Business Law 2 Chapter 44

Hybrid Rule Making

A type of rule making that combines features of formal and informal rule making; consists of publication in the Federal Register, a written-comment period, and an informal public hearing with restricted cross-examination. Hybrid rule making contains some of the features of both formal and informal rulemaking (separate)

The Freedom of Information Act (FOIA)

Federal law passed in 1966 that mandates and facilitates public access to government information and records, including records about oneself. Sensitive information is excluded.

Policy Statements

General statements about directions in which an agency intends to proceed with respect to its rulemaking or enforcement activities These have no binding impact on anyone; they do not directly affect anyone's legal rights or responsibilities

Government in Sunshine Act

Requires that agency business meetings be open to the public when a quorum is present and if the agency is headed by a collegiate body (which means it consists of two or more persons, the majority of whom are appointed by the president with the advice and consent of the Senate.

Privacy Act

Under the Privacy Act of 1974, a federal agency may not disclose information about an individual to other agencies or organizations without that individuals written consent. Guarantees Three Primary Rights: 1.) The right to see records about oneself, subject to Privacy Act's exemptions 2.) The right to amend a nonexempt record if it is inaccurate, irrelevant, untimely, or incomplete 3.)The right to sue the government for violations of the statute, such as permitting unauthorized individuals to read your records Agency power is limited by the Freedom of Information Act, the Government in Sunshine Act, and the Privacy Act of 1974

Administrative Procedures Act (APA)

A major limitation on how agencies operate. Before its passage, agencies could decide on their own how to make rules, conduct investigations, and hold hearings and trials. Under APA, very specific guidelines govern rule making by agencies

Enabling Legislation

A statute that specifies the name, functions, and specific powers of the new agency. Administrative agencies are created by Congress through the passage of enabling legislation Enabling statures grant agencies broad powers for the purpose of serving the "public interest, convenience, and necessity." These include the powers of rule making, investigation, and adjudication

reg-neg

A type of rule making in which representatives of concerned interest groups and of the involved government agency participate in mediated bargaining sessions to reach an agreement, which is forwarded to the agency.

Formal Rule Making

A type of rule making that is used when legislation requires a formal hearing process with a complete transcript; consists of publication of the proposed rule in the Federal Register, a public hearing, publication of formal findings, and publication of the final rule if adopted. The APA requires formal rulemaking when an enabling statute or some other legislation requires that all regulations or rules be enacted by an agency as part of a formal hearing process that includes a complete transcript (seperate)

Exempted Rule Making

An APA exemption from rule making that allows an agency to decide whether public participation will be allowed. Exemptions include rule-making proceedings with regard to military or foreign affairs, agency management or personnel, and public property, loans, grants, benefits or contracts of an agency.

Subpoena duces tecum

An order to appear and bring specified documents

Subpoena

An order to appear at a particular time and place and provide testimony

Executive Agencies

Are generally located within the executive branch, under one of the cabinet-level departments. Hence, they are referred to as cabinet-level agencies Ex, Federal Aviation Agency (FAA), located within the Department of Transportation, and the Food and Drug Administration (FDA), located within the Department of Health and Human Services. The administrative head of an executive agency is appointed by the president with advice and consent of the US Senate and may be discharged by the president at any time for any reason. When elected a new president will typically place his or her own appointees in charge of executive agencies Executive agencies can make rules covering a broad spectrum of industries and activities and tend to focus on social regulation

Statutory Limitations

Congress may create or eliminate agencies and amend enabling legislation; Congress reviews and may override agency rules

Administrative Law

Consists of the substantive and procedural rules created by these bodies. It governs applications, licenses, permits, available information, hearings, appeals, and decision making

Interpretive Rules

Do not create any new rights or duties but are merely detailed statements of the agency's interpretation of an existing law these do not change the law; they define or apply the laws to new situations Generally very detailed, step-by-step statements of what actions a party must take to be considered in compliance with an existing law

Hybrid Agencies

Do not fall into one classification or the other. Created as one type of agency, that may have characteristics of the other. The EPA, for example, was created as an independent agency, not located within any department of the executive branch. Yet it is headed by a single administrator who serves at the whim of the president.

Administrative Law Judge (ALJ)

Enabling statutes delegate judicial power to agencies to settle or adjudicate individual disputes that an agency may have with businesses or individuals. After investigation, the agency will hold an administrative hearing before an administrative law judge The ALJ will try to convince the parties to reach a settlement via a consent order but also has the authority to render an order, which is a binding decision, after a hearing Administrative law matters are heard only by the ALJ, as there is no right to a jury trial in administrative agencies

Independent Agencies

Governed by a board of commissioners, one of whom is the chair. The president appoints the commissioners of independent agencies with the advice and consent of the Senate, but they serve fixed terms and cannot be removed except for cause. Serving fixed terms is said to make the commissioners less accountable to the will of the executive, thus the term independent agency No more than a simple majority of an independent agency can be members of any single political party (if a board consists of seven members, no more than four may be from four be from the same party) Independent agencies are generally not located within any department. Examples include the Federal Trade Commission (FTC), the Securities and Exchange Commission (SEC), and the Federal Communications Commission (FCC) Independent agencies often called commissions, tend to have narrower authority over many facets of a particular industry focusing on such economic regulation activities as rate making and licensing

Judicial Limitations

Interested parties may challenge administrative rules in the courts, which may review the agency's finding of facts, its interpretation of the rule, and the scope of the agency's power in making the rule

Informational Limitations

The Freedom of Information Act, Government in Sunshine Act, and Privacy Act of 1974 specify agencies responsibilities regarding public access to information

Political Limitations

The Senate must approve nominees for agency heads, and Congress has power over agencies budgets

Interstate Commerce Commission (ICC)

The first federal administrative agency; created to regulate the anti-competitive conduct of railroads (no longer exists)

Informal Rule Making

The primary type of rule making used by administrative agencies is informal rule making or notice-and-comment rule making. An agency initiates informal rule making by publishing the proposed rule in the Federal Register, along with an explanation of legal authority for issuing the rule and a description of how the public can participate in the rule making process. The Federal Register is the official daily publication for rules, proposed rules, and notices of federal agencies and organizations, as well as executive orders and other presidential documents Informal rule making applies in all situations in which the agency's enabling legislation or other congressional directives do not require another form (seperate)

Substantial Evidence

The type of evidence required by a court to support an agency's fact finding. Any entity (individual or business) that believes itself harmed by an administrative rule may challenge that rule in federal court once all administrative procedures have been exhausted. This is probably the biggest constraint on agency power.

Limitations on Agency Powers

There are four basic limits on agency power: Political, Statutory, Judicial, and Informational

How and why are Agencies Created?

When Congress sees a problem it believes needs regulation, it may create an administrative agency to deal with it. The agency can be staffed with people who have special expertise in the area and know what regulations are necessary to protect citizens. Agencies typically act more swiftly than Congress in creating and enacting new laws. Today, administrative agencies actually create more rules than Congress and the courts combined

Consent Order

a statement in which a company agrees to stop disputed behavior but does not admit that it broke the law

Administrative Agencies

bodies of the city, county, state, or federal government that carry out specific regulatory duties Agencies may make rules for an entire industry, adjudicate individual cases, and investigate corporate misconduct