Chapter 4: Administrative Law

Constitutional Limits

-1st Amendment: Speech Agencies can regulate "indecent" speech. FCC v. Fox Television, 132 S.Ct. 2307 (2012) -4th Amendment: Search E.g., search of business premises, inspection -5th Amendment: Self-incrimination Corporations cannot prevent disclosure of documents -6th and 7th Amendments: Jury trial Ensures availability of judicial review

Legislative Powers

-Agency Regulations: also called rules are similar to statutes except that they are enacted by administrative agencies rather than Congress. -These regulations must be consistent with all relevant statutes and cannot overrule or contravene Congressional enactments or the Constitution. -Promulgate=enact -Power to enact regulations and have force and effect of the law

Legislative Limits: Enabling Acts

-Congress initially defines the scope and powers of an agency when it drafts an enabling act. -Congress can indirectly expand or contract the scope of an agency's operations to a great extent through the annual appropriations bills, both by setting an agency's overall budget or by special provision. -Congress may also eliminate agencies completely in light of changed societal circumstances.

Executive Power: Negotiated enforcement

-Consent Decrees: Consent decrees are treated as contracts between the agency and the regulated business and can be enforced in court without regard to the underlying agency regulations at issue. -Warning Letters

Judicial Limits: Judicial Deference to Agency Action

-Discretionary Actions or Determinations; Very High Deference; Courts will uphold the agency action unless it is "arbitrary or capricious" -Findings of Fact; Very High Deference; Courts will defer to agency findings of act so long as they are supported by "substantial evidence," even if the court would have decided differently. -Issues of Law (legislative rulemaking and adjudication); Moderately High; Court will defer to agency interpretation of law if 1. statute is ambiguous and 2. agency interpretation is reasonable ("Chevron deference"). -Constitutional Issues; Very Low; Courts will engage in de novo review (i.e., courts will not defer to agency determinations).

Administrative agency

-Governmental body often composed of many specialists that oversee a particular field or area of commerce and administers the laws passed by congress that governs that field or area. Names might include: Commission Office Service Bureau Authority

Legislative Limits: The Freedom of Information Act (FOIA)

-It provides that any person has a right to obtain access to the vast amount of valuable information collected, produced, and maintained by administrative agencies in the form of written documents. Only applies to federal agencies. -Exempt from public disclosure: 1. Trade Secrets 2. Confidential commercial or financial information 3. Personnel files and medical files 4. Documents that could compromise national security. These are exempt to promote fair competition, respect personal privacy, and maintain national security. -Allows agencies to charge the public reasonable search and copying fees.

Executive Power: Information Gathering

-Periodic reporting: Administrative agencies may require businesses to periodically submit information to the agency in an information submissions process known periodic reporting. Ex. SEC requires quarterly filings of financial statements by covered entities. -Members of the public may voluntarily provide information to agencies, for example a consumer files a complaint with the FTC that a company has engaged in fraudulent or abusive business practices. -Agencies may inspect premises to verify safety, environmental or other standards. -Administrative subpoena: A document requiring an individual to appear and provide information. A subpoena duces tecum requires an individual to appear and bring documents and other records.

Executive Limits

-President has the constitutional powers to veto agency-related legislation passed by Congress as well as appoint agency heads with the advice and consent of the Senate. -President may also remove agency heads, though for independent agencies he may only do so "for cause" (inefficiency, neglect of duty, or malfeasance in office). -President may issue executive order, which may mandate particular action or prescribe general policies that agencies should follow. Executive Order 13,563: agencies must accept comments via the Internet -Control over Department of Justice (DOJ) enforcement litigation

Executive Powers: Administrative Fines

Agencies have increasingly been given the power to impose fines and other penalties on the businesses they regulate. For example, the SEC has the authority to bring suit in federal district court in order to seek civil fines for insider trading, which can be as much as three times the profit gained (or loss avoided) by the use of insider information. In other cases, however, the agency itself may be able to impose fines.

Legislative Limits: Notice-and-comment Rulemaking

Agencies must first provide notice to the general public by publication of the date, time, place, and subject matter of the proposed rulemaking proceedings in the Federal Register, a daily publication of the federal government. usually the actual text of the proposed rule will be reproduced in full in the Federal Register. This notification enables interested parties to critically examine the rule and offer feedback to the agency, usually in the form of written comments. Businesses, law firms, nonprofit organizations, individuals, and other may offer feedback regarding the likely impact of the proposed regulations, contributing to the public accountability of agency operations. These comments may cause the agency to reformulate its proposed rule, in which case the agency must provide notice of the revised rule and offer additional comment period. If following the initial comment period, only minor changes or no changes are made, the agency may publish the final rule not less than 30 days before its effective date.

