Bài giảng Business Law (13th edition) - Chapter 47: Administrative Agencies

Regulation of BusinessAdministrative AgenciesThe Federal Trade Commission Actand Consumer Protection LawsAntitrust: The Sherman Act11McGraw-Hill/Irwin Business Law, 13/e© 2007 The McGraw-Hill Companies, Inc. All rights reserved.Regulation of BusinessThe Clayton Act,The Robinson-Patman Act, andAntitrust Exemptions and ImmunitiesEmployment LawEnvironmental Regulation11McGraw-Hill/Irwin Business Law, 13/e© 2007 The McGraw-Hill Companies, Inc. All rights reserved.Administrative AgenciesPAETRHC47“The execution of the laws is more important than the making of them.” Thomas JeffersonLearning ObjectivesCreation of administrative agenciesAgency types and organizationAgency powers and proceduresControlling administrative agenciesInformation controlsIssues in regulation47 - *The administrative agency, created by enabling legislation, implements and enforces statutes enacted by CongressHas legislative, executive, judicial functionsFederal and state agencies must operate within the constitutional guarantees of due process, equal protection, and freedom of speechSee Pearson v. ShalalaOverview47 - *Two types of federal administrative agencies: Executive: within Office of President or executive departments of president’s cabinetAdministrative heads appointed and removable at President’s willIndependent: still executive in function, but headed by board or commission whose members are appointed by President “with the advice and consent of the Senate”Agency Types47 - *Basic discretionary powers: rulemaking power, investigative power, and adjudicatory powerAgency also has significant informal power through agency advice, suggestions, guidelinesLack legal force of formal agency regulations or rulings, but very persuasive in shaping behavior of regulated industriesAgency Powers47 - *Agency rulemaking power derives from enabling legislation and must comply with Administrative Procedure Act (APA) Informal rulemaking (notice and comment) is most common method and the process is:Publication of Notice of Proposed Rulemaking in Federal Register, comment period, publication in Federal Register of regulation (after review of comments) in final formRulemaking Power47 - *Formal rulemaking also begins with a Notice of Proposed Rulemaking published in Federal Register, but unlike informal rulemaking, the formal notice must state time and place at which a public hearing will be heldHearings resemble trials: agency must produce evidence and justify proposed regulation; interested parties may present evidence in oppositionRulemaking Power47 - *Agencies need accurate information about business activities for rules and enforcementAgency investigations must be authorized by law and conducted for a legitimate purposeTwo most important investigative tools are subpoenas and searches and seizuresSubpoena duces tecum (compels documents)Subpoena ad testificandum (compels testimony)Investigative Power47 - *Agency may seek information only available by entry upon private property Fourth Amendment prohibits unreasonable search and seizure and requires a warrant based on probable causeTypically, no warrant required for routine administrative inspectionsInvestigative Power: Search & Seizure47 - *Agencies conduct judicial hearings to decide whether a regulation has been violatedIn a hearing before an administrative law judge (ALJ), testimony and evidence are allowed, but no jury is presentALJ issues decision with findings of fact and conclusions of law and penalty if requiredALJ decision may be appealedAdjudicatory Power47 - *Executive shapes agencies by President’s: (a) power to appoint/remove administrators, (b) power to veto legislation about agencies, (c) influence over executive budgetCongress shapes agency action by its: (a) advice and consent role in agency appointments, (b) power to amend enabling legislation , (c) power to pass laws changing agency proceduresControl of Agencies47 - *Courts arguably exercise greatest control over agency behavior since APA allows judicial review of most agency actionIndividual or organization seeking judicial review must demonstrate that the:Agency action being challenged is reviewable, challenging party has standing to sue, all required administrative remedies exhausted, and dispute ripe for judicial reviewJudicial Review of Agencies47 - *Legal bases for challenging agency action:Ultra vires doctrine Agency deviated from necessary proceduresAgency action was unconstitutional Agency action unsubstantiated by factsJudicial deference: if question of fact or policy is at issue in the case, courts generally defer to agency decisionChallenging Agency Action47 - *Three statutes regulate flow of information held or gathered by administrative agenciesFreedom of Information Act (FOIA): enables citizens to access government documentsPrivacy Act of 1974: citizens may inspect files agencies have on them and request correctionsGovernment in the Sunshine Act of 1976: “every meeting of an agency shall be open to public observation”Information Controls47 - *Test Your KnowledgeTrue=A, False = BAgencies are created by Congress through enabling legislation.Federal Procedure Act constrains agencies.An agency subpoena may request information that is privileged as long as it is necessary to the investigation.An Administrative Law Judge’s opinion may not be appealed. 47 - *Test Your KnowledgeTrue=A, False = BInformal rulemaking is also known as notice and comment rulemaking.Under the Freedom of Information Act, the plaintiff/requester bears the burden of proving the denial was wrongful.If an agency decision is challenged, courts generally defer to the agency decision.47 - *Test Your KnowledgeMultiple ChoiceThe basic discretionary powers agencies may possess are: (a) Rulemaking power(b) Investigative power (c) Adjudicatory power (d) All of the above(e) A and B only47 - *Test Your KnowledgeMultiple Choice Which of the following is not a legal basis for challenging agency action? (a) Ultra vires doctrine(b) Agency failed to obtain advice and consent(c) Agency action was unconstitutional(d) Agency failed to comply with the APA(e) None of the above47 - *Test Your KnowledgeMultiple Choice An individual or organization seeking review of an agency action must show: (a) The challenged agency action is reviewable(b) Challenging party has standing to sue(c) All required administrative remedies have been exhausted(d) The dispute is ripe for judicial review(e) All of the above47 - *Thought QuestionsDo you think that federal agencies have enough power to do all they are expected to do or too much power? What ethical issues might arise for a business that receives a subpoena or warrant from an administrative agency? 47 - *