Chapter 18 Administrative Law Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

18-2 Definition, Function and Sources of Administrative Law Administrative law is the body of law, drawn from various sources, that defines and regulates federal regulatory agencies and limits the exercise of authority by these agencies. Federal regulatory agencies are bodies that function within a particular executive branch department (such as the IRS functioning within the Department of the Treasury).

18-3 Primary Functions of Administrative Agencies Administrative agencies have a wide range of functions related to: –formation, –implementation, and –enforcement of regulations.

18-4 Policymaking Administrative agencies are charged by Congress to study potential solutions to a problem and then to exercise a legislative function by creating legally enforceable rules, known as administrative regulations, that purport to satisfy Congress’s will by filling in the details of the statute. This policymaking function is known as rulemaking.

18-5 Investigation and Enforcement Responsibilities include: –investigating alleged violations of the agency’s administrative regulations, and –recommending enforcement actions such as fines and other sanctions.

18-6 Licensing and Permitting Examples include the Securities and Exchange Commission issuing licenses to certain individuals involved in public trading of stocks, or the Federal Communications Commission’s licensing of television and radio stations. Agencies also issue permits such as those issued by the Environmental Protection Agency to control air and water pollution.

18-7 Sources of Administrative Law U.S. Constitution Administrative Procedures Act (APA) Enabling Statutes Common Law

18-8 Rulemaking The rulemaking process is set out in the APA and is supplemented by the enabling statutes passed by Congress. In practice, much of an agency’s rulemaking duties are carried out through informal rulemaking procedures that are permitted under the basic structure of the APA.

18-9 Enforcement, Licensing, and Inspection Enforcement: the U.S. Supreme Court has ruled that agencies have broad discretion in when and whom to regulate. Administrative agencies also regulate and administer laws through licensing. Some agencies also monitor compliance with administrative regulations by conducting inspections of businesses and individuals within their jurisdiction.

18-10 Adjudication Adjudication: hearing where government and the private party each presents evidence in a quasi-judicial setting In most agencies, the presiding officer is an administrative law judge (ALJ) who is typically an attorney employed by the agency to adjudicate disputes.

18-11 Appeals The losing party in an ALJ case generally has an automatic appeal to the administrative head of the agency who may overturn or affirm the ALJ’s ruling.

18-12 Limits on Administrative Agencies The legislative, executive, and judicial branches all have various means of power that limit the authority of administrative agencies.

18-13 Executive Branch Appointments Clause Direct Power

18-14 Congress Congress may exercise their constitutionally granted power of the purse over government funding of particular agencies, or Enact legislation that restricts an agency’s authority, or pass a new law to overrule an administrative regulation.

18-15 Judicial Review Statutory Interpretation by Agencies Applying the Arbitrary and Capricious Standard