1. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 19: Powers and Functions of Administrative Agencies © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

2. The Practical Significance of Administrative Law  Administrative law is created by administrative agencies which regulate many areas of our government, community, and businesses. A significant cost of ‘doing business’ requires compliance with administrative and agency laws.  2

3. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Practical Significance of Administrative Law  Administrative Agencies Exist at All Levels of Government.  Agencies Provide Comprehensive Regulatory Scheme. Many businesses have incentive to influence the regulatory environment. 3

4. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  The study of administrative law requires an understanding of: Enabling Legislation.  The Types of Agencies.  Agency Powers and the Constitution.  Agency Creation and Powers 4

5. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Enabling Legislation. Federal Trade Commission (FTC) granted power to: 1. To create “rules and regulations for the purpose of carrying out the Act.” 2. To conduct investigations of business practices.  Agency Creation and Powers 5

6. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Enabling Legislation. Federal Trade Commission (FTC) granted power to: 3. To obtain reports from interstate corporations concerning their business practices. 4. To investigate possible violations of federal antitrust statutes.  Agency Creation and Powers 6

7. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Enabling Legislation. Federal Trade Commission (FTC) granted power to: 5. To publish findings of its investigations. 6. To recommend new legislation. 7. To hold trial-like hearings to resolve disputes. Agency Creation and Powers 7

8. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Agency Powers and the Constitution. Legislative Rules: act as legally binding as laws passed by Congress. Agencies also pass interpretive rules. The Delegation Doctrine. Executive Controls: Presidential veto power.  Agency Creation and Powers 8

9. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Agency Powers and the Constitution. Judicial Controls. Exhaustion Doctrine: party seeking court review must first exhaust all administrative remedies before filing suit. Ripeness Doctrine: court will not review administrative decision until it is ‘ripe’ for review. Agency Creation and Powers 9

10. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  In the absence of clear Congressional direction, all federal agencies must follow APA procedural requirements in notice, rulemaking, and adjudication.  The Administrative Procedure Act 10

11. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Arbitrary and Capricious Test: The APA gives courts power to hold agencies’ actions “arbitrary and capricious” if they are not in compliance with constitutional due process. CASE 19.1 FCC V. F OX T ELEVISION S TATIONS, I NC. (2009). CASE 19.1 FCC V. F OX T ELEVISION S TATIONS, I NC. (2009). Are the FCC’s indecency rules too ‘vague’? The Administrative Procedure Act 11

12. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Rulemaking: formulation of new regulation. Notice and Comment Rulemaking involves three steps: Notice of the Proposed Rulemaking. Comment Period. The Final Rule.  Informal Agency Action: exempt from APA, do not establish legal rights. The Administrative Procedure Act 12

13. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  The Holding of the Chevron Case. Issue was whether courts should defer to an agency’s interpretation of the enabling legislation which gives it authority to act. In Chevron, the EPA interpreted not only the facts, but the law.  Judicial Deference to Agency Decisions 13

14. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  The Chevron Case (cont’d). The U.S. Supreme Court held that a federal agency could interpret law with a two prong test: (1) did Congress directly address the issue in a statute? And (2) if the statute is silent, was the agency’s interpretation of the law “reasonable”?  Judicial Deference to Agency Decisions 14

15. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  When Courts Will Give Chevron Deference to Agency Interpretation. When the meaning of a statute’s language is unclear, courts must follow agency interpretation if reasonable. CASE 19.2 Mayo Foundation for Medical Education and Research v. United States (2011). CASE 19.2 Mayo Foundation for Medical Education and Research v. United States (2011). Judicial Deference to Agency Decisions 15

16. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Agency Enforcement and Adjudication  Investigation includes the powers to: Conduct Inspections. Issue Subpoenas. Conduct Site Inspections (including warrantless inspections in certain limited situations such as firearms or liquor). 16

17. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Agency Enforcement and Adjudication  Adjudication (like a trial before a judge). Negotiated Settlements. Formal Complaints. Role of the Administrative Law Judge. Hearing Procedures. Agency Orders. 17

18. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  A number of pieces of legislation make agencies more accountable through public scrutiny. Freedom of Information Act.  Government in the Sunshine Act.  Regulatory Flexibility Act.  Small Business Regulatory Enforcement Fairness Act.  Public Accountability 18

19. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Freedom of Information Act. Requires federal government to disclose records on request, but denial can be challenged in court. CASE 19.3 U NITED T ECHNOLOGIES C ORP. V. U.S. D EPARTMENT OF D EFENSE (2010). CASE 19.3 U NITED T ECHNOLOGIES C ORP. V. U.S. D EPARTMENT OF D EFENSE (2010). Court ordered a rational connection between facts and choice to deny. Public Accountability 19

20. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Government in the Sunshine Act. Requires that “every portion of every meeting of an agency” be open to “public observation.” Adequate notice of meetings must be given to the public. Closed meetings are authorized in a limited number of instances. Public Accountability 20

21. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Regulatory Flexibility Act. Requires an analysis of the cost a regulation will impose on small business and must consider less burdensome alternatives. Public Accountability 21

22. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Small Business Regulatory Enforcement Fairness Act. Allows Congress to review new federal regulations for at least sixty-days before they can take effect. Public Accountability 22

23. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. State Administrative Agencies  Play significant role in administrative law.  States play parallel role with federal agencies.  If federal and state agencies conflict, federal administrative law governs. 23