Chapter 5: Administrative Law and Procedure

Adjudication Early Stages

Alleged violators notified of objections, may be possible to engage in negotiated settlement (if defendant admits to guilt)

Reasons for the rise in administrative agencies

Congress creates administrative agencies. By delegating some of its authority to make and implement laws, Congress can indirectly monitor a particular area in which it has passed legislation without becoming bogged down in the details relating to enforcement— details that are often best left to specialists.

Enabling Legislation

Congress will pass enabling legislation to create an administrative agency. This specifies the name, purpose, power, and function of the agency. The process is identical at the state-level.

Adjudication: Negotiated Settlement

Depending on the agency, negotiations may take the form of a simple conversation or a series of informal conferences. Whatever form the negotiations take, their purpose is to rectify the problem to the agency's satisfaction and eliminate the need for additional proceedings. Settlement is an appealing option to firms for two reasons: + To avoid appearing uncooperative + To avoid the expense involved in formal adjudication proceedings and in possible later appeals Settlement is also an attractive option for agencies. To conserve their own resources and avoid formal actions, administrative agencies devote a great deal of effort to giving advice and negotiating solutions to problems.

Types of Administrative Agenies

Executive Agencies, Independent Regulatory Agencies, and State Administrative Agencies

Adjudication Formal Complaints

If a settlement cannot be reached, the agency may issue a formal complaint against the suspected violator. A hearing will be scheduled. The ALJ with preside over case.

John Paul Stevens

If the intent of Congress is clear, then that is that...however if it isn't the court doesn't simply make a ruling (as it usually does... the real question is whether the agency answer is reasonable

Administrative Agency's Enforcement

Often Agencies enforce the rules that they enact. They will conduct investigations to monitor compliance. Agencies enforce their rules through three techniques: + Inspections and Tests + Subpoenas + Search Warrants

Public Accountability: Regulatory Flexibility Act

Requires an agency "flexibility analysis" whenever a new regulation will have a significant impact upon a substantial number of small entities, meaning, essentially, businesses.

The Impact and Rules of Chevron

The United States Supreme Court has held that in order for agency interpretations to be assured Chevron deference, they must meet the formal legal standards for notice-and-comment rulemaking. Nevertheless, there are still gray areas, and many agency interpretations are challenged in court.

Independent Regulatory Agencies

The president has less power, as officers serve fixed terms and cannot be removed without just cause; FTC, SEC, FCC

Subpoenas

There are two basic types of subpoenas. The subpoena ad testificandum (to testify) is an ordinary subpoena. It is a writ, or order, compelling a witness to appear at an agency hearing. The subpoena duces tecum (bring it with you) compels an individual or organization to hand over books, papers, records, or documents to the agency.

The Delegation Doctrine

Under what is known as the delegation doctrine, the courts interpret these passages as granting Congress the power to establish administrative agencies and delegate to them the power to create rules for implementing those laws.

Executive Agencies

Within the executive branch, subject to the authority of POTUS; Food and Drug Administration

One of the primary checks on administrative power held by Congress, in its oversight of the bureaucracy is the:

bugetary power

Congress passed the Securities Exchange Act of 1934, which created the Securities Exchange Commission. This legislation, which created an independent regulatory agency, is known as:

enabling legislation

Theo is injured at work and files a workers' compensation claim, which is administered by the workers' compensation agency in his state. His employer disputes the extent of Theo's injuries. The case is heard by an administrative law judge (ALJ), who decides the case in the employer's favor. Theo's attorney tells him that his case cannot be appealed to a court because:

he has not yet appealed the decision to the workers compensation board that runs the agency

A rule issued by an administrative agency that clarifies or explains the agency's definition of statutes it enforces and how the agency intends to enforce them is a/an:

interpretive rule

The Food and Drug Administration (FDA) is investigating a report that Cherise Cosmetics Co. is in violation of purity and testing regulations. The FDA wants Yasmin, the lead chemist for the company, to testify at an administrative hearing. Yasmin refuses, so the FDA:

issues an ordinary subpoena

A rule issued by an administrative agency that has the same force of law as a congressional statute is known as a/an:

legislative rule

Chevron Deference (2-step test)

1. Did Congress directly address the issue in the statute? 2. Is the agency's interpretation reasonable?

Public Accountability: Small Business Regulatory Enforcement Fairness Act

Allows Congress to review new federal agency regulations for at least sixty (60) days before they take effect.

Public Accountability

As a result of growing public concern over the powers exercised by administrative agencies, Congress passed several laws to make agencies more accountable through public scrutiny.

Adjudication Hearing

Must provide procedural due process to the charged party and allow discovery process. The burden of proof is on the *charging party or agency*. After the hearing is over, the ALJ renders an initial order, or decision, on the case. Either party can appeal the ALJ's decision to the board or commission that governs the agency and can subsequently appeal the agency decision to a federal court. If no party appeals the case, the ALJ's decision becomes the final order of the agency.

The APA Arbitrary and Capricious Test

One of Congress's goals in enacting the APA was to provide for more judicial control over administrative agencies. To that end, 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 law." Under this standard, parties can challenge regulations as contrary to law or so irrational as to be arbitrary and capricious.

Public Accountability: Government in the Sunshine Act

Requires that "every portion of every meeting of an agency" be open to "public observation." The act also requires procedures to ensure that the public is provided with adequate advance notice of the agency's scheduled meeting and agenda.

Public Accountability: Freedom of Information Act

Requires the federal government to disclose certain records to any person on request, even if no reason is given for the request. A request that complies with FOIA procedures need only contain a reasonable description of the information sought. An agency's failure to comply with such a request can be challenged in a federal district court.

Administrative Agency's Rulemaking

Rulemaking is the main function of an administrative agency. Because agency rules have such great legal force, the APA created procedures for agencies to follow in creating rules. Many rules must be adopted using the APA's notice-and-comment rulemaking procedure, which involves three steps: + Notice of the proposed rulemaking + A comment period + The final rule

The Role of the Administrative Law Judge

The ALJ presides over the hearing and has the power to administer oaths, take testimony, rule on questions of evidence, and make determinations of fact. Technically, the ALJ is not an independent judge and works for the agency prosecuting the case. Nevertheless, the law requires an ALJ to be an unbiased adjudicator (judge).

The APA Fair Notice

The APA also includes many requirements concerning the notice that regulatory agencies must give to those affected by its regulations. For example, an agency may change the way it applies a certain regulatory principle. Before the change can be carried out, the agency must give fair notice of what conduct will be expected in the future.

The Administrative Procedure Act

The APA sets forth rules and regulations that govern the procedures administrative agencies follow in performing their duties.

The Chevron Bubble Policy

The agency's interpretation enabled it to adopt the so-called bubble policy, which allowed companies to offset increases in emissions in part of a plant with decreases elsewhere in the plant—an interpretation that reduced the pollution-control compliance costs faced by manufacturers.

Basic Functions of Administrative Agencies

They exercise powers that are normally divided between the three branches of government. In addition, the US Constitution allows only the Administrative branch to create laws, yet administrative agencies, not mentioned by the Constitution, can make legislative rules, or substantive rules, that are as legally binding as laws that Congress passes. Administrative agencies also issue interpretive rules, that are not legally binding but indicate how the agency plans to interpret or enforce its statutory authority.

One of the primary checks on administrative power held by the President, in his or her oversight of the bureaucracy, is the:

appointment power