Administrative law is created by Administrative law is created by administrative agencies which administrative agencies which regulate many areas of our regulate many areas of our government, community, and government, community, and businesses.businesses.A significant cost of ‘doing business’

requires compliance with administrative and agency laws.

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Administrative Agencies Exist at Administrative Agencies Exist at All Levels of Government.All Levels of Government.

Agencies Provide Agencies Provide Comprehensive Regulatory Comprehensive Regulatory Scheme.Scheme.Many businesses have incentive to

influence the regulatory environment.

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The study of administrative The study of administrative law requires an law requires an understanding of:understanding of:Enabling Legislation. The Types of Agencies. Agency Powers and the

Constitution.

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Federal Trade Commission Federal Trade Commission (FTC) granted power to:(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.

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FTC granted power to (cont’d):FTC granted power to (cont’d):3. To obtain reports from

interstate corporations concerning their business practices.

4. To investigate possible violations of federal antitrust statutes.

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FTC granted power to (cont’d):FTC granted power to (cont’d):5. To publish findings of its

investigations. 6. To recommend new

legislation. 7. To hold trial-like hearings to

resolve disputes.

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There are two basic types of There are two basic types of administrative agencies: administrative agencies: Executive Agencies (e.g., EPA Executive Agencies (e.g., EPA and cabinet level) and and cabinet level) and Independent Regulatory Independent Regulatory Agencies (e.g., Securities Agencies (e.g., Securities Exchange Commission, Internal Exchange Commission, Internal Revenue Service).Revenue Service).

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Agency Powers and the Agency Powers and the Constitution.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. 9

Agency Powers and the Agency Powers and the Constitution.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.

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In the absence of clear In the absence of clear Congressional direction, all Congressional direction, all federal agencies must follow federal agencies must follow APA procedural requirements APA procedural requirements in notice, rulemaking, and in notice, rulemaking, and adjudication. adjudication.

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Arbitrary and Capricious Test: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 6.1 FCC v. Fox Television Studios, Inc. (2009). Are the FCC’s indecency rules too ‘vague’?

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Rulemaking: Rulemaking: formulation of new formulation of new regulation.regulation. Notice and Comment Notice and Comment RulemakingRulemaking involves three steps: involves three steps:Notice of the Proposed

Rulemaking.Comment Period.The Final Rule.

Informal Agency Action: Informal Agency Action: exempt exempt from APA, do not establish legal rights.from APA, do not establish legal rights.

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The Holding of the The Holding of the ChevronChevron Case.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.

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ChevronChevron (cont’d). (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”?

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When Courts Will Give When Courts Will Give Chevron Chevron Deference to Agency Deference to Agency Interpretation.Interpretation.When the meaning of a statute’s

language is unclear, courts must follow agency interpretation if reasonable.

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When Courts Will Give When Courts Will Give Chevron Chevron Deference to Agency Deference to Agency Interpretation.Interpretation.CASE 6.2 Citizens Committee to Save our Canyons v. Krueger (2008). Why did the court uphold the agency’s decision?

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InvestigationInvestigation includes the includes the powers to:powers to:Conduct Inspections.Issue Subpoenas.Conduct Site Inspections (including

warrantless inspections in certain limited situations such as firearms or liquor).

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Adjudication (like a trial Adjudication (like a trial before a judge). before a judge). Negotiated Settlements.Formal Complaints.Role of the Administrative Law

Judge.Hearing Procedures.Agency Orders.

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A number of pieces of legislation A number of pieces of legislation make agencies more accountable make agencies more accountable through public scrutiny.through public scrutiny.Freedom of Information Act. Government in the Sunshine Act. Regulatory Flexibility Act. Small Business Regulatory

Enforcement Fairness Act.

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Freedom of Information Act. Freedom of Information Act. Requires federal government to

disclose records on request, but denial can be challenged in court.

CASE 6.3 United Technologies Corp. v. U.S. Department of Defense (2010). Court ordered a rational connection between facts and choice to deny.

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Government in the Sunshine Government in the Sunshine Act. Act. Requires that “every portion Requires that “every portion of every meeting of an agency” of every meeting of an agency” be open to “public observation.”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.

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Regulatory Flexibility Act. Regulatory Flexibility Act. Requires an analysis of the cost Requires an analysis of the cost a regulation will impose on a regulation will impose on small business and must small business and must consider less burdensome consider less burdensome alternatives. alternatives.

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Small Business Regulatory Small Business Regulatory Enforcement Fairness Act. Enforcement Fairness Act. Allows Congress to review new Allows Congress to review new federal regulations for at least federal regulations for at least sixty-days before they can take sixty-days before they can take effect.effect.

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