© 2004 West Legal Studies in Business

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Chapter 6Chapter 6Administrative LawAdministrative Law

Chapter 6Chapter 6Administrative LawAdministrative Law


IntroductionIntroductionIntroductionIntroduction

Administrative Law is the rules, orders, and Administrative Law is the rules, orders, and decisions of federal, state, and local decisions of federal, state, and local government agencies established to perform a government agencies established to perform a specific function.specific function.

Administrative Law is the rules, orders, and Administrative Law is the rules, orders, and decisions of federal, state, and local decisions of federal, state, and local government agencies established to perform a government agencies established to perform a specific function.specific function.


§ 1: § 1: Agency Creation and PowersAgency Creation and Powers§ 1: § 1: Agency Creation and PowersAgency Creation and Powers

The study of Administrative Law requires an The study of Administrative Law requires an understanding of:understanding of: Enabling Legislation.Enabling Legislation. The Types of Agencies.The Types of Agencies. Agency Powers and the Constitution.Agency Powers and the Constitution.

The study of Administrative Law requires an The study of Administrative Law requires an understanding of:understanding of: Enabling Legislation.Enabling Legislation. The Types of Agencies.The Types of Agencies. Agency Powers and the Constitution.Agency Powers and the Constitution.


Enabling LegislationEnabling LegislationEnabling LegislationEnabling Legislation

Enabling legislation is a law passed by Congress Enabling legislation is a law passed by Congress to specify the name, purposes, functions, and to specify the name, purposes, functions, and powers of administrative agency.powers of administrative agency.

Federal administrative agencies may exercise Federal administrative agencies may exercise only those powers that Congress has delegated only those powers that Congress has delegated to them in enabling legislation.to them in enabling legislation.

Through similar enabling acts, state legislatures Through similar enabling acts, state legislatures create state administrative agencies.create state administrative agencies.

Enabling legislation is a law passed by Congress Enabling legislation is a law passed by Congress to specify the name, purposes, functions, and to specify the name, purposes, functions, and powers of administrative agency.powers of administrative agency.

Federal administrative agencies may exercise Federal administrative agencies may exercise only those powers that Congress has delegated only those powers that Congress has delegated to them in enabling legislation.to them in enabling legislation.

Through similar enabling acts, state legislatures Through similar enabling acts, state legislatures create state administrative agencies.create state administrative agencies.


Types of AgenciesTypes of AgenciesTypes of AgenciesTypes of Agencies

There are two basic types of administrative There are two basic types of administrative agencies:agencies: Executive Agencies.Executive Agencies.

» Cabinet-level departments of the Executive Branch and Cabinet-level departments of the Executive Branch and their sub-departments.their sub-departments.

Independent Regulatory Agencies.Independent Regulatory Agencies.» Agencies outside the major executive departments such Agencies outside the major executive departments such

as the Federal Aviation Administration or the Federal as the Federal Aviation Administration or the Federal Communications Commission. Communications Commission.

There are two basic types of administrative There are two basic types of administrative agencies:agencies: Executive Agencies.Executive Agencies.

» Cabinet-level departments of the Executive Branch and Cabinet-level departments of the Executive Branch and their sub-departments.their sub-departments.

Independent Regulatory Agencies.Independent Regulatory Agencies.» Agencies outside the major executive departments such Agencies outside the major executive departments such

as the Federal Aviation Administration or the Federal as the Federal Aviation Administration or the Federal Communications Commission. Communications Commission.


Agency Powers and the ConstitutionAgency Powers and the ConstitutionAgency Powers and the ConstitutionAgency Powers and the Constitution

Administrative agencies make legislative rules, Administrative agencies make legislative rules, or substantive rules, that are as legally binding or substantive rules, that are as legally binding as laws that Congress passed.as laws that Congress passed.

Administrative agencies are sometimes referred Administrative agencies are sometimes referred to as the “fourth branch” of the U.S. to as the “fourth branch” of the U.S. government.government.

Article I of the U.S. Constitution authorizes Article I of the U.S. Constitution authorizes delegating such powers to administrative delegating such powers to administrative agencies.agencies.

Administrative agencies make legislative rules, Administrative agencies make legislative rules, or substantive rules, that are as legally binding or substantive rules, that are as legally binding as laws that Congress passed.as laws that Congress passed.

Administrative agencies are sometimes referred Administrative agencies are sometimes referred to as the “fourth branch” of the U.S. to as the “fourth branch” of the U.S. government.government.

Article I of the U.S. Constitution authorizes Article I of the U.S. Constitution authorizes delegating such powers to administrative delegating such powers to administrative agencies.agencies.


§ 2: § 2: Administrative ProcessAdministrative Process§ 2: § 2: Administrative ProcessAdministrative Process

Administrative process include three functions:Administrative process include three functions: Rulemaking.Rulemaking. Investigation.Investigation. Adjudication.Adjudication.


RulemakingRulemakingRulemakingRulemaking

Rulemaking is the formulation of new Rulemaking is the formulation of new regulation.regulation.

