1. Chapter 5 Administrative Law © 2012 South-Western, a part of Cengage Learning

2. Quote “I don't know jokes; I just watch the government and report the facts.” – Will Rogers, Humorist, 1879-1935 © 2012 South-Western, a part of Cengage Learning

3. Administrative Rules and Regulations Six hours on the tarmac: how can we protect ourselves against this possibility? Can Congress act to prevent such action? Do the courts have authority to resolve such a problem? How about the President? Governor? Mayor? What gives the federal Dep’t of Transportation the authority to order airlines to limit tarmac waits? Was the DOT correct in implementing the three-hour rule? Do the voters have any control over the DOT? © 2012 South-Western, a part of Cengage Learning

4. What Is Administrative Law?  Law of administrative agencies, a vast portion of government sometimes called the “fourth branch of the government.”  Probably affects citizens of the United States far more than judicial proceedings or legislation  Term used to describe two very different subjects of law – Law governing agency process and procedure – Law that agencies create and apply © 2012 South-Western, a part of Cengage Learning

5. Administrative Agencies Administrative agencies are a consequence of an industrialized society – Need exists for standing bodies to administer fluid rules for specialized aspects of our society – First true independent administrative agency was the interstate commerce commission (ICC) established in 1887 to monitor private railroad activity © 2012 South-Western, a part of Cengage Learning

6. EXAMPLES OF ADMINISTRATIVE AGENCIES Federal: – IRS – Dep’t of Justice – SEC – FTC – ICC – FAA – Homeland Security – EPA – EEOC – NLRB SEE Exhibit 5.3 Washington State: – Dep’t of Social and Health Services – Attorney General – Securities Division – Consumer Protection Div. – Dep’t of Transportation – State Patrol – Dep’t of Ecology – Human Rights Commission – PERC – Secretary of State © 2012 South-Western, a part of Cengage Learning

7. Administrative Agencies Agencies are created by – Constitution – Statute creating agency (Enabling Statute) – most common – Executive fiat authorized by statute © 2012 South-Western, a part of Cengage Learning

8. Types of Administrative Agencies Executive Departments – A dependent executive agency or department Is headed by a single appointment at the pleasure of the president – Example FBI; Homeland Security Independent administrative agency – Members appointed by the president with the consent of congress – Administered by group rather than a single agency head. Usually five to eleven members – Members cannot be terminated except for cause or upon completion of term of office – Example: National Labor Relations Board/William Humphrey and the FTC © 2012 South-Western, a part of Cengage Learning

9. History of Administrative Agencies Early executive agencies: Departments of State, Treasury, War, Post Office, AG ICC: 1880s FTC: 1914 New Deal: SEC, FCC, NLRB 1960s and 1970s: EPA, EEOC, OSHA Continual tension between regulation and deregulation © 2012 South-Western, a part of Cengage Learning

10. Enabling Statute Congress creates the agency and the agency further defines itself and its mission Delegations are lawful provided they are not overly broad. Adequate guidelines need be provided in the enabling statute The legislature recognizes the complexity of detailed government regulation of the subject activity and the necessity that persons who create the law be experts in the field they regulate Agencies are given various powers to accomplish the objectives of the enabling statute © 2012 South-Western, a part of Cengage Learning

11. Administrative Procedure Act (APA) Law that mandates various procedures for most federal administrative agencies. Basic purposes – Require agencies to keep the public informed of their organization, procedures and rules – Provide for public participation in the rulemaking process – Establish uniform standards for the conduct of formal rulemaking and adjudication – Define scope of judicial review © 2012 South-Western, a part of Cengage Learning

12. Delegation of Power Guidelines to determine whether delegation is valid: – To whom is the delegation made? – Is the delegation for a proper purpose? – Have guidelines for delegated conduct been provided in the legislation? – Does a fair process for creating regulations or administering tasks exist? – Reason for the delegation – Does delegation affect personal rights? The APA provides answers to most procedural questions © 2012 South-Western, a part of Cengage Learning

13. State Agencies Executive: WSP, DSHS, Department of Licenses, Department of Employment Security, Department of Labor and Industries Independent/ administered by board: UW, Utilities and Transportation Commission Independent/elected by voters: Attorney General, Secretary of State, Insurance Commissioner © 2012 South-Western, a part of Cengage Learning

14. Leading Areas of Administrative Law Business Finance – SEC, Federal Reserve Board Communications - FCC Employment Practices – NLRB, PERC, EEOC Environment – EPA, Dep’t of Ecology Energy – FERC, NRC Free Enterprise and Healthy Competition - FTC Other Areas of Administrative Law © 2012 South-Western, a part of Cengage Learning

15. Administrative Functions Quasi-legislation - Rule making – Licensing – Regulations Investigation – Findings – Reports – Search/seizure Enforcement – Quasi-adjudication – Formal fact finding and review – Orders/decisions © 2012 South-Western, a part of Cengage Learning

