Legal Environment of Business

TOPIC 4: ADMINISTRATIVE LAW - STUDY GUIDE

1. What are Administrative Agencies?

• Authorized by Congress • Develop and implement regulations • Executive Agencies ⁃ Primarily executive functions ⁃ Under the President’s authority. ⁃ Heads of the executive agencies are cabinet members of the President. ⁃ President nominates, Senate approves ⁃ President can remove • Independent Agencies ⁃ Primarily rule-making functions ⁃ Not part of the Executive’s cabinet; ⁃ Congress passes “enabling statute”

• Resource Video: http://thebusinessprofessor.com/what-are-administrative-agencies/

2. What are the functions of agencies?

• “Executive”, “quasi-legislative” and “quasi-judicial” functions. • Quasi-Legislative Functions ⁃ Agencies develop rules and regulations that further the objectives of the statutes. ⁃ Primarily procedural rules ⁃ Unique rule-making process • Quasi-Judicial Functions ⁃ Create tribunals to adjudicate disputes arising under regulations. ⁃ Authorized under Article I or Article II ⁃ Exhaust administrative remedies ⁃ Functions similarly to Art. III courts ⁃ Parties maintain right to Article III trial • Executive Functions ⁃ Enforce regulations they pass. ⁃ Conduct investigations ⁃ Employ administrative courts. ⁃ Creates advisory and education material

• Resource Video: http://thebusinessprofessor.com/function-of-administrative-agencies/

3. What authority exists for creating and vesting authority in administrative agencies?

• Constitution silent • Exist pursuant to Congressional statute - “enabling statutes”. ⁃ Authority of Congress and Executive is inferred. ⁃ Supreme Court has upheld authority of all functions. • Congress has authority to control and limit agency authority. • Resource Video: http://thebusinessprofessor.com/authority-for-administrative-agency-functions/

4. How are administrative agencies organized?

Executive and Quasi-Legislative Staff Members

• Executive Agencies ⁃ Supervision of the President’s cabinet. ⁃ Single individual (Director or Secretary) ⁃ Appoint subordinate officers

• Independent Agencies ⁃ Controlling board or commission ⁃ 5 to 7 members, one is the chair. ⁃ Appoint or elect an executive director for administration

Quasi-Judicial Staff Members

• Fact Finders ⁃ Judges perform the adjudicative fact-finding functions in disputes ⁃ Separate reporting structure from the rest of the agency. ⁃ Immunity from liability for damages based on their decisions.

• Appeals or Request for Review - ⁃ May appeal a decision to an internal board, agency’s governing board, or the cabinet-level official.

• Resource Video: http://thebusinessprofessor.com/how-are-administrative-agencies-organized/

5. How are key agency personnel appointed and removed?

• Appointment of Administrative Agency Officials ⁃ Senate must confirm the nominee. ⁃ Generally serve staggered terms ⁃ Governing board or commission of independent agencies are bipartisan • Removal of Administrative Agency Officials ⁃ President has the authority ⁃ May be limits for independent agencies

• Resource Video: http://thebusinessprofessor.com/appointing-and-removing-agency-personnel/

6. What is the administrative agency process for creating regulations?

• Public Announcement

• Public Comment • Final Rulemaking

• Resource Video: http://thebusinessprofessor.com/process-for-creating-administrative-regulations/

7. What is the judiciary’s authority to review agency rule making?

• Challenge in Art. III court. ⁃ Must be a challenge to agency procedures ⁃ Will not address the wisdom or effectiveness of the rule. • Constitutionality of Authority ⁃ Definiteness ⁃ Limited

• Resource Video: http://thebusinessprofessor.com/authority-to-review-agency-rulemaking/

8. What is the judiciary’s authority to review administrative court decisions?

• Review Under the APA - The Federal Administrative Procedure Act • Standing • Exhaustion of Remedies • Issues of Jurisdiction • Review of Facts - Supported by substantial evidence • Standard of Review (arbitrary & capricious)

• Resource Video: http://thebusinessprofessor.com/authority-to-review-administrative-court- decisions/

• Resource Video: http://thebusinessprofessor.com/review-under-the-federal-arbitration-act/

9. What are the advantages of administrative agencies?

• Exactness • Expertise • Public Protection

• Resource Video: http://thebusinessprofessor.com/advantages-of-administrative-agencies/

10. What are the disadvantages of administrative agencies and regulations?

• Adds a degree of bureaucracy to regulated activities. • Raises the cost of doing business • Resource Video: http://thebusinessprofessor.com/disadvantages-of-administrative-regulations/