Week 8 Introduction to Administrative Agencies and the APA

Overview of Administrative Agencies (Chapter 13)

• Context of the Lecture:

  • This material covers the first part of Chapter 13, focusing on an introduction to administrative agencies.
  • The second part of the chapter (to be covered later) will address the Administrative Procedures Act (APA), agency interactions with the courts, and their relationships with the three branches of government.
  • Agencies perform a significant portion of government work despite not being one of the formal branches of government defined in the Constitution.
  • The primary role of administrative agencies is to translate general statutory directives from the legislature into concrete requirements or prohibitions that govern the public.

• Federal vs. State Agencies:

  • The primary focus is on federal agencies, though state-level agencies exist and often mirror federal structures.
  • Federal agencies are governed by specific statutes that dictate their operational boundaries.
  • Recent Supreme Court rulings have changed how agency decisions are treated by the courts.

• Course Logistics and Schedule:

  • Statute Assignment: Due in week $10$, opens in week $9$. Instructions will be provided in week $9$.
  • Film Premiere: Week $10$ in the Event Center. Assignment requires a small paragraph connecting the film to the course.
  • Wrapping Up: Weeks $12$ and $13$ will wrap up the course material.
  • Review: Week $14$ is designated for review, though review begins between weeks $13$ and $14$.
  • Final Exam: Cumulative, including concepts like the "ambulance hypothetical" and new case file additions. The exam format mirrors the "NextGen" exams, utilizing case files for analysis.

Defining Administrative Agencies

• The Administrative Procedures Act (APA) Definition:

  • The APA defines an agency as "each authority of the government of the United States."
  • Explicit exclusions from the definition of an "agency" under the APA include:
    • The United States Congress.
    • The federal courts.
    • The President of the United States (determined by common law).
    • State governments.

• Two Major Types of Agencies:

  1. Executive Agencies: These fall directly under the control of the President (e.g., the Food and Drug Administration).
  2. Independent Agencies: These are generally less subject to presidential influence. They are typically headed by a multi-member, bipartisan board whose members serve fixed terms. They are funded exclusively by Congress through the power of the purse.

• Common Naming Conventions and Varieties:

  • Commissions: Examples include the Federal Communications Commission (FCC) and the Fish and Wildlife Commission. Florida has its own Fish and Wildlife agency due to the state's geography.
  • Federal Corporations: These are government agencies that operate like businesses. Examples include the Federal Deposit Insurance Corporation (FDIC)—which insures bank accounts up to $100,000$—and the United States Postal Service (USPS), which has its own budget but remains a government agency.
  • Administrations: Examples include the Social Security Administration (SSA), which handles disability, retirement, and Social Security numbers, and the Food and Drug Administration (FDA).

The Rationale for Agency Regulation

• Specialized Expertise:

  1. Agencies possess deep, relevant expertise in specific areas that generalist legislatures or judiciaries lack.
  2. Example: The Environmental Protection Agency (EPA) utilized its expertise to declare the "snail darter" an endangered species, which was sufficient power to halt the building of the Tellico Dam after $20$ years of production.

• Responsiveness to the Electorate:

  • Agencies can be more responsive to public needs than the judiciary, though they are often less responsive than the legislature. In the Tellico Dam incident, the legislature eventually stepped in to create an exception to the EPA's regulation.

• Market Failure and Public Protection:

  • Without agency regulation, only market forces would govern public safety.
  • Example (Prisons): Private entities running phones, food, and medical care in prisons often prioritize profit over quality. A recent development includes Florida jails using tablets for communication with lawyers/family, which involves associated fees.
  • Example (Washington Monument Reflecting Pool): A project to repaint the pool cost $16,000,000$, yet the paint is already peeling. This was cited as a failure of a "no-bid contract" where competition and quality control (market forces/regulation) were bypassed in favor of personal connections.

Historical Case Study: The Massengill Tragedy

• The Elixir Sulfanilamide Incident:

  • The drug Elixir Sulfanilamide caused the deaths of over $100$ people, many of whom were children.
  • The deaths were caused by the inclusion of diethylene glycol (a poisonous solvent) in the drug.
  • The company knew of the danger but was slow to issue a recall, doing so only after government pressure. They admitted no responsibility.
  • At the time, the U.S. Department of Agriculture regulated such products but lacked the power to seize or prosecute for the distribution of a deadly drug.

• Key Figure:

  • Frances Oldham Kelsey: An FDA scientist who identified the poisonous component in the elixir. Her work led to increased powers for the FDA to manage food and drug safety.

