Chapter 23 & 24

Administrative agency Law

-congress or state legislature usually adopts a general statute and these statues can create an administrative agency to help carry out the rules of the statute

-benefits to society, environment, etc result from administrative law, but there are great costs to businesses

Types of Agencies

• federal executive agencies: These agencies are formed to help the president carry out executive functions (cabinet)

• independent regulatory agencies: These are outside the major executive departments ((SEC), (EPA))

Agency Powers and the Constitution

Executive - Appointment of officers and veto power

Legislative - Enabling legislation and allowing Congress to abolish an agency to defund

Judicial - Court review of agency actions but this is subject to 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.

Administrative Procedure Act of 1946 (APA)

The set of procedural rules which the agencies and those who deal with the agencies must follow.

Fair notice

What the agencies will do against out company

Rule making process

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

Notice-comment-rulemaking

• notice of proposed rule is published

• the public can comment on it

• revision or final publication in the code of federal regulations

• Informal agency action: interpretative rules

Agency enforcement

1. inspections - Used to gather information

2. subpoenas - Order from the court to do something

   -(subpoena ad testificandum): To someone who is called to testify

   -(Subpoena duces tecum): Someone called to bring something

   Limits: To what the agencies can demand

3. search warrants - Says to search a specific place for a specific item

Adjudication (to judge)

1. Negotiated settlements: Rectify the problem and avoid the need for any additional proceedings

2. Formal complaints: The Agency may issue one if a settlement isn't reached

3. The role of the Administrative law judge: The person who proceeds over the trial

4. Hearing procedures: resembles a trial in many respects

5. Agency orders: Says the money that you owe, or whatever was decided upon

deceptive advertising

when a reasonable consumer would be misled by the advertising claim

Claims Based on Half-Truths

A "half-truth" is true but incomplete information that may lead consumers to a false conclusion

Bait and Switch Advertising

Advertising a product at an attractive price and then telling the consumer that the advertised product is not available or is of poor quality and encouraging her or him to purchase a more expensive item.

Online Deceptive Advertising

•Deceptive online retail practices such as making unsubstantiated claims or failing to disclose qualifying information

•Regulated under FTC website guidelines

FTC actions against deceptive advertising

• formal complaint: allegations against advertising

• FTC orders and remedies:

  <>Cease and desist order: requiring the company to stop the challenged advertising

  <>Counter advertising: requires the company to advertise anew—in print, on the Internet, on radio, and on television—to inform the public about the earlier misinformation.

• Multiple product orders: False advertising of multiple products

• Damages: Damages go to FTC Restitution: Money going back

False advertising under the Lanham Act

business must establish each of the following elements:

• An injury to a commercial interest in reputation or sales.

• Direct causation of the injury by false or deceptive advertising.

• A loss of business from buyers who were deceived by the advertising.

State Laws Concerning False Advertising (TX Deceptive trade practices act) (DTPA)

Texas consumer law, has a long list of deceptive and unfair practices for which a merchant/seller of goods can be liable Remedies: Treble DAS, Attorney's fees, cost of court

telemarketing and fax advertising

The Telephone Consumer Protection Act of 1991 (TCPA) prohibits telephonic solicitation for any sales by using an automatic telephone dialing system or a prerecorded voice system.

Enforced by the Federal communication commission (FCC) and its $11,000/day for violations

Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994

• Before pitch seller must say what he is selling, this is a sales call, and who the seller is

• Must say total cost and if it's refundable

• Must remove consumer's name from its list of potential contracts if consumer requests

cooling-off period

buyers of goods in some instances can cancel their contracts in 3 business days. Examples: trade show sales, home equity laws, Internet contracts, door-door sales.

FTC Mail, Internet or Telephone Order Merchandise Rule

• Ship goods within promised time

• Notify customers when order ships

• Issue refunds within a certain time

labeling and packaging laws

Labeling must be accurate and must use words that are easily understood by the ordinary consumer

Sometimes a warning label, or a label of specific raw materials must be added

Energy policy and conversion act (Governed by the EPA)

Car manufactures selling NEW car must have estimated fuel economy.

Food Labeling

1. identify food

2. Net quantity of food

3. Serving size if # of servings is stated

4. Manufacturer

5. Packager of distributer

Nutrition Labeling and Education Act of 1990

Requires standard nutrition facts and controls the use of words like "fresh" and "low fat" etc.

Federal Food, Drug, and Cosmetic Act

• Protects consumers against misbranded or adulterated food, drugs

• Establishes food standards and the safe levels of potential hazardous additives

• drugs must be effective and safe

• Additives that might cause cancer are banned

• FDA regulated medical devices and equipment

• FDA Monitors and enforces the FFDCA

Consumer product safety Act (CPSA)

• regulates potentially dangerous consumer products like tobacco

• Created the consumer product safety commission

The CPSC authority

1. set safety standards for consumer products

2. ban the manufacture/sale of any product commission believes poses an "unreasonable risk" to consumers

3. remove from market any product it believes to be "imminently hazardous"

4. require manufacturers to immediately notify CPSC of products already sold or intended for sale if manufacturer receives info that the product is hazardous

5. administer other product safety legislation