16. Rulemaking quasi-legislation - regulation Primarily controlled by the Administrative Procedure Act (APA) Process for rulemaking: Rulemaking agencies are subject to the same constitutional procedural requirements as the legislature – Informal consultation – Correspondence – Polls – Questionnaires – Conferences – Interviews – Legislative type hearings © 2012 South-Western, a part of Cengage Learning

17. Types of agency rules Regulations – Substantive - Legal equivalent of a statute. Compels compliance Creates rights and duties – Procedural - How to perfect rights and comply with mandated duties Rules – Interpretative - what an agency determines a statute or regulation means. Internal rules Once regulations are adopted, they have the same force of law as a statute © 2012 South-Western, a part of Cengage Learning

18. Rulemaking quasi-legislation - regulation Federal register - Publication and notice – Requirements for comment proceedings – Proposed rules, and final rules Parties are usually given sixty days to comment Public hearing may be part of the process Notice must provide indication of what will take place Negotiated Rule Making: Brings together representatives of a rulemaking agency and stakeholders to seek consensus rules before the agency formally submits the rule to the rulemaking process © 2012 South-Western, a part of Cengage Learning

19. How do people find out about proposed regulations? Trade associations Legal specialists Special legal publications Sometimes specially directed notice from the agency E-mail and or fax notice © 2012 South-Western, a part of Cengage Learning

20. Agency Information Gathering How does government get information? – Is it voluntarily given? – Use of subpoena if authorized by statute. – Reports required by law Physical inspections: Right to be secure from unreasonable search and seizure - warrant requirements are less demanding for administrative search than a criminal investigation – Search warrants – Warrantless searches Self-incrimination protection exists © 2012 South-Western, a part of Cengage Learning

21. Administrative Hearing - Quasi-Adjudication Policy making by hearing and resolution of individual disputes Decides fact based cases when an agency’s action denies a person a license, right, entitlement, or privilege General Requirement of Due Process: Fair Treatment – Balance of private interest with the government’s interest © 2012 South-Western, a part of Cengage Learning

22. Nature of Administrative Hearings Administrative due process concerns: Judge Friendly – Prompt notice of hearing – Timely notice of hearing – Convenience of parties in scheduling hearing – No prior involvement by hearing officer – Hearing officer agency member or Administrative Law Judge – Exclusive record provided by the process – Opportunity to present evidence and witnesses – Opportunity to rebut and cross-examination the other party – Right to attorney with cost borne by party – Statement of reasons for the decision – Public right to attend? – Judicial review? – What is missing? © 2012 South-Western, a part of Cengage Learning

23. Example of Federal Administrative Action The 2004 Super Bowl Janet Jackson/Justin Timberlake FCC fine Court review and decision © 2012 South-Western, a part of Cengage Learning

24. Example of Administrative Action Day care center licensed by State Inspected regularly by DSHS social worker Rule: license may be revoked if licensee abuses drugs or alcohol Center’s license revoked Licensee appealed; hearing set before ALJ Nature of hearing; reconsideration Court appeal? Resolution negotiated Note: balance between public interest in safeguarding individuals versus business interests ADR? © 2012 South-Western, a part of Cengage Learning

25. Limits on Agency Power Political control – Appointment – Legislation – Budget Constitutional guarantees Public accountability – Sunshine laws – Open meeting – Regulatory Flexibility Act – Freedom of Information Act © 2012 South-Western, a part of Cengage Learning

26. Freedom of Information Act Requirement that governmental agencies make information available to the public. Part of the APA Each agency required to make information available – Statements of general task of agency, organizational work flow, formal and informal procedures. – Rules of procedure and forms in use – Adopted rules and statements of policy, and interpretations of general applicability – Final adjudication opinions – Statements of policy not published in the federal register – Administrative staff manuals and instructions to the staff that affect member of the public © 2012 South-Western, a part of Cengage Learning

27. Judicial Review Ultimate power to declare the law exists in the courts The extent and nature of the review is subject to limitation. Limiting factors: – Legislative – Executive – the courts themselves © 2012 South-Western, a part of Cengage Learning

28. Judicial Review- Questions Judicial deference to agency rationale – Superior agency expertise – Review may destroy value of more efficient administrative process – Inroad on already crowded court calendar Broad questions of review – Scope of the courts’ reviewing power – Standing to sue – Exhaustion of administrative remedies – still a valid requirement? – Is a review available in a given case? © 2012 South-Western, a part of Cengage Learning

29. Defenses to Agency Action Agency exceeded statutory authority Agency improperly interpreted laws Agency violated a constitutional provision Agency acted in violation of procedural requirements Agency acted arbitrarily or capriciously, or abused its discretion The Agency’s conclusion was not supported by substantial evidence. © 2012 South-Western, a part of Cengage Learning

30. Your take-away from today’s class © 2012 South-Western, a part of Cengage Learning