Chapter 5 business law
Which of the following is not part of the Administrative Procedures Act? a. Freedom of Information Act b. Privacy Act c. Government in the Sunshine Act d. Federal Register Act
ANS: D
Which of these can create an administrative agency: a. Congress b. state legislature c. city government d. all of these
ANS: D
Appeals from federal administrative agency decisions go: a. to federal district court. b. to U.S. Court of Appeals. c. directly to the U.S. Supreme Court. d. none of the above
B
The Administrative Procedures Act requires each federal agency to decide what procedures will be used for promulgating new regulations.
false
The Code of Federal Regulations is published every business working day.
false
The Department of Homeland Security has authority over terrorism issues, but not natural disasters.
false
The Department of Labor Relations Boards is an Executive Department.
false
The Federal Register Act is part of the Administrative Procedures Act.
false
The Federal Register System includes the Federal Register, the Code of Federal Regulations, and the United States Code.
false
The Government in the Sunshine Act applies to all federal administrative agencies.
false
The Government in the Sunshine Act created the Code of Federal Regulations.
false
The Regulatory Flexibility Act allows agencies flexibility in rule making by not requiring publication of proposed rules.
false
The substantial evidence challenge cannot be used in cases where formal rule-making procedures were followed.
false
Due process rights before an administrative agency require that formal trials be held before rights are taken away.
false
During the public comment period for a proposed rule, only affected businesses can make comments.
false
Exhausting administrative remedies is suggested, but not required, before litigation.
false
Federal agencies are not allowed to charge fees for copies of reports released under the Freedom of Information Act.
false
Federal agencies do not have the authority to issue fines.
false
Government in the Sunshine is another name for the Freedom of Information Act.
false
Hearings are required in all federal rule proposals.
false
Hearings conducted by agencies for enforcement purposes need not provide due process for the parties.
false
Under a Freedom of Information Act request, a member of the public can obtain all information in the files of a federal agency.
false
Under the FOIA, agencies are not permitted to charge for copying costs.
false
Formal rule making requires publication of proposed rules.
true
Inspections are a means of enforcement for administrative agencies.
true
Inspections by administrative agencies require a search warrant unless the business owner gives permission.
true
Law enforcement agencies are exempt from the Federal Privacy Act.
true
Law enforcement purposes are an exception to the prohibited exchanges of information among agencies under the Federal Privacy Act.
true
Many federal agencies use licensing as a means of enforcement.
true
Only businesses can provide input during the comment period of rule making.
true
The Code of Federal Regulations contains all the regulations of federal agencies.
true
The Federal Privacy Act restricts the free exchange of information among federal agencies.
true
The Federal Register System provides the means for the Government in the Sunshine notices and publication of agency rules and procedures.
true
The Federal Register is a daily update of changes and proposed changes in the Code of Federal Regulations.
true
The Freedom of Information Act is part of the Administrative Procedures Act.
true
The Government in the Sunshine Act is often referred to as an open-meeting law.
true
The Government in the Sunshine Act requires advance notice of agency meetings and hearings.
true
The Privacy Act is part of the Administrative Procedures Act.
true
The U.S. Government Manual contains information on national and regional agency offices.
true
The decision of an administrative law judge can be appealed to the agency heads.
true
To withstand challenges, proposed agency rules must be supported by some studies or evidence.
true
If an administrative agency decides to withdraw proposed rules after the comment period, it must have another comment period concerning the decision to withdraw the proposed rules.
false
Informal rule making does not require publication of proposed rules.
false
Informal rule making is not permitted for promulgation of rules.
false
Once a rule is proposed, it cannot be withdrawn.
false
Only businesses can provide input in the formal rulemaking process.
false
Only consumers have rights of comment during the public comment period.
false
Only published agency information can be obtained through a Freedom of Information Act request.
false
Reverse FOIA suits are suits by agencies to stop disclosures.
false
Comment periods are not required for modifications of rules, only new rules.
