Chapter 18

Administrative Law

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Definition, Function and Sources of Administrative Law

• Administrative law is the body of law, drawn from various sources, that defines and regulates federal regulatory agencies and limits the exercise of authority by these agencies.

• Federal regulatory agencies are bodies that function within a particular executive branch department (such as the IRS functioning within the Department of the Treasury).

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Primary Functions of Administrative Agencies

• Administrative agencies have a wide range of functions related to:– formation, – implementation, and – enforcement of regulations.

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Policymaking

• Administrative agencies are charged by Congress to study potential solutions to a problem and then to exercise a legislative function by creating legally enforceable rules, known as administrative regulations, that purport to satisfy Congress’s will by filling in the details of the statute.

• This policymaking function is known as rulemaking.

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Investigation and Enforcement

• Responsibilities include:

– investigating alleged violations of the agency’s administrative regulations, and

– recommending enforcement actions such as fines and other sanctions.

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Licensing and Permitting

• Examples include the Securities and Exchange Commission issuing licenses to certain individuals involved in public trading of stocks, or the Federal Communications Commission’s licensing of television and radio stations.

• Agencies also issue permits such as those issued by the Environmental Protection Agency to control air and water pollution.

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Sources of Administrative Law

• U.S. Constitution

• Administrative Procedures Act (APA)

• Enabling Statutes

• Common Law

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Rulemaking

• The rulemaking process is set out in the APA and is supplemented by the enabling statutes passed by Congress.

• In practice, much of an agency’s rulemaking duties are carried out through informal rulemaking procedures that are permitted under the basic structure of the APA.

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Enforcement, Licensing, and Inspection

• Enforcement: the U.S. Supreme Court has ruled that agencies have broad discretion in when and whom to regulate.

• Administrative agencies also regulate and administer laws through licensing.

• Some agencies also monitor compliance with administrative regulations by conducting inspections of businesses and individuals within their jurisdiction.

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Adjudication

• Adjudication: hearing where government and the private party each presents evidence in a quasi-judicial setting

• In most agencies, the presiding officer is an administrative law judge (ALJ) who is typically an attorney employed by the agency to adjudicate disputes.

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Appeals

The losing party in an ALJ case generally has an automatic appeal to the administrative head of the agency who may overturn or affirm the ALJ’s ruling.

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Limits on Administrative Agencies

The legislative, executive, and judicial branches all have various means of power that limit the authority of administrative agencies.

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Executive Branch

• Appointments Clause

• Direct Power

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Congress

• Congress may exercise their constitutionally granted power of the purse over government funding of particular agencies, or

• Enact legislation that restricts an agency’s authority, or pass a new law to overrule an administrative regulation.

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Judicial Review

• Statutory Interpretation by Agencies

• Applying the Arbitrary and Capricious Standard