BLaw Ch. 5 - Administrative Law

Adjudication

After concluding an investigation, the agency may use formal or informal methods to resolve the matter. Most matters are informally adjudicated by procedures including advising, negotiating, and settling. While not required to be used, the Administrative Dispute Resolution Act authorizes and encourages federal agencies to use alternative dispute resolution. The for¬mal procedure by which an agency resolves a matter (called adjudication) involves finding facts, applying legal rules to the facts, and formulating orders. An order is the final disposition made by an agency. Adjudication is in essence an administrative trial governed by certain standards set forth in the APA. The APA requires that notice be given of the hearing; that the agency give all interested parties the opportunity to submit "facts, arguments, offers of settlement, or propos-als of adjustment"; and that a hearing be held if no settlement is reached. The hearing is presided over by an administrative law judge (ALJ) and is prosecuted by the agency. Juries are never used. Either party may introduce oral and documentary evidence. All decisions must include a statement of findings of fact and conclusions of law and the reasons or basis for them as well as a statement of the appropriate rule, order, sanction, or relief. In most instances orders are final unless appealed, and failure to comply with an order is subject to statutory penalty.

Enforcement

Agencies also investigate conduct to determine whether the statute creating the agency or the agency's legislative rules have been violated. Agencies have traditionally been given great discretion to compel disclosure of information, subject to constitutional limitations.

Limits on administrative agencies

An important and fundamental part of administrative law is the limits imposed by judicial review upon the activities of administrative agencies. Courts are not sup¬posed to substitute their judgment on matters of policy for the agency's judgment, but the legislature and the executive branch may address the wisdom and correctness of an agency's action. Legally required public disclosure of agency actions provides further protection for the public 1. Judicial review 2. Legislative control 3. Control by executive branch 4. Disclosure of information

Disclosure of information

Congress has enacted disclosure statutes to enhance public and political oversight of agency activities. These statutes include: a. Freedom of Information Act-The FOIA gives the public access to most records in the files of federal administrative agencies. b. Privacy Act-Among other things, this Act generally forbids the unauthorized disclosure of individuals' personal records that are kept by a federal agency and allows an individual the right to review and copy these records and to find out if they have been disclosed to others. c. Government in the Sunshine Act-The Government in the Sunshine Act applies to multi-member bodies whose members are appointed by the president with the advice and consent of the Senate. This act requires such bodies to hold their meetings open to the public.

Legislative control

Congress may exercise control through its budgetary power; by amending the agency's enabling statute; by establishing general guidelines such as the APA; by reversing or changing an agency rule through legislation; through review of agencies by Congressional oversight committees; and through Congressional power to confirm high-level administrative appointments. Congress must approve new, major rules before they take effect.

Judicial review

In exercising judicial review, the court may either compel agency action unlaw¬fully withheld or set aside impermissible agency action if the error is prejudicial. This process acts as a check on the conduct of an agency. a. General Requirements-It is necessary for parties seeking to challenge agency action to (a) have standing and (b) have exhausted their administrative remedies. Judicial review is ordinarily available only for final agency action. In conducting a review, the court decides all relevant questions of law, interprets constitutional and statutory provisions, and determines the meaning or applicability of the terms of agency action. b. Questions of Law-A review of questions of law includes determining whether the agency has: (1) exceeded its authority, (2) properly interpreted the applicable law, (3) violated any constitutional provision, or (4) acted contrary to the procedural requirements of the law. c. Questions of Fact-One of three different standards will be used when reviewing factual determinations. The tests applied are: (a) the arbitrary and capricious test, (b) the substantial evidence test, or (c) the unwarranted by the facts standard.

Interpretive rules

Interpretative rules are statements issued by an administrative agency indicating its construction of its governing statute. Interpretative rules are exempt from the notice and comment requirement of the APA. They are not binding, although they are persuasive and are given substantial weight by the courts.

Legislative rules

Legislative rules, often called regulations, are substantive rules issued by an administrative agency under the authority delegated to it by the legislature. Legislative rules must be promulgated in accordance with the procedural requirements of the APA. In 1990, Congress enacted the Negotiated Rulemaking Act which authorizes agencies to use negotiated rulemaking but does not require it. Legislative rules, in contrast to interpretative and procedural rules, have the binding force and effect of law.

Operation of administrative agencies

Most administrative agencies perform three basic functions: (1) to make rules, (2) to enforce the law, and (3) to adjudicate controversies. The term administrative process refers to the entire set of activities in which administrative agencies engage while carrying out their rulemaking, enforcement, and adjudicative functions. To address the issues raised by the concentration of these three functions in the same agency and to address questions raised regarding the propriety of having the same bodies which establish the rules also act as prose¬cutor and judge in determining whether the rules have been violated, Congress passed the Administrative Procedure Act (APA) in 1946. The APA also established procedural reforms.

Procedural rules

Procedural rules are non-binding rules issued by an administrative agency establishing its organization, method of operation, and rules of conduct for practicing before it. Proce¬dural rules are also exempt from the notice and comment requirements of the APA.

Rulemaking

Rulemaking is the process by which an administrative agency enacts or promul¬gates rules of law. Under the APA, a rule is "the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or process law or policy." Three types of rules are promulgated by administrative agencies: legislative rules, interpretative rules, and procedural rules. 1. Legislative rules 2. Interpretive rules 3. Procedural rules

Control by executive branch

The president has the power to appoint and remove the chief ad¬ministrators of executive agencies. He has less control of independent agencies, because commissioners serve for a fixed term that is staggered with the president's term of office. The president also controls agencies through the budgeting process. In extreme cases, the president can impound moneys or restructure agencies unless disapproved by Congress.