1. CHAPTER 4
Common Law,
Statutory Law, and
Administrative Law

2. Three Sources of Law
Common Law
Statutory Law
Administrative Law

3. Common Law
Judge-made law; made up of all the decisions made by appellate courts.
Two hundred years ago, almost all law was common law; most new law is statutory.
Common law predominates in tort, contract, and agency law; it is important in property and employment law.
Based on stare decisis, meaning “let the decision stand” (previous decisions are generally upheld in similar cases.)
Incorporates predictability and flexibility.

4. Changes in Common Law
Over time, changes in society’s norms have an effect on long-standing common law. An example of this is the law that applies to bystanders in emergencies.
Under common law, bystanders have no obligation to assist a victim in an emergency.
Over time, courts have created exceptions, making employers obliged to help an employee who is suddenly stricken with an emergency situation when the employer is present.
Some courts now hold that anyone witnessing an extreme situation or if there is a special relationship, such as patient-therapist, should be required to help, though this is not universal.

5. Statutory Law
Most new law is statutory, that is, it is legislation passed by either a state legislature or the Congress of the United States.
Citizens who vote have some control over statutory law. We elect the state congressional representatives and the United States Senators and Representatives.

6. How New Laws are Made
Any member of Congress (Senator or Representative) can initiate a bill, or proposed law.
A bill is debated in a committee in the house where it was introduced.
From the committee, it goes to the full house for a vote.
If it passes both houses this way, it goes to the President for his signature.
A President’s signature turns a bill into law.

7. How New Laws Are Made President President Conference Committee
If vetoed, it goes back to the Congress, where it must pass both houses by a 2/3 majority.
If signed, the bill becomes law.
If the second House of Congress made any changes, or amendments, to the bill, it must go to a Conference Committee, made up of members of both houses. Here, they work out compromises between the two different versions of the bill. The compromise bill then goes back to both houses for a final vote.
Once both houses pass the compromise bill, it is sent to the President to be signed.
President
President
House of Representatives
Senate
Conference Committee
If it passes there, it goes to the other house (House to Senate or Senate to House).
After it passes committee, the bill goes to the full body of that house for a vote.
It is assigned to a committee and the process repeats.
Aeronautical and Space Sciences
Armed Services
Judiciary Committee
Appropriation
Foreign Relations
Armed Services
Agriculture
Ways and Means
Banking, Finance, and Urban Affairs
Education and Labor
Judiciary Committee
A bill, or proposed law, is introduced in the House of Representatives or the Senate and then assigned to a committee for discussion and voting.
Major House Committees
Major Senate Committees

8. Why Are Bills Proposed?
New issues or new worries – such as employment discrimination and Internet privacy or copyright issues
Unpopular judicial rulings – if Congress disagrees with a judicial interpretation of a statute, it may pass a new statute to “undo” the decision of the court, unless the decision at hand is based on the U.S. Constitution.
Criminal law – must be set forth in clear terms through statutes rather than left to judicial interpretation.

9. Statutory Interpretation
Sometimes wording is ambiguous, either by oversight, or intentional -- as a compromise.
New laws must be interpreted by the courts.
Plain Meaning Rule -- the courts must use the common sense definition of words.
Legislative History and Intent -- sometimes the court can look to the reasons behind the law to determine the legislators’ intent.
Public Policy -- the courts will use accepted social policies, such as reducing crime or providing education to interpret a law.
Once the law (statute) has been applied by the courts, its interpretation becomes a precedent to be used in future court cases.

10. The Other Player -- Money
In today’s political climate, running a campaign for political office is an expensive endeavor.
Financial contributions to candidates or political parties come from many sources. Some limits have been placed on contributions, such as those enacted in 2002, but loopholes still exist.
Donors usually expect to receive some benefit, such as favored treatment in future legislative issues.
Supporters of contribution limits aim to equalize the access to politics for rich and poor; opponents claim that the First Amendment guarantees their right to support whomever they choose.
The very green bottom line is, MONEY TALKS -- and it often talks loudly in the political arena!