Executive Powers: Product Recalls

Certain agencies can exert influence on businesses by negotiating the recall of products that are or may be unsafe. Although recalls are frequently "voluntary," administrative agencies often play a significant role in negotiating the recall, with the negotiation sometimes taking place in the shadow of mandatory recall authority.

Legislative Limits: The Administrative Procedure Act of 1946 (APA)

Congress enacted it to impose procedural limits that are generally applicable across agencies. It creates a set of default procedural rules that agencies must follow in absence of specific requirements in enabling act.

Executive Power: ADR

Disputes can be settled via ADR. Under the 1990 Administrative Dispute Resolution Act, Congress explicitly authorized agency use of binding arbitration and other types of ADR, so long as the regulated party consents and certain other conditions are met.

Difference between an executive agency and an independent agency

Executive -This is when the President has greater control of the agency. These agencies are generally "housed" within one of he executive departments and are usually headed by a single officer who can be removed by the president with or without cause. Ex. OSHA, IRS, FDA Independent -These agencies have greater independence from executive controls. These agencies are usually headed by several individuals from both political parties who serve staggered terms and can only be removed by the president for poor performance or wrongdoings. Ex. SEC, FTC, SBA

Judicial Powers

If dispute can't be resolved informally, the agency may issue a formal complaint against the accused party known in admin law as the respondent. A complaint is the document that initiates the adjudicative process and informs the respondent of the charges being asserted. An administrative law judge (ALJ) presides over the hearing and has the power to administer oaths, issue subpoenas, take depositions, receive testimonial or documentary evidence, and hold conferences to facilitate settlement or resolution via ADR. In the absence of settle the ALJ concludes the proceedings by issuing an initial order (decision). The initial order becomes the final order if neither party appeals the decision.

Judicial Limits

Judicial review of agency action (or inaction) Right to go to court thinking agency is abusing power or being inactive E.g., Heckler v. Chaney, 470 U.S. 821, 838 (1985) (FDA declines to enforce FDCA to help inmates on death row). The agency action must be far enough along that it is ripe for review, but not too far to be moot. Plaintiffs have standing to sue if they have- 1. Suffered an "injury in fact" 2. That is caused by the action of the defendant 3. And that "will be redressed by a favorable decision" of the court. When courts engage in judicial review of agency actions, they will accord various levels of deference (weight and respect) to the determinations and decisions made by the agency.

Executive Power: Licensing

Local, state, and federal administrative agencies exert substantial influence over businesses through their ability to grant and revoke business licenses. -E.g., FCC licensing of radio frequencies -E.g., liquor licensing (local or state agencies)

Legislative Limits: Government in the Sunshine Act

Requires agencies headed by two or more individuals to open most meetings to public observation. The time, place, and subject matter of each meeting must be publicly announced at least one week in advance, generally by publication in the Federal Register.

Judicial Powers: Cease-and- Desist orders

Similar to injunctions in that they command a party to refrain from some action.

Purposes of Agencies

Specialization -An agency can hire specialists who are highly educated and experienced in a particular field. Agencies collect the expertise of many (in some cases > 1,000) specialists. Legislative Gap-Filling -Congress, traditionally, creates broad statutes; agencies fill in the details through regulations or rules.

Legislative Limits: Types of Rulemaking

Substantive -Informal (notice-and-comment): The APA requires that most agency regulations be promulgated only after the public is given notice of the proposed rules and an opportunity to comment on them. (Frequently used) -Hybrid Rulemaking: Notice-and- comment plus additional requirements specified in the enabling act. -Formal Rulemaking: Allows interested parties to present oral testimony in a trial-type environment. (Rarely used). Procedural -Procedural Rulemaking: Limited judicial review.

Types of Administrative Agency Rules

Substantive -Regulations most commonly refer to provisions that affect the substantive rights of businesses or others. -Legislative rules: Analogous to federal statutes. -Interpretive rules ("guidance"): General statements of policy, or clarifications of the meaning of a regulation. Do not create new rights or obligations, but clarify existing statutes or agency regulations. Procedural -Rules that relate to internal agency operations (e.g., employee promotion), or rules that relate to procedural technicalities (e.g., required filings muse use 12 point font). Rules found in the Code of Federal Regulations

Federal Registrar and its Purpose

The Federal Register Act enacted in 1935 created the Federal Register, a daily publication of the Government Printing Office in which executive orders and other government documents that have "general applicability and legal effect" must be published. Federal Register helps to ensure transparency

Enabling Act

The legislation enacted by Congress that actually creates the administrative agency. -Act first and then the Agency -Agency is created by the Act