1. © 2004 West Legal Studies in Business A Division of Thomson Learning 1 Chapter 43 Administrative Law Chapter 43 Administrative Law

2. © 2004 West Legal Studies in Business A Division of Thomson Learning 2 Introduction Administrative Law is the rules, orders, and decisions of federal, state, and local government agencies established to perform a specific function.

3. © 2004 West Legal Studies in Business A Division of Thomson Learning 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. The study of Administrative Law requires an understanding of:  Enabling Legislation.  The Types of Agencies.  Agency Powers and the Constitution.

4. © 2004 West Legal Studies in Business A Division of Thomson Learning 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. 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.

5. © 2004 West Legal Studies in Business A Division of Thomson Learning 5 Types of Agencies There are two basic types of administrative agencies:  Executive Agencies. Cabinet-level departments of the Executive Branch and their sub-departments.  Independent Regulatory Agencies. Agencies outside the major executive departments such as the Federal Aviation Administration or the Federal Communications Commission. There are two basic types of administrative agencies:  Executive Agencies. Cabinet-level departments of the Executive Branch and their sub-departments.  Independent Regulatory Agencies. Agencies outside the major executive departments such as the Federal Aviation Administration or the Federal Communications Commission.

6. © 2004 West Legal Studies in Business A Division of Thomson Learning 6 Agency Powers and the Constitution Administrative agencies make legislative rules, or substantive rules, that are as legally binding as laws that Congress passed. 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. Administrative agencies make legislative rules, or substantive rules, that are as legally binding as laws that Congress passed. 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.

7. © 2004 West Legal Studies in Business A Division of Thomson Learning 7 § 2: Administrative Process Administrative process includes three functions:  Rulemaking.  Investigation.  Adjudication. Administrative process includes three functions:  Rulemaking.  Investigation.  Adjudication.

8. © 2004 West Legal Studies in Business A Division of Thomson Learning 8 Rulemaking Rulemaking is the formulation of new regulation. Notice and Comment Rulemaking involves three steps:  Notice of the proposed rulemaking (NPRM).  Comment Period.  The Final Rule. Case 43.1: AT&T Corp. v. Iowa Utilities Board (1999). Rulemaking is the formulation of new regulation. Notice and Comment Rulemaking involves three steps:  Notice of the proposed rulemaking (NPRM).  Comment Period.  The Final Rule. Case 43.1: AT&T Corp. v. Iowa Utilities Board (1999).

9. © 2004 West Legal Studies in Business A Division of Thomson Learning 9 Investigation 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 requires production of documents. Subpoenas ad testificandum requires testimony. Case 43.2: FTC v. Ken Roberts Co. (2001). 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 requires production of documents. Subpoenas ad testificandum requires testimony. Case 43.2: FTC v. Ken Roberts Co. (2001).

10. © 2004 West Legal Studies in Business A Division of Thomson Learning 10 Adjudication The law provides a mechanism for administrative adjudication of suspected rule violations:  Negotiate settlements.  Formal Complaints.  Hearing before Administrative Law Judge.  Agency Orders. The law provides a mechanism for administrative adjudication of suspected rule violations:  Negotiate settlements.  Formal Complaints.  Hearing before Administrative Law Judge.  Agency Orders.

11. © 2004 West Legal Studies in Business A Division of Thomson Learning 11 § 3: Limitations on Agency Powers All three constitutionally created branches of government have some measure of control over administrative agencies.

12. © 2004 West Legal Studies in Business A Division of Thomson Learning 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. 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.

13. © 2004 West Legal Studies in Business A Division of Thomson Learning 13 Executive Controls Executive branch of government exercises control over agencies through:  President power to appoint federal officers, and  President’s veto power. Executive branch of government exercises control over agencies through:  President power to appoint federal officers, and  President’s veto power.

14. © 2004 West Legal Studies in Business A Division of Thomson Learning 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. 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.

15. © 2004 West Legal Studies in Business A Division of Thomson Learning 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. 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.

16. © 2004 West Legal Studies in Business A Division of Thomson Learning 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. 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.

17. © 2004 West Legal Studies in Business A Division of Thomson Learning 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. 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.

18. © 2004 West Legal Studies in Business A Division of Thomson Learning 18 Regulatory Flexibility Act Concern over the effects of regulation on the efficiency of businesses, Congress passed the Regulatory Flexibility Act which requires an analysis of the cost a regulation will impose on small business and must consider less burdensome alternatives.

19. © 2004 West Legal Studies in Business A Division of Thomson Learning 19 Small Business Regulatory Enforcement Fairness Act This Act allows Congress to review new federal regulations for at least sixty-days before they can take effect.

20. © 2004 West Legal Studies in Business A Division of Thomson Learning 20 § 5: State Administrative Agencies Cooperation and Conflicts between Parallel Federal and State Agencies. Judicial Review of State Agency Actions.  Case 43.3: Swift v. Sublette County Board of County Commissioners (2002). Cooperation and Conflicts between Parallel Federal and State Agencies. Judicial Review of State Agency Actions.  Case 43.3: Swift v. Sublette County Board of County Commissioners (2002).

21. © 2004 West Legal Studies in Business A Division of Thomson Learning 21 Law on the Web The Administrative Procedures Act (1946). Federal Web Locator. Federal Web Locator Internet Law Library (CFR). Legal Research Exercises on the Web. The Administrative Procedures Act (1946). Federal Web Locator. Federal Web Locator Internet Law Library (CFR). Legal Research Exercises on the Web.