11. Administrative Law
Federal agencies such as the Federal Aviation Agency (FAA) and the Federal Trade Commission (FTC) and the Bureau of Land Management, have the power to make regulations.
Agencies were -- and are -- created to fulfill a need. Someone needs to oversee changing technologies and practices and their effects on society.
An agency is created when Congress passes enabling legislation, which describes a problem and defines the agency’s powers.
Agencies often have considerable power in their areas of specialty, sometimes leading to controversy.
The Administrative Procedure Act regulates agencies, in an attempt to reduce controversy.

12. Classification of Agencies
Executive Federal Agency: Part of executive branch, under the control of the President; usually support the President’s policies. Examples:
Federal Bureau of Investigation (FBI)
Nuclear Regulatory Commission
Food and Drug Administration (FDA)
Internal Revenue Service (IRS)
Independent Federal Agency: Not part of executive branch; President does not have the power to fire the head of the agency.
Environmental Protection Agency (EPA)
National Labor Relations Board
Federal Communications Commission (FCC)
Securities and Exchange Commission
Federal Trade Commission (FTC)

13. The Administrative Procedure Act
Passed in 1946 to bring uniformity and control to many federal agencies.
Regulates how federal agencies make rules, conduct investigations, hold meetings and hearings, reach decisions and obtain and release information.

14. Power of Agencies -- Rulemaking
Two types of rules
Legislative rules -- require businesses and people to act a certain way; have the effect of a Congressional statute.
Interpretive rules -- these do not change the law; they define or apply the laws to new situations.

15. Power of Agencies -- Rulemaking
Three types of rulemaking
Informal rulemaking -- proposed rule must be published and public allowed to comment.
Formal rulemaking -- must hold a public hearing before establishing the rule.
Hybrid rulemaking -- some elements of both of the above -- perhaps the proposal and comment, with cross-examination, but not a full hearing.

16. Power of Agencies -- Investigation
Voluntary -- Some businesses freely give information and readily comply with agency recommendations.
Subpoena -- an order to appear at a hearing and produce evidence, sometimes documents.
Must be relevant to the investigation and under the agency’s jurisdiction, or area of authority.
Must not be unreasonably burdensome on the business.
Must not be privileged; this means that a corporate officer may not be required to incriminate himself.

17. Power of Agencies -- Investigation
Recalls – The US Product Safety Commission investigates hundreds of consumer products each year and urges a recall of products considered dangerous.
Subpoena – an order to appear at a particular time and place to provide evidence; may be used to force disclosure
Search and Seizure – a legal search of a business, in order to take evidence of wrongdoing.
Most require a warrant before the search.
Some industries are closely regulated and may be searched at any time, with no warning.

18. Power of Agencies -- Adjudication
Adjudicate -- means to hold a hearing, then decide how to proceed with an issue.
Procedures for adjudication
A hearing before an administrative law judge.
Parties have counsel, but there is no jury.
Informal; both sides present evidence.
Judge makes ruling on testimony and evidence.
If parties are unhappy with results
Loser may appeal to an appellate board.
Appellate board may make a de novo decision, and ignore the administrative law judge’s decision.
Appeals go to a federal court.

19. Limits on Agency Power Statutory Control Political Control
The enabling legislation that created the agency places controls on it through requirements and restrictions.
Political Control
The President has control over agencies through political pressure and through nominations of agency heads.
Congress controls the budgets of agencies. They can eliminate funding for any program or an entire agency.
Congress can amend enabling legislation to place limits.

20. Limits on Agency Power Judicial Review
A party injured by an agency decision is entitled to an appeal in a federal court, after all appeal options are exhausted within the agency itself.
The court must consider the facts as stated by the experts in the agency and the law as interpreted by the agency.
Informational Control and the Public
The Freedom of Information Act (FOIA) -- allows any citizen to request information from an agency.
The Privacy Act -- prohibits agencies from giving information about an individual to other agencies without consent. There are some exceptions.