BUSLAW Ch 43 Administrative Agencies
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