11e-Ch15s
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Transcript of 11e-Ch15s
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THE REGULATORY PROCESS
Chapter 15
The rise of the administration bodies
probably has been the most significantlegal trend of the last century and
perhaps more values today are affected
by their decisions than by those of all
the courts . . . .They have become a
veritable fourth branch of the
government. . . . Supreme Court in F.T.C.
v. Ruberoid Company(1952)
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The Rise of
Administrative Agencies
The first federal agency: The Interstate Commerce
Commission (ICC,1887)
Early 1900s: The Federal Trade Commission (FTC) and the
Food and Drug Administration (FDA)
1930s: Securities & Exchange Commission (SEC) and Federal
Communications Commission (FCC)
1960s & 1970s: Environmental Protection Agency (EPA), Equal
Employment Opportunity Commission (EEOC), and
Occupational Safety & Health Administration (OSHA)
Agencies: Tools for local, state & federal regulatory functions
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Creating An Administrative Agency
Congress gives an agency power &
authority through legislative
delegation
Congress delegates powerto the
agency to perform the regulatory
purpose
Congressional statute delegates
powers anenabling statute
Agencies are created to have
expertise and supervision over
special problems about which
Congress is concerned
If voters unhappy with regulations,
the can pressure representatives in
Congress to make changes
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Administrative Law
Administrative law consists of legal rules that define
authority & structure of an agency
Sources include
Enabling statutes of administrative agencies
Administrative Procedures Act (APA, 1946)
Rules issued by administrative agencies
Court decisions Review validity of agency actions The structure of administrative law created by the APA
An agency must abide by APA requirements
Congress may impose different requirements than APA
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ADMINISTRATIVE REGULATORY
POWERS
Legislative (or Rulemaking)
Investigative
Adjudicatory
Enforcement Part of the powers of all
three branches of
government are
incorporated into anagency
See Exhibit 15.2
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Rule Making Formal rulesand regulat ions
Informal pol icy guidance documents
Substantive or Legislative
Same force as statutes of Congress
Agency usually must give public notice of these rules so parties
have opportunity for written comment
Interpretative
Issued by an agency to give guidance regarding interpretation of
a substantive rule or statute
May be created without public notice
Procedural
Rules outline the method of agency operation
Procedures for enforcement, investigation & adjudicatory review
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Rulemaking Procedure
Proposed rule drafted by the agency staff
Internal review of proposed rule
Rules approved by the head of the agency for public consideration
Publishing of the proposed rules in the Federal Register
Interested parties may submit written comments to agency After public comment period (60-90 days), agency reviews comments
and finalizes the rule
Some statutes require rulemaking must be on the record. Agency
must hold hearings for witnesses to testify about proposed rule.
Once agency issues final rule, it may be appealed through agency, thento the U.S. Court of Appeals
Courts uphold rules if reasonable given language of authorizing statute
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Chevron , USA v. Natu ral
Resources Defense Counc i l
The Clean Air Act requires states with nonattainment (dirty air)
areas to create permit program
Program regulates new or modified major stationary sources of
air pollution
EPA regs. state a plant with multiple sources of pollution aretreated as one source of pollution
The Bubble Concept as if multiple sources are under bubble
The whole bubble is measured (rather than each source)
National Resources Defense Council (NRDC) challenged EPAs
Bubble Rule
Said rule was inconsistent with Clean Air Act
Court of Appeals overturned the EPA regulation
Decision was appealed
Continued
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Chevron , USA v. Natural Resources
Defense Counci l , cont.
HELD: Reversed. Regulation is appropriate. Two questions asked:
1. Has Congress directly spoken to the precise question at issue?
2. If statute is silent or ambiguous re: an issue, was the agencys
answer based on permissible construction of the statute?
Agencies allowed to fill gaps left by Congress Unless agency decisions are arbitrary, capricious or manifestly
contrary to statute, regulations given controlling weight
Legislative delegation may be implicit or explicit often implicit
Court usually defers to administrative interpretations
Question is not whether the bubble concept is inappropriate
Question is if Administrators view is appropriate and reasonable
regarding the Bubble Program
EPAs use of the concept is reasonable policy for it to make.
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Enforcing Rules
Gathering information and investigating violations
Broad investigative powers of agencies by:
Monitoring and self reporting by business
Business is concerned with 5th Amendmentviolations re: self incrimination
Direct observation by agency
See Dow Chem ical v. U.S. (within text)
Agency obtains information through subpoena power Directs person receiving subpoena to appear and
testify or to produce documents
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General Principles of 4th Amendment Search &
Seizure Guidelines of Administrative Agencies
Need WarrantRoutineinspections
No WarrantOpen fieldobservation
No Warrant Consent bymanagement for agency tolook over or search thepremises
No Warrant Closelyregulated industries, i.e.
Pharmaceuticals industry
Nuclear facility
Even junk yards (ifprotection of evidence
needed)
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Enforcement Power
Agencies have array of enforcement tools in civil and criminalpenalties, plus the use of injunctions
Possible sanctions:
Prohibitions, requirements, limitations
Withholding of relief; penalties & fines
Destruction, taking, seizing, withholding of property
Assessment of damages, reimbursements, restitution,
compensation, costs, charges or fees
Requirement, revocation, suspension of license
Informal procedures (i.e. tests, inspections, permits,negotiations, advice, settlements)
Formal procedures (i.e. adjudicatory hearings that may lead
to litigation)
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Adjudicatory Hearing
Formal agency process under APA rules Similar to those followed in a trial
Business must respond to complaint that alleges
violation of agency regulation
Adm inistrat ive Law Judge (ALJ)presides ALJ is a civil service employee who is usually an
attorney
Witnesses may be cross examined
Less formal than a court trial
Hearing must meet due process guarantees of the
Constitution
There is no right to trial by jury
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Judicial Review
APA sets out procedural requirements for court review Jurisdiction is needed by the court to hear the case
Action must be reviewable by the courts (review may be
prohibited by statute, i.e. VA actions regarding benefits for
veterans, dependents or survivors) Party must have standing to seek court review of an
agency action
See Lu jan v. Defenders o f Wildl i fe(within text)
The agency action must be final to warrant judicial reviewunder the ripeness doctrine
Parties must complete all agency appeals before turning
to the courts under the exhaustion doctrine
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Reviewability
Review of substantive determination
Courts usually yield to agencys
judgment unless decisions are
arbitrary, capricious, or an abuse
of discretion or rulemaking is
vague or unduly burdensome on
business
Review prohibited by Statute
Congress may specify in the
statute which court has
jurisdiction for review
Can prohibit certain judicial
review
Review of statutory
interpretation
Courts determine if the
agency has gone beyond
Congressional authority
Review of procedural
requirements
Courts ensure an agency
has not acted unfairly or
disregarded procedures(has not violated
procedural fair play)
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CONTROLS ON AGENCY POWERS
Direct Controls
Congressional budget process
Agency Appropriations & Reporting Requirements
Cost-Benefit and Risk Analysis
Example: Office of Management and Budget may sendproposed regulation back to agency if scientific, technicaland economic information standards are not met
Presidential Executive Orders instructing tasks tobe undertaken by agencies
Example: Pres. Johnsons order to agencies re: affirmativeaction programs
Indirect Controls
Freedom of Information Act
Privacy Act
Government in the Sunshine Act