Agency Capture Theory

• Definition: The idea that, over time, the entities an agency is supposed to regulate begin to exert significant influence over the regulators. If successful, the agency begins to protect the industry rather than the public.
• Industry Examples:
  • Media/FCC: The lecturer noted the FCC's involvement in the Paramount/Warner Brothers merger. While Netflix's attempt to buy Warner Brothers was rejected, Paramount's attempt was viewed differently. Influence was also noted regarding Stephen Colbert's jokes about Trump and the conditions surrounding the approval of certain media deals.
  • Drug Companies: Significant influence over the drug approval process, cited in the context of the rapid development and approval of COVID-$19$ vaccines.
  • Food Industry: Influence over the "Food Pyramid." New versions favor meat and dairy products (referencing the influence of figures like RFK Jr. and Paleo advocates).
  • Banking: Large banks exert control over regulations. This was highlighted by the housing bubble and the Great Recession, where mortgages were treated as investment vehicles, leading to widespread foreclosures.

Historical Development of Administrative Law

• Interstate Commerce Commission (ICC): The first independent regulatory agency, created to monitor commerce across state lines (e.g., trains and ships) under the Commerce Clause.
• The New Deal and "Alphabet Agencies": Under Franklin D. Roosevelt (FDR), numerous executive agencies were created to combat the Great Depression by providing federal jobs and building economic infrastructure (e.g., FBI, CIA, SSA, FDIC).

Administrative Procedures Act (APA) Operations

• Rulemaking Procedures:

  1. Notice of Proposed Rulemaking: The agency publishes the proposed rule in the Federal Register.
  2. Comment Period: Usually a period of $30$ to $60$ days for public comment. Public outcry can create political pressure on the agency.
  3. Final Rule: The agency publishes the final rule with an explanation in the Federal Register. This rule then carries the force of law.

• Adjudicatory Procedures:

  1. Filing: A statement of matters of fact and law is filed to request an adversary hearing (similar to a court complaint).
  2. Hearing: Conducted before an Administrative Law Judge (ALJ). ALJs are not Article III judges. Some courts, like Immigration and Bankruptcy courts, are technically considered agencies rather than part of the judicial branch.

• Investigations and Inspections:

  • Agencies have broad discretion to open investigations (e.g., the EEOC investigating patterns of discrimination).
  • Powers include issuing subpoenas, surprise inspections, and compelling testimony.
  • Unlike civil court procedures, agencies often have the power to show up and demand documents without the lengthy discovery process found in standard litigation.

The Enabling Act and Delegation of Power

• Enabling Act (Organic Act): The specific legislation passed by Congress that creates an agency and defines its powers.
• Intelligible Principle Doctrine:
  • Congress cannot simply delegate unchecked power to an agency. It must provide an "intelligible principle"—a set of guidelines and standards for the agency to follow.
  • A mandate to "fix the economy" would be too broad and unconstitutional. A mandate to "create an insurance system for banks to prevent bankruptcy during recessions" (such as the FDIC) is a sufficiently narrow delegation.

Case Study: The Ambulance Hypothetical

• Fact Pattern: The City Council delegated power to manage the PPSO to the Commission of Parks (acting as an agency).
• Analytical Steps:
  1. Step 1: Confirm if the legislative authority was actually delegated to the agency.
  2. Step 2: Determine if judicial power (holding hearings) was delegated and if it is constitutional under the public/private rights doctrine.
  3. Step 3: Determine if the agency properly exercised its rulemaking power under the APA.
• Interpretation Problem: The Commission of Parks created a specific definition for "motor vehicle": "a road vehicle driven by a motor or engine used or physically capable of being used upon any public highway in the state in the transportation of persons or property."

Questions and Discussion

• Q: Which of the following is considered an agency under the APA?
  • Options: Regulatory Commission, U.S. Congress, President of the United States, State Legislature.
  • A: Regulatory Commission. The others are specifically exempted.
• Q: Independent agencies are generally less subject to presidential influence because they are…
  • A: Headed by a multi-member bipartisan board serving fixed terms.
• Q: Which document should be consulted first when determining whether an agency has authority to act?
  • A: The Enabling Act (or Organic Act).
• Q: What are the three primary ways agencies act?
  • A: Adjudicating, rule-making, and investigating. They do not legislate (only Congress legislates).
• Q: Why is the President not considered an agency?
  • A: Pursuant to common law (not the APA or the Constitution).