Chapter 6 Administrative Law

1. EIGHTH EDITION Chapter 6 Administrative Law Text and Cases The Legal Environment of Business Cross Miller Ethical, Regulatory, Global, and Corporate Issues

2. § 1: The Practical Significance of Administrative Law • Administrative law is created by administrative agencies which regulate many areas of our government, community, and businesses. • A significant cost of ‘doing business’ requires compliance with administrative and agency laws. 

3. The Practical Significance of Administrative Law • Administrative Agencies Exist at All Levels of Government. • Agencies Provide Comprehensive Regulatory Scheme. • Many businesses have incentive to influence the regulatory environment.

4. § 2: Agency Creation and Powers • The study of administrative law requires an understanding of: • Enabling Legislation.  • The Types of Agencies.  • Agency Powers and the Constitution. 

5. Enabling Legislation • Federal Trade Commission (FTC) granted power to: • 1. To create “rules and regulations for the purpose of carrying out the Act.” • 2. To conduct investigations of business practices. 

6. Enabling Legislation • FTC granted power to (cont’d): • 3. To obtain reports from interstate corporations concerning their business practices. • 4. To investigate possible violations of federal antitrust statutes.

7. Enabling Legislation • FTC granted power to (cont’d): • 5. To publish findings of its investigations. • 6. To recommend new legislation. • 7. To hold trial-like hearings to resolve disputes.

8. Types of Agencies • There are two basic types of administrative agencies: Executive Agencies (e.g., EPA and cabinet level) and Independent Regulatory Agencies (e.g., Securities Exchange Commission, Internal Revenue Service).

9. Agency Creation and Powers • Agency Powers and the Constitution. • Legislative Rules: act as legally binding as laws passed by Congress. Agencies also pass interpretive rules. • The Delegation Doctrine. • Executive Controls: Presidential veto power. 

10. Agency Creation and Powers • Agency Powers and the Constitution. • Judicial Controls. • Exhaustion Doctrine: party seeking court review must first exhaust all administrative remedies before filing suit. • Ripeness Doctrine: court will not review administrative decision until it is ‘ripe’ for review.

11. § 3: The Administrative Procedure Act • In the absence of clear Congressional direction, all federal agencies must follow APA procedural requirements in notice, rulemaking, and adjudication. 

12. The Administrative Procedure Act • Arbitrary and Capricious Test: • The APAgives courts power to hold agencies’ actions “arbitrary and capricious” if they are not in compliance with constitutional due process. • CASE 6.1 FCC v. Fox Television Studios, Inc. (2009). Are the FCC’s indecency rules too ‘vague’?

13. The Administrative Procedure Act • Rulemaking: formulation of new regulation.Notice and Comment Rulemaking involves three steps: • Notice of the Proposed Rulemaking. • Comment Period. • The Final Rule. • Informal Agency Action: exempt from APA, do not establish legal rights.

14. § 4: Judicial Deference to Agency Decisions • The Holding of the Chevron Case. • Issue was whether courts should defer to an agency’s interpretation of the enabling legislation which gives it authority to act. • In Chevron, the EPA interpreted not only the facts, but the law. 

15. Judicial Deference to Agency Decisions • Chevron (cont’d). • The U.S. Supreme Court held that a federal agency could interpret law with a two prong test: (1) did Congress directly address the issue in a statute? And (2) if the statute is silent, was the agency’s interpretation of the law “reasonable”? 

16. Judicial Deference to Agency Decisions • When Courts Will Give Chevron Deference to Agency Interpretation. • When the meaning of a statute’s language is unclear, courts must follow agency interpretation if reasonable. 

17. Judicial Deference to Agency Decisions • When Courts Will Give Chevron Deference to Agency Interpretation. • CASE 6.2 Citizens Committee to Save our Canyons v. Krueger (2008). Why did the court uphold the agency’s decision?

18. § 5: Agency Enforcement and Adjudication • Investigationincludes the powers to: • Conduct Inspections. • Issue Subpoenas. • Conduct Site Inspections (including warrantless inspections in certain limited situations such as firearms or liquor).

19. Agency Enforcement and Adjudication • Adjudication (like a trial before a judge). • Negotiated Settlements. • Formal Complaints. • Role of the Administrative Law Judge. • Hearing Procedures. • Agency Orders.

20. § 6: 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. 

21. Public Accountability • Freedom of Information Act. • Requires federal government to disclose records on request, but denial can be challenged in court. • CASE 6.3 United Technologies Corp. v. U.S. Department of Defense (2010). Court ordered a rational connection between facts and choice to deny.

22. Public Accountability • Government in the Sunshine Act. 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.

23. Public Accountability • Regulatory Flexibility Act. Requires an analysis of the cost a regulation will impose on small business and must consider less burdensome alternatives.

24. Public Accountability • Small Business Regulatory Enforcement Fairness Act. Allows Congress to review new federal regulations for at least sixty-days before they can take effect.