76 terms

Business Law Ch6

Administrative Agencies
What is an Administrative Agency?
A government body charged with administering and implementing legislation.
What could an agency be?
A department, independent establishment, administration, authority, board, or bureau
At what levels do agencies exist?
Federal and State
What is the purpose of Federal Administrative Agencies?
They are created to carry out general policies specified by Congress
What is Administrative Law?
Law governing administrative agencies
What are some Federal Agencies?
Securities Exchange Commission (SEC), Consumer Product Safety Commission (CPSC), Federal Drug Administration (FDA)
What is the purpose of State Administrative Agencies?
They have jurisdiction over areas of law affecting business, such as workers' compensation claims, real estate licensing, and unemployment compensation
What are the branches of Administrative Agencies (both federal and state)?
Legislative, Executive and Judicial
How are members of the Administrative Agencies appointed?
Appointed by the president with the consent of Congress
What do these Agencies do?
Make rules, conduct inspections to see that the rules have been or are being obeyed, and sit in judgment to determine whether there have been violations of their rules
What are the 3 ways the public has ready access to the activity of Administrative Agencies?
Open Records, Open Meetings, and Public Announcement of agency guidelines
What is the Administrative Procedural Act (APA)?
Actions and activities of most federal agencies that are not otherwise regulated; federal law that establishes the operating rules for administrative agencies
What is the Freedom of Information Act (FOIA)?
Federal law permitting citizens to request documents and records from administrative agencies --- and unless an exemption is clearly given, the info in question is subject to public inspection
What is the purpose of the FOIA?
To ensure that government activities be opened to the sharp eye of public scrutiny
What makes records exempt from public scrutiny?
Invasion of Privacy
What is the burden upon those who claim there is an exemption from public scrutiny?
They have to prove that the exemption applies to that particular request
What are the kinds of exemptions from public scrutiny?
Commercial or Financial Information not ordinarily made public by the person or company that supplies the info to the agency as part of the agency's enforcement role.
What is the purpose of these exemptions from public scrutiny?
To prevent individuals and companies from obtaining info that is not necessary to their legitimate interests and might harm the person or company whose information is sought.
What is the Sunshine Act of 1976 or the Open Meeting Law?
Law that requires advance notice of agency meeting and public access; requires that most meetings of major administrative agencies to be open to the public
What is the object of having open meetings?
To enable the public to know what actions agencies are taking and to prevent administrative misconduct by having open meetings and public scrutiny.
What meetings do the Sunshine Act/Open Meeting Law apply to?
Ones that involve "deliberations" of the agency or those that "result in the joint conduct or disposition of official agency business
What does the APA require of Administrative Agencies to inform the public of the way they operate?
It requires that each agency publish the rules, principles, and procedures that it follows
What legislative powers do agencies have?
They have the power to make laws and do so by promulgating regulations with public input
Within what boundaries can an agency adopt regulations?
With the scope of it's authority in the statute that created it or assigned a responsibility to it
What is required for an agency to have the power to carry out a congressional program?
The formulation of policy and the making of rules to fill any gap left by Congress
What gives an agency the power to make regulations?
Congressional enactment (statute)
What can regulations adopted by an agency do?
Interpret or clarify the law
In what situations are the matters left up agency's discretion?
When lawmakers intentionally leave the matters for them, or when the problem had been unforeseen
What is the Congressional Enabling Act?
Before an agency can begin rulemaking proceedings, it must be given jurisdiction by congressional enactment in the form of a statute
What can an agency do after jurisdiction is established?
Research a problem or issue; determine the cost and benefit of the problems; identify issues and solutions
By whom can the research be done?
The agency or someone else who is hired by the agency
What is done following the study?
The agency proposes regulations which must be published
What is the Federal Publicity Act and what is it's purpose?
It provides that proposed administrative regulation be published in the Federal Register; it's purpose is to provide publicity for all regulations
What is the Federal Register?
A government publication published five days a week that lists all administrative regulations, all presidential proclamations and executive orders, and other documents and classes of documents that the president or congress directs to be published
What is the Federal Register Act?
It provides that an administrative regulation in the federal register is public notice of the contents of the regulation to persons subject to it or affected by it
What is the Regulatory Flexibility Act?
(passed during Reagan Administration) In addition to the Federal Register Act, it is required that all proposed rules be published in the trade journals of those trades that will be affected by the proposed rules
What must the agency also include in addition to the public notice of the proposed rule?
A "regulatory flexibility analysis" that describes the impact of the proposed rule on small entities
What was the APA's goal in requiring the Regulatory Flexibility Act and the "Regulatory Flexibility Analysis"?
To be certain that small businesses were aware of proposed regulatory rules and their cost impact
What follows the publication of the proposed rules?
The public has the opportunity to provide input on the proposed rules
What is the Public Comment Period?
A period of 30 days in which the public can respond to proposed regulations (with certain emergency exceptions) which can consist of letters written by those affected
What follows the public's response?
An agency can decide to pass (promulgate), withdraw, or modify the rule based on comments
What Executive Power does an Administrative Agency have?