Notice and Comment Rulemaking involves Notice and Comment Rulemaking involves three steps:three steps: Notice of the proposed rulemaking (NPRM).Notice of the proposed rulemaking (NPRM). Comment Period.Comment Period. The Final Rule.The Final Rule.

Case 6.1Case 6.1: : AT&T Corp. v. Iowa Utilities Board AT&T Corp. v. Iowa Utilities Board (1999).(1999).

Rulemaking is the formulation of new Rulemaking is the formulation of new regulation.regulation.

Notice and Comment Rulemaking involves Notice and Comment Rulemaking involves three steps:three steps: Notice of the proposed rulemaking (NPRM).Notice of the proposed rulemaking (NPRM). Comment Period.Comment Period. The Final Rule.The Final Rule.

Case 6.1Case 6.1: : AT&T Corp. v. Iowa Utilities Board AT&T Corp. v. Iowa Utilities Board (1999).(1999).


InvestigationInvestigationInvestigationInvestigation

The purpose of investigations is to ensure that the rule The purpose of investigations is to ensure that the rule issued is based on a consideration of relevant factors issued is based on a consideration of relevant factors rather than being arbitrary and capricious, which rather than being arbitrary and capricious, which include the powers to:include the powers to: Conduct Inspection.Conduct Inspection. Issue Subpoenas.Issue Subpoenas.

» Subpoenas Subpoenas duces tecumduces tecum requires production of requires production of documents.documents.

» Subpoenas Subpoenas ad testificandumad testificandum requires testimony. requires testimony.

Case 6.2:Case 6.2: FTC v. Ken Roberts Co.FTC v. Ken Roberts Co. (2001). (2001).

The purpose of investigations is to ensure that the rule The purpose of investigations is to ensure that the rule issued is based on a consideration of relevant factors issued is based on a consideration of relevant factors rather than being arbitrary and capricious, which rather than being arbitrary and capricious, which include the powers to:include the powers to: Conduct Inspection.Conduct Inspection. Issue Subpoenas.Issue Subpoenas.

» Subpoenas Subpoenas duces tecumduces tecum requires production of requires production of documents.documents.

» Subpoenas Subpoenas ad testificandumad testificandum requires testimony. requires testimony.

Case 6.2:Case 6.2: FTC v. Ken Roberts Co.FTC v. Ken Roberts Co. (2001). (2001).


AdjudicationAdjudicationAdjudicationAdjudication

The law provides a mechanism for The law provides a mechanism for administrative adjudication of suspected rule administrative adjudication of suspected rule violations: violations: Negotiate settlements.Negotiate settlements. Formal Complaints.Formal Complaints. Hearing before Administrative Law Judge.Hearing before Administrative Law Judge. Agency Orders.Agency Orders.

The law provides a mechanism for The law provides a mechanism for administrative adjudication of suspected rule administrative adjudication of suspected rule violations: violations: Negotiate settlements.Negotiate settlements. Formal Complaints.Formal Complaints. Hearing before Administrative Law Judge.Hearing before Administrative Law Judge. Agency Orders.Agency Orders.


§ 3: § 3: Limitations on Agency PowersLimitations on Agency Powers§ 3: § 3: Limitations on Agency PowersLimitations on Agency Powers

All three constitutionally created branches All three constitutionally created branches of government have some measure of of government have some measure of control over administrative agencies.control over administrative agencies.

All three constitutionally created branches All three constitutionally created branches of government have some measure of of government have some measure of control over administrative agencies.control over administrative agencies.


Judicial ControlsJudicial ControlsJudicial ControlsJudicial Controls

The Administrative Procedures Act provides for The Administrative Procedures Act provides for judicial review of most agency actions.judicial review of most agency actions.

A party seeking review must demonstrate A party seeking review must demonstrate standing to suestanding to sue, there must be , there must be actual controversyactual controversy at issue, and have exhausted at issue, and have exhausted all possible all possible administrative remedies.administrative remedies.

Judicial review of agency action will frequently Judicial review of agency action will frequently address whether the agency has acted beyond its address whether the agency has acted beyond its authority or failed to discharge its responsibility.authority or failed to discharge its responsibility.

The Administrative Procedures Act provides for The Administrative Procedures Act provides for judicial review of most agency actions.judicial review of most agency actions.

A party seeking review must demonstrate A party seeking review must demonstrate standing to suestanding to sue, there must be , there must be actual controversyactual controversy at issue, and have exhausted at issue, and have exhausted all possible all possible administrative remedies.administrative remedies.

Judicial review of agency action will frequently Judicial review of agency action will frequently address whether the agency has acted beyond its address whether the agency has acted beyond its authority or failed to discharge its responsibility.authority or failed to discharge its responsibility.


Executive ControlsExecutive ControlsExecutive ControlsExecutive Controls

Executive branch of government exercises Executive branch of government exercises control over agencies through:control over agencies through: President power to appoint federal officers, President power to appoint federal officers, andand President’s veto power.President’s veto power.

Executive branch of government exercises Executive branch of government exercises control over agencies through:control over agencies through: President power to appoint federal officers, President power to appoint federal officers, andand President’s veto power.President’s veto power.


