BUSLAW Ch 43 Administrative Agencies

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Types of Agencies

-2 Basic Types: executive & independent regulatory agencies

Agencies Provide a Comprehensive Regulatory Scheme

-Admin agencies at various levels of gov work together & share responsibilities of creating & enforcing particular regulations

Agency Powers & the Constitution

-Admin agencies can make legislative rules that are legally binding -They also issue interpretive rules, which declare policy & do not affect legal rights or obligations

The Practical Significance of Administrative Law

-Admin law is created by admin agencies -Admin agencies exist at all levels of government -There are admin agencies at the state and local levels as well (state agency is created as a parallel to fed agency -Federal Agency regulations take precedence over conflicting state regulations

Enforcement & Adjudication: Investigtion & Adjudication

-After an investigation reveals a suspected violation, an agency may begin to take admin action against an individual or organization -Most admin actions are resolved through negotiated settlements, w/o formal adjudication

The Administrative Procedure Act (APA)

-All federal agencies must follow specific procedural requirements when fulfilling 3 basic functions of rule making ,enforcement, & adjudication

The Delegation Doctrine

-Article I of Constitution grants Congress authority to delegate some of its power by establishing admin agencies to create rules for implementing those laws -Admin agencies are sometimes referred to as the fourth branch of government

Process of Formal Administrative Adjudication

-Complaint -Answer -Hearing before Administraitve Law Judge -Order of Administrative Law Judge -Appeal to Governing Board of Agency -Final Agency Order -Appropriate Court for Review of Agency Decision -Court Order

Agency Creation & Powers

-Congress creates federal administrative agencies -To create admin agency, congress passes enabling legislation (which specifies the name, purpose, function, power of the agency) -An agency's enabling statute defines its legal authority (an agency cannot regular beyond the powers it is granted by statute)

Legislative Controls

-Congress exercises authority over agency powers through legislation -Congress gives power to agency through enabling legislation & can take power away through subsequent legislation -In addition to power of creating & funding agencies, Congress has the authority to investigate the implementation of its laws and the agencies that is has created -Congress also has power to "freeze" the enforcement of most federal regulations before regulations take effect

Executive Controls

-Exec branch of gov exercises control over agencies both through president's power and through president's veto power

Agency Orders

-Following a hearing, the administrative law judge gives an initial decision on the case -Either party can appeal the Admin Law Judge's decision -If no party appeals then the decision becomes final order of the agency -ALJ's decision also becomes final if a party appeals & commission & court decline to review case

The Arbitrary & Capricious Test

-Goal of Congress in enacting APA was the provide more judicial control over admin agencies -Parties can challenge regulations as contrary to law that they are arbitrary & capricious -No precise definition of what makes a rule arbitrary & capricious, but standard includes whether agency has done any of the following: -no rational explanation for decision -changed its prior policy w/o justification -considered legally inappropriate factors -did not consider a relevant factor -rendered a decision plainly contrary to evidence

Formal Complaints

-If settlement cannot be reached, agency must issue a formal complaint against suspected violator -Agency adjudication may involve a trial-like arbitration procedure before an administrative law judge -APA requires that before a hearing, the agency must issue a notice that includes facts & law on which complaint is based, legal authority for hearing, and its time and place

Informal Agency Actions

-Increasingly agencies have used informal methods of policymaking (interpretive rules & guidance documents) -Informal actions are exempt from APA's requirements because they do not establish legal rights

Judicial Controls

-Judicial branch exercises control over agency powers through courts' review of agency actions

Role of the Administrative Law Judge

-Presides over the hearing & has power to administer oaths, take testimony, rule on questions of evidence, & make determinations of cat -required to be unbiased

Holding of Chevron Case

-Supreme court held that courts should use agency's interpretation of law and facts! -Courts decision in this case created new standard for courts to use when reviewing agency interpretations of law. MUST ASK 2 Questions: -Did congress directly address the issue in dispute? If so then statutory law prevails -If statute is silent or ambiguous, is the agency's interpretation "reasonable"? If it is, a court should uphold the agency's interpretation even if the court would have interpreted the law differently

When Courts Will Give Chevron Deference to Agency Interpretation

-The notion that courts also trust agencies on matter of law was controversial. -Under the holding of the Chevron case, when the meaning of a partiular statute's language is unclear and an agency interprets it, the court must follow the agency's interpretation as long as it is reasonable

Judicial Deference to Agency Decisions

-When asked to review agency decision, courts more often grant deference to agency's judgement because they are experts in that subject

Hearing Procedures

-hearing itself must comply with procedural requirements of APA, must meet constitutional standards of due process -During the hearing, parties may give testimony, present other evidence, and cross examine adverse witness -Big Difference btwn trial & administrative agency hearing is that much more info, including hearsay, can be introduced as evidence during an administrative hearing

Federal Executive Agencies

-include the cabinet departments of the executive branch, which assist the president in carrying out executive functions -usually have a single administrator, director, or secretary who is appointed by president to oversee agency

Rulemaking under the APA

-major function of admin agency is rulemaking -APA defines a rule as "an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law & policy"

Independent Regulatory Agencies

-outside the federal executive departments -usually run by a commission or board made up of several members (Ex: SEC and FTC)

Adjudication

-process of resolving a dispute by presenting evidence & arguments before a neutral decision maker

Negotiated Settlements

-purpose is to specify the problem to the agency's satisfaction & eliminate the need for additional proceedings

Notice-and-Comment Rulemaking (3 steps)

1. notice of proposed rule making: when creating new rule, agency publishes notice of proposed rule in Fed Register 2. comment period: following publication, agency must allow ample time for persons to comment in writing on proposed rule 3. final rule: after reviewing comments, it drafts final rule & publishes to Fed Register. If substantial changes are made after reviewing comments then a new proposal must be made


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