Administrative Agencies - CH6
Law requires that an ALJ be an unbiased adjudicator (judge), even though the ALJ works for the agency prosecuting the case. Since the ALJ assumes the role of a judge and jury in a trial, what are some safeguards to prevent bias of the ALJ and promote fairness in the proceedings?
-APA requires that the ALJ be separate from an agency's investigative and prosecutorial staff -APA prohibits ex parte (private) communications between the ALJ and any party to an agency proceeding, such as the EPA or the manufacturer -provisions of the APA protect the ALJ from agency disciplinary actions unless the agency can show good cause for such an action
What are negotiated settlements and their purpose?
-Depending on the agency, may involve just a simple conversation or a series of informal conferences. -Purpose is to RECTIFY THE PROBLEM TO THE AGENCY'S SATISFACTION and ELIMINATE THE NEED FOR ADDITIONAL PROCEEDINGS
Afte rules are issued, agencies can conduct investigations to monitor compliance. Describe some examples of agency investigation procedures.
-agencies can gather information through on-site inspections of an office, factory, or some other business facility -examples include safety inspections of underground coal mines, safety tests of commercial equipment and automobiles, and environmental monitoring of factory emissions -may ask a firm to submit certain documents or records to the agency for examination (ex: FTC often asks to inspect corporate records for compliance) -firms typically comply because it is in the firm's interest to maintain a good relationship with regulatory bodies *site search example: ex: the Environmental Protection Agency (EPA) may inspect a site to determine if hazardous wastes are being stored properly or to sample a facility's wastewater to ensure that it complies with the clean water act.
Is an agency action automatically subject to judicial review?
-agency actions not automatically subject to judicial review, and the party seeking court review must first exhaust all administrative remedies under what is called the EXHAUSTION DOCTRINE -the complaining party normally must have gone through the administrative process (from complaint to hearing to final agency order) before seeking court review
What is the Small Business Regulatory Enforcement Fairness Act?
-allows congress to review new federal regulations for at least 60 days before they take effect -period gives opponents of the rules time to present their arguments to congress -SBREFA authorizes the courts to enforce the regulatory flexibility act
What is the Government in the Sunshine Act?
-requires that "every portion of every meeting of an agency" be open to "public observation" -requires that the public is provided with adequate notice of scheduled meetings and agendas -exceptions: closed meetings are permitted when (1) the subject of the meeting concerns accusing any person of a crime, (2) an open meeting would frustrate the implementation of agency actions, or (3) the subject of the meeting involves matters relating to future litigation or rulemaking
What is the freedom of information act?
-requires the federal government to disclose certain records to any person or entity on written request, even if no reason is given for the request -all federal govt. Agencies must make their records available electronically on the internet and in other electronic formats -exempts certain types of records, such as those pertaining to national security, and those containing info that is confidential or personal -an agency's failure to comply with a FOIA request can be challenged in a federal district court
How does the legislative branch (congress) control agencies?
-through legislation -GIVES POWER through enabling legislation -CAN TAKE POWER AWAY/abolish an agency through subsequent legislation -legislative authority is REQUIRED TO FUND AN AGENCY, and enabling legislation usually sets certain time and monetary limits on the funding of particular programs (congress can revise these limits) -has the POWER TO FREEZE the ENFORCEMENT of most federal regulations before they are put into place -ADMISNTRATIVE PROCEDURE ACT
Describe the traits and nature of hearing procedures for a formal complaint.
-vary widely from agency to agency -agencies typically exercise substantial discretion over the type of procedure that will be used (frequently, disputes are resolved through informal adjudication proceedings) -a formal adjudicatory hearing resembles a trial in many respects -prior to hearing, parties are permitted to undertake discovery - involving depositions, interrogatories, and requests for documents or other information -discovery process not quite as extensive as it would be in a court proceeding -hearing must comply with the procedural requirements of the APA and must also meet the constitutional standards of due process -parties may give testimony, present other evidence, and cross-examine adverse witnesses -***the burden of proof is an enforcement proceeding is placed on the agency
When are search warrants not required?
-warrants are NOT required to conduct searches in certain highly regulated industries (such as liquor or firearm stores) -not required sometimes if state permits searches of certain types of hazardous operations, such as coal mines or liquid propane retailers -in emergency situations, it is sometimes not needed
What is judicial deference to agency decisions?