false
Which of the following is not an example of an enabling act? a. Government in the Sunshine Act b. Securities Exchange Act of 1934 c. Federal Trade Commission Act d. Occupational Safety and Health Act
ANS: A
Choose the answer with the proper order for administrative rulemaking. a. study of the problem, notice of rulemaking, public comment period, promulgation b. study of the problem, public comment period, notice of rulemaking, promulgation c. notice of proposed rulemaking, study of the problem, public comment period, promulgation d.notice of proposed rulemaking, public comment period, study of the problem, promulgation e. notice of proposed rulemaking, consent decree, public comment period, study of the problem, promulgation
A
Which of the following is not an exemption for following the disclosure requirements under the Federal Privacy Act? a. medical records b. FBI investigations c. SEC stock-trading records d. Congress
ANS: A
Who presides over the hearing between a federal agency and a defendant accused of a violation of the agency's rule? a. administrative law judge b. federal district judge c.hearing officer d. the director of the agency
ANS: A
10. Public hearings: a. are required in both formal and informal rule making. b. can be held regionally. c. are required under the Regulatory Flexibility Act. d. none of the above
ANS: B
6. A reverse FOIA suit is: a. one brought by an administrative agency. b. a suit to stop disclosure of information. c. not available at the federal level. d. a suit brought by an agency against another agency.
ANS: B
The FDA had approved a new diet drug for the market. The agency pulled the approval and the drug off the market because a staff member said, "This drug didn't work for me." The manufacturer of the drug could challenge the FDA action: a. as arbitrary and capricious. b. on the basis of a failure to follow ADA procedures. c. lack of substantial evidence. d. any of the above
ANS: D
Ralph Watkins is the president of Animal Crackers, Inc. Animal Crackers operates childrens' clothing stores. Ralph has just received notice of charges by the Federal Trade Commission (FTC) against Animal Crackers for deceptive advertising. Watkins wishes to know the company's rights. Which of the following statements is true? a. Animal Crackers is entitled to a jury trial. b. Animal Crackers could dispose of the matter through a consent decree. c. Animal Crackers is facing criminal charges. d. Animal Crackers will have a 30-day comment period.
ANS: B
The Federal Register averages about _____ pages of proposals and notices every working day. a.700 b.7,000 c. 2,500 d. 250
ANS: D
The public comment period: a. need not be 30 days if there are formal hearings. b. need not be 30 days if the Regulatory Flexibility Act is followed. c. can never exceed 90 days. d. must be at least 30 days.
ANS: D
3. The Administrative Procedures Act includes: a. the Freedom of Information Act. b. the Federal Register Act. c. enabling legislation. d. all of these.
ANS: A
4. An FOIA request (to be valid): a. must be in writing. b. must describe the reason the documents are sought. c. can request any information in an agency's file. d. must include prepayment of copy fees.
ANS: A
8. The Government in the Sunshine Act: a. is often called an open-meeting law. b. applies to federal agencies whose heads are appointed by Congress. c. requires all agency meetings to be public. d. applies to congressional committee meetings.
ANS: A
If a company challenges a penalty imposed by an administrative agency, which of the following is the correct order for its appeal? a. ALJ, agency commissioners, judicial challenge b. judicial challenge, ALJ, agency commissioners c. agency commissioners, ALJ, judicial challenge d. None of the above is in the correct order.
ANS: A
The Department of Justice requires escrow and title companies to maintain records of transactions and report those transactions that involve more than $10,000 in cash. Title companies are worried about disclosure of the information to federal agencies. Which of the following is correct? a. The information may be disclosed if it is being used for law enforcement purposes by the agency. b. The information is financial and private and disclosure would be arbitrary and capricious. c. The information cannot be disclosed unless there is a prior disclosure of the agency request to the parties involved. d. none of the above
ANS: A
Which law simplified rulemaking for businesses? a. Regulatory Flexibility Act b. Freedom of Information Act c. Administrative Procedures Act d. both a and b e. none of the above
ANS: A
The Department of Homeland Security has been given the responsibility for the construction of a fence along the border between the United States and Mexico. The Department has not followed the 30-day comment rule on the composition and location of the proposed fence. Secretary Chertoff says that the fence is a matter of national security. The Department: a. has not complied with the rulemaking requirements and cannot proceed with the fence. b. is using the emergency exception for the time waiver on rulemaking. c. does not have the authority to waive the time requirements. d. both a and c
ANS: B
The National Transportation Safety Board has proposed a new regulation that would require children under the age of two to be strapped into car seats in their own seats on airplanes. Currently, children under the age of two are nonpaying passengers who ride on their parents' laps. What opportunities will airlines and parents have for input on the proposed rule? a. They can write their congressional representatives. b. They can send in comment letters to the NTSB. c. They can seek a presidential veto. d. They can go to court to block the proposal.
ANS: B
The Regulatory Flexibility Act: a. created the process of hybrid rule making. b. requires publication of rule notices in trade magazines. c. requires a six-month comment period in formal rule making. d. allows regulators to promulgate rules without prior notice.
