©2001 West Legal Studies in Business. All Rights Reserved. 1 Chapter 6: Administrative Law.

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Presentation transcript:

©2001 West Legal Studies in Business. All Rights Reserved. 1 Chapter 6: Administrative Law

©2001 West Legal Studies in Business. All Rights Reserved. 2 IntroductionIntroduction Administrative Law is the rules, orders, and decisions of federal, state, and local government agencies established to perform a specific function.

©2001 West Legal Studies in Business. All Rights Reserved. 3 § 1: Agency Creation and Powers The study of Administrative Law requires an understanding of: –Enabling Legislation. –The Types of Agencies. –Agency Powers and the Constitution.

©2001 West Legal Studies in Business. All Rights Reserved. 4 Enabling Legislation Enabling legislation is a law passed by Congress to specify the name, purposes, functions, and powers of administrative agency. Federal administrative agencies may exercise only those powers that Congress has delegated to them in enabling legislation. Through similar enabling acts, state legislatures create state administrative agencies.

©2001 West Legal Studies in Business. All Rights Reserved. 5 Types of Agencies There are two basic types of administrative agencies: –Executive Agencies, including cabinet departments of the Executive Branch and their sub-departments. –Independent Regulatory Agencies outside the major executive departments.

©2001 West Legal Studies in Business. All Rights Reserved. 6 Agency Powers and the Constitution Administrative agencies make legislative rules, or substantive rules, that are as legally binding as laws that Congress passes. Administrative agencies are sometimes referred to as the “fourth branch” of the U.S. government. Article I of the U.S. Constitution authorizes delegating such powers to administrative agencies.

©2001 West Legal Studies in Business. All Rights Reserved. 7 § 2: Administrative Process Administrative process include three functions: –Rulemaking. –Investigation. –Adjudication.

©2001 West Legal Studies in Business. All Rights Reserved. 8 RulemakingRulemaking Rulemaking is the formulation of new regulation. Notice and Comment Rulemaking involves three steps: –Notice of the proposed rulemaking. –Comment Period. –The Final Rule. Case 6.1: AT&T Corp. v. Iowa Utilities Board (1999).AT&T Corp. v. Iowa Utilities Board

©2001 West Legal Studies in Business. All Rights Reserved. 9 InvestigationInvestigation The purpose of investigations is to ensure that the rule issued is based on a consideration of relevant factors rather than being arbitrary and capricious, which include the powers to: –Conduct Inspection. –Issue Subpoenas. »Subpoenas duces tecum -- requiring the production of documents »Subpoenas ad testificandum -- requiring testimony Case 6.2: Federal Deposit Insurance Corp. v. Wentz (1995).Federal Deposit Insurance Corp. v. Wentz

©2001 West Legal Studies in Business. All Rights Reserved. 10 AdjudicationAdjudication Administrative law provides a mechanism for adjudication of suspected rule violations. –Negotiate settlements. –Formal Complaints. –Hearing before Administrative Law Judges. –Agency Orders. –Case 6.3 Buck Creek Coal, Inc. v. Federal Mine Safety and Health Administration (1995).Buck Creek Coal, Inc. v. Federal Mine Safety and Health Administration

©2001 West Legal Studies in Business. All Rights Reserved. 11 § 3: Limitations on Agency Powers All three constitutionally created branches of government have some measure of control over administrative agencies.

©2001 West Legal Studies in Business. All Rights Reserved. 12 Judicial Controls The Administrative Procedures Act provides for judicial review of most agency actions. A party seeking review must demonstrate standing to sue, there must be actual controversy at issue, and have exhausted all possible administrative remedies. Judicial review of agency action will frequently address whether the agency has acted beyond its authority or failed to discharge its responsibility.

©2001 West Legal Studies in Business. All Rights Reserved. 13 Executive Controls Executive branch of government exercises control over agencies through: –President power to appoint federal officers, and –President’s veto power.

©2001 West Legal Studies in Business. All Rights Reserved. 14 Legislative Controls The Congress exercises controls over agencies powers by: –Enacting and changing enabling legislation. –Determining funding for the agency. –Investigating agency actions. –Freezing agency enforcement efforts before they take effect. –Amending the Administrative Procedures Act.

©2001 West Legal Studies in Business. All Rights Reserved. 15 § 4: Public Accountability A number of pieces of legislation make agencies more accountable through public scrutiny. –Freedom of Information Act. –Government in the Sunshine Act. –Regulatory Flexibility Act. –Small Business Regulatory Enforcement Fairness Act.

©2001 West Legal Studies in Business. All Rights Reserved. 16 Freedom of Information Act This legislation requires the federal government to disclose certain “records” to “any person” on request, even if no reason is given for the request. All federal government agencies are required to make their records available electronically.

©2001 West Legal Studies in Business. All Rights Reserved. 17 Government in the Sunshine Act The legislation requires that “every portion of every meeting of an agency” be open to “public observation.” Adequate notice of meetings must be given to the public. Closed meetings are authorized in a limited number of instances.

©2001 West Legal Studies in Business. All Rights Reserved. 18 Regulatory Flexibility Act Concerned over the effects of regulation on the efficiency of businesses, Congress passed the Regulatory Flexibility Act that requires an analysis of the cost a regulation will impose on small business and the considerations of less burdensome alternatives.

©2001 West Legal Studies in Business. All Rights Reserved. 19 Small Business Regulatory Enforcement Fairness Act This Act allows Congress to review new federal regulations for at least sixty-day before they can take effect.

©2001 West Legal Studies in Business. All Rights Reserved. 20 §5: State Administrative Agencies Generally state administrative agencies parallel the federal agencies. –IRS (federal) and State revenue agencies. –EPA (federal) and State natural resource agencies. If there is a conflict between the federal and state agency, the federal agency will prevail.

©2001 West Legal Studies in Business. All Rights Reserved. 21 Law on the Web Federal Web Locator.Federal Web Locator U.S. Government Printing Office (GPO Access).U.S. Government Printing Office (GPO Access Legal Research Exercises on the Web.