Chapter 43 Administrative Law and Regulatory Agencies

Introduction to Administrative Law and Regulatory Agencies Businesses are subject to substantial federal, state, and local government regulation Government regulation Designed to protect employees and the public from unsafe and abusive practices by businesses 43-2 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Administrative Law Law that governments enact to regulate industries, businesses, and professionals Administrative agencies: Agencies that governments create to enforce regulatory statutes 43-3 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Exhibit 43.1 - Administrative Agency 43-4 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Government Regulation of Business Type of Regulation Description General government regulation Government regulation that applies to many industries Specific government regulation Government regulation that applies to a specific industry 43-5 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Federal Administrative Agencies Federal administrative agencies that are created by the U.S. Congress Cabinet-level federal departments: Federal agencies that advise the president and are responsible for enforcing specific administrative statutes enacted by Congress Independent federal administrative agencies: Federal agencies that have broad regulatory powers over key areas of the national economy 43-6 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

State and Local Administrative Agencies State administrative agencies: Created by legislative branches of states Administers state regulatory laws Local administrative agencies: Created by cities, municipalities, and counties Administers local regulatory law 43-7 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Administrative Procedure Administrative law—combination of substantive and procedural law Substantive administrative law—Law that an administrative agency enforces Procedural administrative law—Establishes the procedures that must be followed by an administrative agency while enforcing substantive laws 43-8 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Administrative Law Judge (ALJ) An employee of an administrative agency Presides over an administrative proceeding Decides questions of law and fact concerning cases Order: A decision issued by an administrative law judge Administrative Procedure Act (APA): A federal statute that establishes procedures to be followed by federal administrative agencies while conducting their affairs 43-9 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Powers of Administrative Agencies Delegation doctrine: A doctrine that says When an administrative agency is created, it is delegated certain powers The agency can use only the legislative, judicial, and executive powers that are delegated to it 43-10 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Powers of Administrative Agencies Legislative Power Description Substantive rule making To adopt rules that advance the purpose of the statutes that the agency is empowered to enforce. These rules have the force of law. Public notice and participation are required. Interpretive rule making To adopt rules that interpret statutes. These rules do not establish new laws. Neither public notice nor participation is required. Statements of policy To announce a proposed course of action the agency plans to take in the future. These statements do not have the force of law. Public participation and notice are not required Licensing To grant licenses to applicants (e.g., television station licenses, bank charters) and to suspend or revoke licenses. 43-11 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Powers of Administrative Agencies Description of Power Judicial The power to adjudicate cases through an administrative proceeding. This includes the power to issue a complaint, hold a hearing by an administrative law judge (ALJ), and issue an order deciding the case and assessing remedies. Executive The power to prosecute violations of statutes and administrative rules and orders. This includes the power to investigate suspected violations, issue administrative subpoenas, and conduct administrative searches. 43-12 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Administrative Searches Subject to the Fourth Amendment to the U.S. Constitution Unreasonable search and seizure: Any search and seizure by the government that violates the Fourth Amendment to the U.S. Constitution Evidence from an unreasonable search and seizure (“tainted evidence”) is inadmissible in court 43-13 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Case 43.1: U.S. Supreme Court Search of Business Premises New York v. Burger 482 U.S. 691, 107 S.Ct. 2636, 96 L.Ed.2d 601, Web 1987 U.S. Lexis 2725 Supreme Court of the United States 43-14 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Case 43.1: U.S. Supreme Court Search of Business Premises Issue Does the warrantless search of an automobile junkyard pursuant to a state statute that authorizes such search constitute an unreasonable search and seizure, in violation of the Fourth Amendment? 43-15 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Judicial Review of Administrative Agency Actions Review is expressly provided for in many federal statutes In the absence of enabling statute – APA authorizes judicial review of federal administrative agency actions 43-16 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Exhibit 43.3 - Appeal of a Federal Administrative Agency Decision Administrative Law Judge (ALJ) U.S. Supreme Court Federal Administrative Agency U.S. District Court U.S. Court of Appeals Whether the appeal from the Federal Administrative Agency is to the U.S. District Court or the U.S. Court of Appeals is determined by the federal law in question. 43-17 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Freedom of Information Act Federal act that gives the public access to documents in the possession of federal administrative agencies Documents are exempt from disclosure if they Are classified in the interests of national security Are statutorily prohibited from disclosure Interfere with law enforcement proceedings Are medical, personnel, and similar files Contain trade secrets, confidential or privileged information 43-18 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Government in the Sunshine Act A federal act that opens most federal administrative agency meetings to the public Exceptions are meetings: Where a person is accused of a crime Concerning an agency’s issuance of a subpoena Where attendance of the public would significantly frustrate the implementation of a proposed agency action Concerning day-to-day operations 43-19 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Equal Access to Justice Act A federal act that protects persons from harassment by federal administrative agencies Privacy Act: A federal act which states Federal administrative agencies can maintain only information about an individual that is relevant and necessary to accomplish a legitimate agency purpose 43-20 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

43-21 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.