-when asked to review agency decisions, courts historically granted deference (significant weight) to the agency's judgement, often citing the agency's great expertise in the subject area of regulation. This deference seems especially appropriate when applied to an agency's analysis of factual questions, but should it also extend to an agency's interpretation of its own legal authority? -in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., the United States Supreme Court held that it should, thereby creating a standard of broadened deference to agencies on questions of legal interpretation. -The standard involves the following two questions: Did congress directly address the issue in dispute in the statute? If so, the statutory language prevails. If the 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. (this was controversial - under the holding of the chevron case, WHEN THE MEANING OF A PARTICULAR STATUTE'S LANGUAGE IS UNCLEAR AND AN AGENCY INTERPRETS IT, THE COURT MUST FOLLOW THE AGENCIES INTERPRETATION AS LONG AS IT IS REASONABLE *for agencies to be assured of such judicial chevron deference, they must meet the formal legal standards for notice and comment rulemaking*
What is the Regulatory Flexibility Act?
-whenever a new regulation will have a "significant impact upon a substantial number of small entities", the agency must conduct a regulatory flexibility analysis that must measure the cost that the rule would impose on small businesses and consider less burdensome alternatives -contains provisions to alert small businesses - through advertising in trade journals, for example - about forthcoming regulations
List out the process of formal administrative adjudication.
1. Complaint 2. Answer 3. Hearing before ALJ 4. Initial Order of ALJ (for example, a cease-and-desist order) 5. Appeal to governing board of agency 6. Final agency order 7. Appropriate court for review of agency decision (usually an appellate court, but it depends on the specific agency) 8. Court order
What are the two basic types of administrative agencies?
1. Federal executive agencies include the cabinet departments of the executive branch,which assist the president in carrying out executive functions 2. Sub-agencies within cabinet departments (ex: Occupational Safety and Health Administration is a sub-agency within the U.S. Dept. of Labor) *Executive agencies usually have a single administrator, director, or secretary who is appointed by the president to oversee the agency and can be removed by the president at any time.
What two types of actions can an agency take if an investigation reveals a suspected violation by a company?
1. negotiated settlement 2. formal complaint
What are the 3 basics steps of the notice-and-comment rule making procedure used by administrative agencies?
1. notice of the proposed rule making. When a federal agency decides to create a new rule, the agency publishes a notice of the proposed rulemaking proceedings in the Federal Register (a daily publication of the executive branch that prints govt. Orders, rules, and regulations) Notice states where and when the proceedings will be held, the agency's legal authority for making the rule (usually its enabling legislation), and the terms/subject matter of the proposed rule) Proposed rule is often reported by the news media and published in the trade journals of the industries that will be affected 2 Comment period Agency must allow ample time for persons to comment in writing on the proposed rule Gives interested parties the opportunity to express their views on the proposed rule in an effort to influence agency policy Anyone can submit comments in writing or if a hearing is held, orally - all comments are logged in and become a public record others can examine (agency does NOT have to respond to all comments, but must respond to any significant ones that bear directly on the proposed rule Agency responds to comments by either modifying its final rule or explaining in a statement why it did not make any changes 3. Final rule After agency reviews comments, it drafts the final rule and publishes it in the Federal Register. Must contain a "concise general statement of...basis and purpose" that describes the reasoning behind the rule May modify the terms of the proposed rule in light of the public comments, but if substantial changes are made, a new proposal and new opportunity for comment are req'd.
What are the 3 functions of a federal agency?
1. rulemaking 2. enforcement 3. adjudication
What two things can an agency do when a firm refuses to comply with an investigation or request?
1. subpoena 2. issue a search warrant
What are the two types of subpoenas?
1. subpoena ad testificandum ("to testify") - ordinary subpoena - a writ, or order, compelling a witness to appear at an agency hearing 2. subpoena duces tecum ("bring it with you") - compels and individual or organization to hand over books, papers, records, or documents to the agency *an agency can use either type to obtain testimony or documents
Why are search warrants needed?
4th amendment protects against unreasonable searches and generally requires that a search warrant be obtained before a physical search for evidence is conducted; agencies must get a warrant before conducting a search (getting law enforcement officials to search for a specific item and present it to the agency)
Why can't an agency create any regulation it wants?
A federal agency must follow *SPECIFIC PROCEDURAL REQUIREMENTS* when fulfilling their 3 basic functions of rule making, enforcement, and adjudication.
What is the role of the administrative law judge in a hearing for a formal complaint?
ALJ presides over the hearing and has the power to: 1. administer oaths 2. take testimony 3. make determinations of fact
Administrative agencies can issue both legislative and interpretive rules. What is the difference?
Administrative agencies can make legislative rules, or substantive rules, that are as legally binding as laws that Congress passes -agencies can issue interpretive rules, which simply declare policy and do not affect legal rights or obligations
Why are negotiated settlements an appealing option to firms?