ANS: B
Ultra vires means: a. a bad violation of law." b. "beyond its powers."c. "arbitrary." d. "capricious."
ANS: B
What is the effect of a consent decree?a. The agency's charges are dismissed with no sanctions. b. The party makes no admissions as to conduct. c. There is still judicial appeal from a consent decree. d. It is no longer available under the Regulatory Flexibility Act. e. none of the above
ANS: B
Which of the following is not one of the purposes of agency inspections? a. ensuring safe working conditions for employees b. protecting investors c. ensuring safety for consumers d. enforcing regulations
ANS: B
arbitrary and capricious b. failure to comply with statutory procedures c. favoritism d. none of the above
ANS: B
7. The Federal Privacy Act:a. prohibits release of information (by public agencies) on individuals. b. does not apply to all agencies. c. provides a disclosure exemption for law enforcement purposes. d. does not cover medical records.
ANS: C
A court challenge to a promulgated rule based on the theory that the agency exceeded its authority is: a. a substantial evidence challenge. b. an arbitrary and capricious challenge. c. an ultra vires challenge. d.all of the above
ANS: C
Choose the answer with the correct order for administrative agency enforcement proceedings.a.charges, consent decree, hearing, appeal b. charges, information gathering, consent decree, fines c. charges, hearing, findings and decision, administrative agency decision, judicial appeal d. charges, hearing, findings and decision, judicial appeal e. charges, hearing, consent decree, judicial appeal
ANS: C
Choose the one with the correct ordering of rulemaking functions from among the following: a. enabling statute, comment period, studies of issues, promulgation b. enabling statute, studies of issues, promulgation, comment period c. enabling statute, studies of issues, comment period, promulgation d. None of the above is in correct order.
ANS: C
John Forsyth is the head of the Securities Exchange Commission. There are new rules pending before the SEC that would require lawyers to blow the whistle on their clients. The American Bar Association, which is opposed to the legislation, has just offered Mr. Forsyth's son a full scholarship to the law school of his choice. a. The in-kind contribution to his son is a violation of the law. b. A scholarship to Mr. Forsyth would be illegal, but not to his son. c. The ABA has not violated any law if there is no connection between the proposed rule and the scholarship. d. none of the above
ANS: C
Notice of a proposed federal regulation in The Federal Register need not contain: a. the name of the proposing agency. b. the statutory authority for promulgating the rules. c. the environmental impact of the proposal. d. the language or the proposed rule or a summary.
ANS: C
The Federal Privacy Act: a. is the same as the Regulatory Flexibility Act. b. does not apply to medical and employment histories. c. is part of the Administrative Procedures Act. d. applies to all law enforcement information exchanges.
ANS: C
What is the difference between formal rulemaking and informal rulemaking? a. Formal requires notice while the latter are simply immaterial changes to rules. b.Formal requires a public comment period and informal rulemaking does not. c. Formal requires public hearings and information does not. d. Formal requires Government in the Sunshine Notices and informal does not. e.none of the above
ANS: C
When an agency uses some aspects of formal rulemaking and some aspects of informal rulemaking, it is called: a. mixed rulemaking b. combination rulemaking c. hybrid rulemaking d. cross rulemaking
ANS: C
Which of the following is not one of the functions of administrative agencies? a. adjudicating rules b. enforcing rules c. interpreting statutes d. promulgating regulations
ANS: C
"Reverse FOIA suits" are: a. lawsuits brought by federal agencies to stop disclosure of information. b. suits challenging the constitutionality of the FOIA. c. suits by citizens brought to enforce their rights in FOIA requests. d. none of the above
ANS: D
11. Which of the following is not grounds for challenging an administrative regulation? a. arbitrary and capricious b. lack of substantial evidence c. ultra vires d. lack of a congressional hearing
ANS: D
9. Formal rule making differs from informal rule making in: a. public notice is required for formal rule making not informal. b. a public comment period is needed for formal rule making but not informal. c. no modification period exists in formal rule making. d. none of the above
ANS: D
Sanctions that can be imposed by agencies include: a. injunctions. b. fines. c. loss of license. d. all of the above
ANS: D
Where could a business find notices of proposed rules? a. The Code of Federal Regulations b. The Federal Register c. industry trade publications d. both b and c
ANS: D
Why must an agency research the problem it seeks to address? a. The agency must establish the purpose for any new rules proposed. b. The agency must present evidence that the regulation will accomplish its purpose. c. The agency must determine if the regulation will be cost effective. d. All of the above are reasons an agency must research the problems it is addressing.
