© 2010 Pearson Education, Inc., publishing as Prentice-Hall 1 ADMINISTRATIVE LAW AND REGULATORY AGENCIES © 2010 Pearson Education, Inc., publishing as Prentice-Hall CHAPTER 43

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 2 Administrative Agencies Created by legislative and executive branches of federal, state, and local governments to assist in implementing and enforcing law. –E.g., federal SEC, state Environmental Protection Agency, local zoning board. Operation of agencies governed by administrative law.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 3 General Government Regulation Applies to businesses and industries collectively. –E.g., NLRB oversees labor union and management activity, –OSHA regulates safety and health standards for workers, –Consumer Product Safety Commission mandates safety standards for all products sold.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 4 Specific Government Regulation Many industries are subject to specific regulation that regulates companies in that industry. –Banking (Federal Reserve) –Television (FCC) –Railroads (FRA) –Commercial airlines (FAA) –Food and drug companies (FDA)

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 5 Administrative Law Combination of substantive and procedural law. –Substantive law is the law that the agency enforces. E.g., the Clean Air Act. –Procedural law establishes the rules that agency must follow in enforcing the substantive law. E.g., notice, hearing requirements for issuing pollutant discharge permits.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 6 Administrative Procedure Act Establishes certain administrative procedures that federal administrative agencies must follow. –E.g., notice and hearing requirements, –rules for conducting agency adjudicative actions, –procedures for rulemaking. Most states have enacted administrative procedural acts to govern state administrative agencies.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 7 Administrative Law Judge (ALJ) Employee of the agency. Presides over administrative proceedings. –Decides questions of law and fact. –No jury. –Issues decision in form of an order. –Any appeal of order goes first to agency for review, then to appropriate court.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 8 Delegation of Powers When agency is created, it is delegated certain powers (“delegation doctrine”). –Legislative powers –Executive powers –Judicial powers Unconstitutional for agency to act outside the scope of its delegated powers.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 9 Delegated Legislative Powers Substantive rule making Interpretive rule making Issuing policy statements Granting licenses

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 10 Rule Making Federal agencies may issue substantive rules. –Have force of law. –Must be adhered to by covered persons and businesses. –Violators may be held civilly or criminally liable. –All substantive rules are subject to judicial review.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 11 Substantive Rule Making Must follow APA procedures: –Notice of proposed rules published in Federal Register. –Interested parties given opportunity to participate. Informal rule making: Notice-and-comment. Formal rule making: Agency conducts trial-like hearing. –Agency then announces final rule making.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 12 Interpretive Rules Rules issued by administrative agencies that interpret existing statutory language. These rules do not establish new laws. Neither public notice nor public participation is required.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 13 Statements of Policy Statement announcing proposed course of action that agency intends to follow in the future. These statements do not have the force of law. Public notice and participation not required.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 14 Licensing Power Statutes may require government license before a person can enter certain types of industries or professions. –E.g., banking, medicine. Agencies have power to determine whether to grant licenses to applicants; power to suspend or revoke licenses. Agency decisions subject to court review, but courts usually defer to agency’s expertise.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 15 Judicial Power Authority to adjudicate cases through an administrative proceeding. Initiated when agency serves a complaint on a party for violation of a statute, administrative rule, or order. Must give procedural due process. –Proper and timely notice. –Opportunity to present evidence.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 16 Executive Power Investigation and prosecution of possible violations of statutes, administrative rules, and administrative orders. May obtain information voluntarily or via administrative subpoena. –Can seek judicial enforcement if party fails to comply.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 17 Administrative Searches Agency may not conduct unreasonable search and seizure. Search is reasonable if: Party voluntarily agrees, or Agency has valid search warrant, or Business or industry covered by warrantless searches provisions. –E.g., liquor sales, firearms sales, coal mines. Evidence from unreasonable search and seizure is inadmissible in court.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 18 Judicial Review of Agency Actions Decisions of federal agencies appealed to appropriate federal court. Decisions of state agencies appealed to appropriate state court. Party appealing agency decision is petitioner.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 19 Appeal of Federal Agency Rule, Order, or Decision Administrative Law Judge (ALJ) Federal Administrative Agency U.S. District Court U.S. Court of Appeals U.S. Supreme Court Whether the appeal from the Federal Administrative Agency is to the U.S. District Court or the U.S. Court of Appeals is determined by the federal law in question.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 20 Disclosure of Administrative Agency Actions Public concern over possible secret agency actions induced Congress to pass several statutes that: –Promote public disclosure. –Protect parties from overly abusive agency actions.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 21 Freedom of Information Act Requires that most documents of federal administrative agencies be available to the public. Requires agencies to publish their proceedings, rules, regulations, and other information in the Federal Register. Specifies time periods for agency response to information requests, sets limits on copying charges, and provides for disciplinary action against employees who refuse to honor requests.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 22 Freedom of Information Act (continued) Documents exempt from disclosure: –Those classified as in the interest of national security. –Those that are statutorily prohibited. –Records whose disclosures would interfere with law enforcement proceedings. –Medical, personnel, and similar information. –Papers containing trade secrets, confidential, or privileged information. All decisions not to disclose requested documents are subject to judicial review.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 23 Government in the Sunshine Act Requires that most meetings of federal administrative agencies be open to the public. Exceptions include meetings: –Where a person is accused of a crime. –Concerning an agency’s issuance of a subpoena. –Where public attendance would frustrate the implementation of an agency action. –Concerning daily operations. All decisions not to close a meeting to the public are subject to judicial review.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 24 Equal Access to Justice Act Protects private parties from harassment by federal administrative agencies. – Party subject to an unjustified federal administrative agency action has right to sue. –May recover attorneys’ fees and costs. –Agency action complained of must be outrageous to justify award.

© 2010 Pearson Education, Inc., publishing as Prentice-Hall 25 Privacy Act –Requires that federal administrative agencies maintain only information that is relevant and necessary. –Must be needed to accomplish a legitimate agency purpose. –Gives individuals access to records concerning them, and a right to correct these records.