BULE
Legal Environment of Business
Administrative Agencies
Professor Alexandria Zylstra
Importance of Administrative Law
Administrative law is created by administrative agencies which regulate many aspects of business.
Administrative agencies are created by the legislative branch via enabling legislation.
Those agencies create rules and regulations, as well as judicial orders and decisions that are binding law.
Administrative agencies have immense authority: rulemaking, enforcement, and adjudication
History
Agency Creation and Powers
Example of Enabling Legislation.
Environmental Protection Agency (EPA) has authority to:
create standards and regulations for the purpose of carrying out 18 federal laws related to the environment
conduct investigations of business practices, both on and off-site.
obtain reports from interstate corporations concerning their business practices.
investigate possible violations of federal environmental laws.
publish findings of its investigations.
recommend new legislation.
hold hearings to resolve disputes.
Agency Creation and Powers
Agency Powers and the Constitution
Constitutional issues:
Delegation doctrine
Legislative Rules passed by Admin Agencies: are legally binding, just as laws passed by Congress.
Executive Controls: Presidential veto over enabling or modification statutes; and appointment powers (as to members of executive agencies – HHS, FDA, etc)
Legislative Controls: can abolish an agency, modify it, or de-fund it; can also investigate and freeze rule enforcement
Judicial Controls:
Exhaustion Doctrine: party seeking court review must first exhaust all administrative remedies before filing suit.
Judicial deference after the Chevron v NRDC (1984) case.
Issue
In Chevron, the EPA interpreted the facts AND the law. Can they do that?
The U.S. Supreme Court held that a federal agency could interpret law when the meaning of a statute’s language is unclear, so long as the interpretation is reasonable.
Administrative Procedure Act – Rulemaking Authority
In the absence of agency-specific Congressional direction, all federal agencies must follow APA procedural requirements in notice, rulemaking, and adjudication.
Rulemaking: formulation of new regulation
Notice and Comment Rulemaking involves three steps:
Notice of the Proposed Rulemaking
Comment Period (usually 30-60 days)
The Final Rule – published in Code of Federal Regulations
APA - Agency Enforcement and Adjudication
Investigation includes the powers to:
conduct inspections
issue subpoenas/request search warrants
Adjudication
Negotiated Settlement
Formal Complaint
Hearing
Agency Order: initial and final
Laws designed to make agencies more accountable through public scrutiny
Freedom of Information Act
Government in the Sunshine Act