ANS: D
Addison Winchell is the CEO of a printing firm located in Lexington, Kentucky. The state office of environment quality has proposed a rule mandating the use of soy inks and recycled paper by all printers in the state. Winchell says the expense will put him out of business. What can Winchell do? a. Provide comments to the proposed rule. b. Go directly to court with a constitutional challenge. c. Present evidence if a trade group supports him. d.All of the above.
ANS:A
Four of the five commissioners for the Federal Trade Commission were working late one evening in their Washington, D.C. offices. The four were catching up on their electronic mail. The four soon discovered each others' presence on electronic mail. One commissioner wrote to the other three, "Let's get some business done so long as we're all here. We could resolve that unfair competition case that's pending for next month. We can iron out our differences via e-mail." The electronic exchanges of the commissioners would: a. be protected because they are internal agency actions. b. violate the Government in the Sunshine Act open meeting laws. c. be considered law enforcement issues and would be protected from open-meeting laws. d. not be a meeting without some staff members present.
ANS:B
Other parties with an interest in an administrative case are known as _____.a.co-defendants b. cross-plaintiffs c. intervenors d. speculator
ANS:C
Which is not a role administrative agencies play? a. rule making b. enforcement c. adjudication d. Administrative agencies play all of the above roles.
ANS:C
Andrew Flint is the CEO of a small, publicly held company based in Idaho Falls, Idaho. Flint earned $76,000 last year as CEO. Investors in Flint's firm are earning nearly 15 percent on their shares. Flint has learned that the SEC is considering a proposed rule mandating salary studies for all publicly held firms. Flint has priced such studies and has estimates ranging from $27,000 to $40,000. Flint would like the SEC to understand his firm's position. Which of the following statements is true? a. Flint will need to hire a lawyer to present evidence to the SEC. b. Flint can challenge the rule only after promulgation. c. Flint's challenge must be made in court. d. Flint can simply write to the SEC to voice his concerns.
ANS:D
Which of the following meetings would be subject to the open-meeting provisions of the federal sunshine laws? a. a meeting of the staff attorneys of the SEC enforcement division b. a meeting of the division heads of the Federal Trade Commission c. a meeting of the nine justices of the U.S. Supreme Court d. a meeting of three of the five commissioners of the Federal Aviation Administration
ANS:D
1. All administrative agencies: a. are at the federal level. b. promulgate regulations. c. are created by the U.S. President. d. are under sunset laws.
B
5. Which of the following is not exempt from an FOIA request? a. national defense or foreign policy information b. internal agency policies on copy charges c. trade secrets d. investigation records
B
A consent decree is: a. comparable to a not guilty plea. b. comparable to a nolo contendere plea. c. a guilty plea to agency charges. d. not made public.
B
12. Enforcement of federal administrative regulations: a. is a function of the executive branch. b. is a function of the Justice Department. c. is part of the agency's role. d. none of the above
C
All administrative agency actions against accused violators start with a: a. prosecution. b. consent decree. c. complaint. d. cease-and-desist order.
C
Enabling acts: a. are regulations of administrative agencies. b. are nonlegislative provisions. c. establish administrative agencies and their authority. d. must contain sunset provisions.
C
Before administrative agencies' rules become law, there must be congressional approval.
true
A consent decree is a guilty plea.
false
Administrative agencies have no authority to act unless a property right has been infringed.
false
Administrative laws and agencies seldom impact the business world directly.
false
An enabling act is an act approving rules promulgated by an administrative agency.
false
An ultra vires challenge to an administrative regulation is one brought on the grounds of procedural error.
false
Appeals of federal administrative agency decisions go to federal district court.
false
Appeals of federal agency decisions to courts of appeal require a grant of certiorari.
false
Both formal and informal rule-making processes include public hearings.
false
City governments cannot create administrative agencies.
false
A consent decree is similar to a nolo contendere plea.
true
A public comment period must be a minimum of 30 days.
true
A rule is arbitrary and capricious if there is no evidence to support its promulgation.
true
Administrative agencies are created by some legislative body.
true
Administrative agencies can exist at any level of government.
true
Administrative agencies serve as courts for hearings on rule violations.
true
Administrative remedies must be exhausted before a court will review agency actions.
true
An FOIA request can be denied if national security information is involved.
true
An administrative agency is a statutory creation within the executive branch.
true
An administrative agency is neither a legislative nor a judicial body.
true
An agency that fails to investigate the issues before proposing a rule has acted arbitrarily and capriciously.
true
An ultra vires challenge is a challenge of the agency's jurisdictional authority on a rule.
true