Appealing option to firms for two reasons: 1) to avoid appearing uncooperative and 2) to avoid the expense involved in formal adjudication proceedings and in possible later appeals To conserve resources and avoid formal actions, agencies devote a great deal of effort to giving advice and negotiating solutions to problems
Who creates federal agencies? Why?
Congress; By delegating some of its authority to make and implement laws, congress can INDIRECTLY MONITOR a particular area in which it has passed legislation
Can either party appeal the ALJ's initial order? If so, to whom does the party appeal to?
Either party can appeal the ALJ's decision to the board or commission that governs the agency.
True or False: An agency can exercise powers other than what congress has delegated to them in enabling legislation.
False
Are final rules issued by agencies legally binding or only advisory?
Final rules have binding legal authority unless the courts later overturn them and for this reason are considered legislative rules.
When does a formal complaint take place?
If a settlement cannot be reached, the agency may issue a formal complaint against the suspected violator Agency adjudication may involve a trial-like arbitration procedure before an administrative law judge (ALJ). The Administrative Procedure Act (APA) requires that before the hearing take place, the agency must issue a notice that includes the facts and law on which the complaint is based, the legal authority for the hearing, and its time and place.
What happens if no party appeals the case of a formal complaint?
If no party appeals the case, the ALJ's decision becomes the FINAL ORDER of the agency. The ALJ's decision also becomes final if a party appeals and the commission and the court decline to review the case. If a party appeals and the case is reviewed, the final order comes from the commission's decision or (if that decision is appealed to a federal appellate court) that of the reviewing court.
Following a hearing, the ALJ renders an _____ ______ on the case.
Initial Order
True or False: Administrative agencies at various levels of govt. often work together and share the responsibility of creating and enforcing particular regulations.
TRUE
What test is used to see if an agency rule is ridiculous or unnecessary?
The *Arbitrary and Capricious Act* (part of the APA)
Are there limits on the information an agency can demand from a firm? If so, what factors are considered?
There are limits on the information that an agency can demand. To determine whether an agency is abusing its discretion in its pursuit of information as part of an investigation, a court may consider such factors as the following: The PURPOSE of the investigation. An investigation must have a legitimate purpose. Harassment is an example of an improper purpose. An agency may not issue an administrative subpoena if the agency's motive is to harass or pressure the business into settling an unrelated matter. The RELEVANCE of the information being sought. Information is relevant if it reveals that the law is being violated or if it assures the agency that the law is not being violated. The SPECIFICITY OF DEMAND FOR TESTIMONY OR DOCUMENTS. A subpoena must, for example, adequately describe the material being sought. THE BURDEN OF DEMAND on the party from whom the information is sought. In responding to a request for information, a party must bear the costs of, for example, copying the documents that must be handed over. A business generally is not required to reveal its trade secrets, however.
What factors does the Arbitrary and Capricious Act use to determine if a rule is arbitrary or capricious?
checks to see if the agency has done any of the following: 1. failed to provide a rational explanation for its decision 2. changed its prior policy without justification 3. considered legally inappropriate factors 4. entirely failed to consider a relevant factor 5. rendered a deacon plainly contrary to the evidence
Why does congress like to delegate its authority through the creation of administrative agencies?
delegation enables congress to avoid becoming bogged down in the details relating to enforcement - which are often best left to specialists
To create an administrative agency, congress must pass _____ ________.
enabling legislation
What are the two ways the executive branch of govt. (the us president) exercises control over administrative agencies?
executive branch controls agencies through the president's power to: 1. appoint federal officers 2. through the president's veto power
What defines an agency's legal authority?
its enabling statute
What is enabling legislation?
legislation passed by congress that specifies the name, purposes, functions, and powers of the agency being created
Why are agency regulations sometimes said to be legislative?
like statutes, they have a BINDING EFFECT - violators of agency rules may be punished
Who creates state administrative agencies?
state legislature
What is the purpose of the Administrative Procedures Act?
the APA provides the *judicial review of most decisions of administrative agencies* -exercises control over agency powers through the court's review of agency actions -The APA provides that courts should "hold unlawful and set aside" agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law".
Before a hearing take place due to an agency's formal complaint against a firm, what must happen first?
the APA requires that the agency must 1) issue a notice that includes the facts and law on which the complaint is based, 2) the legal authority for the hearing, and 3) its time and place.
Where are notices of proposed rules of an administrative agency published?
the federal register
What happens if an agency fails to follow the proper notice-and-comment rule making procedures?
the final rule may not be binding (not enforceable)
If a firm refuses to comply with a request for investigation, what can an agency do?
use a subpoena or issue a search warrant
Can the president veto enabling legislation passed by congress or attempts to modify an existing agency's authority?
yes