Legislative ControlsLegislative ControlsLegislative ControlsLegislative Controls

The Congress exercises controls over agencies The Congress exercises controls over agencies powers by:powers by: Enacting and changing enabling legislation.Enacting and changing enabling legislation. Determining funding for the agency.Determining funding for the agency. Investigating agency actions.Investigating agency actions. Freezing agency enforcement efforts before they Freezing agency enforcement efforts before they

take effect.take effect. Amending the Administrative Procedures Act.Amending the Administrative Procedures Act.

The Congress exercises controls over agencies The Congress exercises controls over agencies powers by:powers by: Enacting and changing enabling legislation.Enacting and changing enabling legislation. Determining funding for the agency.Determining funding for the agency. Investigating agency actions.Investigating agency actions. Freezing agency enforcement efforts before they Freezing agency enforcement efforts before they

take effect.take effect. Amending the Administrative Procedures Act.Amending the Administrative Procedures Act.


§ 4: § 4: Public AccountabilityPublic Accountability§ 4: § 4: Public AccountabilityPublic Accountability

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

Act.Act.

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

Act.Act.


Freedom of Information ActFreedom of Information ActFreedom of Information ActFreedom of Information Act

This legislation requires the federal government This legislation requires the federal government to disclose certain “records” to “any person” on to disclose certain “records” to “any person” on request, even if no reason is given for the request, even if no reason is given for the request.request.

All federal government agencies are required to All federal government agencies are required to make their records available electronically.make their records available electronically.

This legislation requires the federal government This legislation requires the federal government to disclose certain “records” to “any person” on to disclose certain “records” to “any person” on request, even if no reason is given for the request, even if no reason is given for the request.request.

All federal government agencies are required to All federal government agencies are required to make their records available electronically.make their records available electronically.


Government-In-The-Sunshine ActGovernment-In-The-Sunshine ActGovernment-In-The-Sunshine ActGovernment-In-The-Sunshine Act

The legislation requires that “every portion of The legislation requires that “every portion of every meeting of an agency” be open to “public every meeting of an agency” be open to “public observation.”observation.”

Adequate notice of meetings must be given to Adequate notice of meetings must be given to the public.the public.

Closed meetings are authorized in a limited Closed meetings are authorized in a limited number of instances.number of instances.

The legislation requires that “every portion of The legislation requires that “every portion of every meeting of an agency” be open to “public every meeting of an agency” be open to “public observation.”observation.”

Adequate notice of meetings must be given to Adequate notice of meetings must be given to the public.the public.

Closed meetings are authorized in a limited Closed meetings are authorized in a limited number of instances.number of instances.


Regulatory Flexibility ActRegulatory Flexibility ActRegulatory Flexibility ActRegulatory Flexibility Act

Concern over the effects of regulation on the Concern over the effects of regulation on the efficiency of businesses, Congress passed the efficiency of businesses, Congress passed the Regulatory Flexibility Act which requires an Regulatory Flexibility Act which requires an analysis of the cost a regulation will impose on analysis of the cost a regulation will impose on small business and must consider less small business and must consider less burdensome alternatives. burdensome alternatives.

Concern over the effects of regulation on the Concern over the effects of regulation on the efficiency of businesses, Congress passed the efficiency of businesses, Congress passed the Regulatory Flexibility Act which requires an Regulatory Flexibility Act which requires an analysis of the cost a regulation will impose on analysis of the cost a regulation will impose on small business and must consider less small business and must consider less burdensome alternatives. burdensome alternatives.


Small Business Regulatory Small Business Regulatory Enforcement Fairness ActEnforcement Fairness ActSmall Business Regulatory Small Business Regulatory Enforcement Fairness ActEnforcement Fairness Act

This Act allows Congress to review new This Act allows Congress to review new federal regulations for at least sixty-day federal regulations for at least sixty-day before they can take effect.before they can take effect.

This Act allows Congress to review new This Act allows Congress to review new federal regulations for at least sixty-day federal regulations for at least sixty-day before they can take effect.before they can take effect.


§ 5: State Administrative § 5: State Administrative AgenciesAgencies

§ 5: State Administrative § 5: State Administrative AgenciesAgencies

Cooperation and Conflicts between Parallel Cooperation and Conflicts between Parallel Federal and State Agencies.Federal and State Agencies.

Judicial Review of State Agency Actions.Judicial Review of State Agency Actions. Case 6.3:Case 6.3: Swift v. Sublette County Board of County Swift v. Sublette County Board of County

CommissionersCommissioners (2002). (2002).

Cooperation and Conflicts between Parallel Cooperation and Conflicts between Parallel Federal and State Agencies.Federal and State Agencies.

Judicial Review of State Agency Actions.Judicial Review of State Agency Actions. Case 6.3:Case 6.3: Swift v. Sublette County Board of County Swift v. Sublette County Board of County

CommissionersCommissioners (2002). (2002).


Law on the WebLaw on the WebLaw on the WebLaw on the Web

The Administrative Procedures Act (1946).The Administrative Procedures Act (1946).Federal Web LocatorFederal Web Locator..Internet Law Library (CFR).Internet Law Library (CFR).

Legal Research Exercises on the Web.Legal Research Exercises on the Web.

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