The power to execute the law and to bring proceedings against violators
What does the Executive Power of an Agency generally entail?
The power to investigate, to require persons as witnesses, to require witnesses to produce relevant papers and records or to bring proceedings against those who violate the law
What are agencies allowed to issue for the necessity of an investigation and what is the purpose of issuing one?
A subpoena - to obtain information reasonably required for by the investigation
What are Administrative Agencies subjected to regardless of their broad enforcement authority?
The constitutional protections afforded to individuals and businesses
A person has the same protection against what by an administrative officer as by a police officer.
Unreasonable Searches and Seizures
When is a warrantless search acceptable for Administrative Agencies?
When the danger of concealment is great, a warrantless search can be made of the premises of a highly regulated business, such as one selling liquor or firearms or when violation of the law is dangerous to health and safety
When is a search warrant never required?
When the subject matter can be seen from a public place (seen through an open window, or seen from helicopters or airplanes)
What are the terms for unreasonable searches and seizures in the production of papers?
The constitutional guarantee against unreasonable searches and seizures does not afford much protection for papers and records being investigated by an agency
What can an agency do to insure that a particular person or business is obeying the law
including an agency's regulations and orders?, An agency may require proof of compliance
What can constitute as proof of compliance?
Examination of either a building or a plant, or of witnesses or documents
What are the Judicial Powers of an Administrative Agency?
Once the investigation of an agency reveals a potential violation of law, an agency conducts hearings on violations
What do the judicial powers of an administrative agency generally entail?
An agency, although not a court by law, may be given power to sit as a court and to determine whether any violations of the law or of agency regulations have occurred
Who may file a written complaint alleging some violation of law or regulation that is within the agency's jurisdiction?
A Private Individual, company or an agency
After the complaint is served on the company or individual named in the complaint
what can the accused do?, They have the opportunity to file an answer on the allegations
After the complaint is addressed
what does the agency do?, Has a hearing, makes a decision and enters an order either dismissing the complaint or directing remedies or resolutions
What must an agency do in handling complaints in order to satisfy the requirements of due process?
They must give notice and hold a hearing at which all persons affected may be present
What are the significant differences between an agency hearing and a court hearing?
There is no right of trial by jury before an agency; an agency hearing is ordinarily not subject to the rules of evidence; an agency may be authorized to make an initial determination without holding a hearing (if challenged, agency holds a hearing);
When is an agency required to hold a hearing?
for certain positions, mainly those concerning an individual as opposed to a group, an agency must give a hearing before making a decision
What are Informal Settlements or Consent Decrees?
Practical devices to cut across the procedures already outlined; Informal Settlements: negotiated disposition of a matter before an administrative agency, generally without public sanctions; Consent Decrees: informal settlements of enforcement actions brought by agencies
What happens with Informal Settlements/Consent Decrees in most instances?
An alleged wrongdoer informally notified that a complaint has been made is willing to change
What does an agency usually do after making a decision?
Files an opinion that sets forth the findings of facts and reasons on which the decision is based
Why should an agency always file these opinions?
So that the parties and the court (in the event of an appeal) will understand the agency's action and reasoning
What punishment and enforcement powers do agencies have involving penalties?
Agencies have the power to impose penalties and to issue orders that are binding on a regulated party unless an appeal is taken to court which reverses the administrative decision
What is the cease-and-desist order?
Order issued by a court or agency to stop a practice that it decides is improper
What is the exhaustion of administrative remedy?
Requirement that an agency make its final decision before the parties can go to court; no appeal is possible until the agency has acted on the party's matter before it.
What are the exceptions to the exhaustion of administrative remedies requirement?
Available remedies that provide no genuine opportunity for adequate relief; Irreparable injury that could occur if immediate judicial relief is not provided; an appeal to the agency that would be useless; a substantial constitutional question that the plaintiff has raised
How would procedural issues affect a court appeal?
If a decision of an agency is made without following their procedures specified by law then the decision will be set aside and the matter will be sent back to the agency to proceed according to the required law
How would a question of Law affect a court appeal?
When a decision an agency makes is a question of law, the court on appeal will reverse the agency if the court disagrees with the legal interpretation
How would a question of fact or a mixed question of law and fact affect a court appeal?
In such cases, a court accepts an agency's conclusion if it is supported by substantial evidence; so long as reasonable minds could reach the same conclusions after considering all evidence
What would the court not do when there is a question of fact?
Reverse the decision merely because the court would have made a different decision
How would a question of whether an administrative action is in harmony with the policy of the statute creating the agency affect a court appeal?
An appellate court will sustain the administrative action if substantial evidence supports it
What must an agency do when it changes its prior decisions and customary actions and why?
Give reasons; because otherwise a reviewing court cannot tell whether the agency changed its interpretation of the law for a valid reason or has made a mistake
What does the absence of an explanation condemn the decision?
It condemns it arbitrary and requires reversal
How might a decision of an agency cause substantial loss to a business?
By increasing its operating costs or by making a decision that later is shown to be harmful to the economy
Why is it that the agency would not be liable for such loss?
It is not liable when it has acted in good faith in the exercise of discretionary powers