effort to use textualism as a bright line test (clear, objective legal rule) to identify actions by one branc encroaching on other branches’ power

• Focus on determining if activity at issue is judicial, executive, or legislative and limit assertions of power beyond constitutionally assigned powers

Purpose of Separation of Powers

• Constiution doesn’t explicity prohibit or limit delegation of power by one branch of government such as legislature to executive branch or agencies established by Congress

• System of “checks and balances” reflects intent to have shared power between branches

• Constitution ascribed unique and essential powers that a branch must be able to use

• Focus is on actual effect of use of power and whether its use infringes on core functions of other branches

Schecter Poultry legacy

High point of the SCOTUS consideration of strict on-Delegation Doctrine

• Intelligible Principle Standard

• Major Questions Doctrine

Intelligible Principle Standard

• Congress can delegate policymaking authority as long as it sets guidelines or principles to guide agency

• Courts subsequently adopted a looser and workable version of the intelligible standard

• Subsequent to 1935, SCOTUS hasn’t overturned a delegation on these grounds

Major Questions Doctrine

Adminstrative law principle requiring agencies to show clear congressional authorization before taking action on issues of vast economic/political significance

What are procedural requirements

Adjudications and rulemaking must include procedural safeguards to ensure that 5th Amendment Due Process requirements are met

Administrative Procedure Act (APA)

Law creating procedural requirements that apply to agency actions (adjudications and rulemaking)

The act allows independent judicial review of agency actions

• The reviewing court “shall decide all relevant questions of law, interpret constitutional and statutory provisions..”

• reviewing courts shall set aside agency rulemaking if “arbitrary and capricious” and fact finding if “unsupported by substantial evidence”

What are the elements of a fair hearing

1. unbiased tribunal

2. notice

3. presentation of evidence

4. right to call witness

5. right to counsel

6. a public record & statement of reasons

7. public attendance

8. judicial review

How must agency rulemakings follow APA procedures?

• Notice of proposed rule must be published

• All interested parties regarding the rule must be given an opportunity to participate

• All public input must be reviewed

• Agency the can announce their final rule

  • The rule has to explain what standards they used to come to a conclusion

What are the requirements for rules created by agencies

The rules cannot be “arbitrary and capricious”

• Agency must examine relevant data and articulate a “satisfactory” explanation for its action, including rational connection between facts found and rulemaking choices

• Can be overturned if not meeting statutory requirements

What are the substantive requirements for rules made by administrative agencies

Fed agencies (like the FTC and FCC) are created and are encouraged to administer a statute/group of statues (enforce the law)

• Federal Trade Commission Act (overseen by FTC) regulates unfair/deceptive business practices

• Federal Communications Act of 1934 (overseen by FCC) regulates broadcasting, telecommunication, and internet-related issues

Non-Delegation Doctrine and Intelligible Principle Standard

• Congress can’t delegate policy authority to agencies, BUT SCOTUS hasn’t applied this law (they’ve been prettyy lenient)

• Congress can delegate policymaking authority IF it sets guidelines or principles

  • The guidelines is the intelligible principle standard

• Major Questions Doctrine is recent (2022) and makes it harder to delegate legislative power to agencies, as it requires clear congressional authorization

Chevron (1984) and Loper Bright (2024)’s relevance to the substantive requirements on/of Federal Agencies

Loper Bright overturned Chevron. The three doctrines

1. Non-delegation doctrine

2. Intelligible Principle Standard

3. and the chevron/loper decision

relate to how power is divided. 

Implication of Judicial Reasoning of Loper Bright

• Courts must exercise independent judgement on questions of statutory interpretation instead of just asking agencies for their opinions

  • Respectful consideration can be given to agency views, esp consistent views (as stated in Skidmore v Swift & Co)

  • Majority still suggests courts should remain deferential to agency fact finding

• Congress must explicitly give agencies the discretion to fill up the details of statutory scheme

Broader Implications

• shifts interpretive power from agencies to courts

• avoids repeated shifts in agency positions

• creates uncertainty about prior agency interpretations

• may reduce flexibility/responsiveness of the regulatory system

• may increase litigation challenges to agency actions

• continues trend of limiting federal agency power

Federal Trade Commission History & Structure

FTC created as an independent agency
Mission: protecting the public from deceptive/unfair business practices and methods of competition trhough law enforcement, advocacy, research, and education

• Create & share programs for consumers and businesses

• Remove deceptive business practices

• Advance consumer interest by sharing expertise w/ legislatures & agencies

• Develop policy & research tools via workshops, conferences, and hearings

Structure

• 5 commissoners nominated by the President & confirmed by the Senate

  • Max of 3 from the same political party

  • Serve 7-year staggered terms

• One commissioner acts as chair

Federal Trade Commission regulation on Consumer protection & unfairness

The original FTC ACt of 1914 only addressed unfair methods of competition, but it was amended in 1938 to prohibit unfair/deceptive acts or practices. This expands the mission beyond protecting consumers and focusing on antitrust

In 1964, FTC issued the Cigarette Rule and controversy regarding this rule led to them defining unfairness in Section 5 of the FTC Act

i lowk dont understand this

Cigarette Rule

In 1964, FTC defined its test for unfairness as

1. whether practice offends public policy

2. whether it is immoral, unethical, oppressive, or unscrupulous

3. whether it causes substantial injury to consumers/competitors/other businesses