© 2006 Prentice Hall Ch. 17-1 THE LEGAL ENVIRONMENT OF BUSINESS A Critical Thinking Approach Fourth...

© 2006 Prentice Hall© 2006 Prentice Hall Ch. 17-Ch. 17-11

THETHE LEGALLEGAL ENVIRONMENTENVIRONMENT OFOF BUSINESSBUSINESS

A Critical Thinking ApproachA Critical Thinking ApproachA Critical Thinking ApproachA Critical Thinking ApproachFourth EditionFourth Edition

Nancy K. KubasekNancy K. Kubasek

Bartley A. BrennanBartley A. Brennan

M. Neil BrowneM. Neil Browne

Nancy K. KubasekNancy K. Kubasek

Bartley A. BrennanBartley A. Brennan

M. Neil BrowneM. Neil Browne


THE LEGAL ENVIRONMENT OF BUSINESS

CHAPTER 17CHAPTER 17

The Law of Administrative AgenciesThe Law of Administrative Agencies



Administrative AgenciesAdministrative AgenciesCreated by Congress in response to Created by Congress in response to economic problems of monopoly and economic problems of monopoly and stock market crash of 1929stock market crash of 1929

ExamplesExamples: ICC, FTC, SEC NLRB, FCC, : ICC, FTC, SEC NLRB, FCC, CPSC, NHSTB, EPACPSC, NHSTB, EPA



Introduction to Administrative LawIntroduction to Administrative Law

Definition:Definition:

Rule, regulation, or statuteRule, regulation, or statute

Procedural or substantiveProcedural or substantive

Originates in any branch of governmentOriginates in any branch of government

Affects an administrative agencyAffects an administrative agency



Administrative AgenciesAdministrative AgenciesCreated by legislationCreated by legislation

Given specific dutiesGiven specific duties

May have power toMay have power to

Make rulesMake rules

AdjudicateAdjudicate

Investigate and Investigate and enforceenforce



Types of Administrative AgenciesTypes of Administrative Agencies

IndependentIndependent

Run by Run by appointed boardappointed board

CFTC, CPSC, CFTC, CPSC, EEOC, NLRBEEOC, NLRB

ExecutiveExecutive

Attached to Attached to executive branchexecutive branch

FDIC, NASA, FDIC, NASA, OSHA, VAOSHA, VA



Growth of Administrative LawGrowth of Administrative LawNeed for more flexible enforcement proceedings Need for more flexible enforcement proceedings

Need for subject matter expertiseNeed for subject matter expertise

Relieve court backlogRelieve court backlog

Need to solve national issues quicklyNeed to solve national issues quickly

Countertrend: Countertrend: DeregulationDeregulation



Creation of Administrative AgenciesCreation of Administrative Agencies

Created by Congress or state legislatureCreated by Congress or state legislature

Enabling legislationEnabling legislation

Delegation of legislative, executive Delegation of legislative, executive and/or judicial powerand/or judicial power

Criticism: Criticism: Such delegation is unconstitutionalSuch delegation is unconstitutional



Functions of Administrative AgenciesFunctions of Administrative Agencies

Rule makingRule making

AdjudicationAdjudication

Administrative activitiesAdministrative activities

Advising

Reporting

Issuing guidelines



Rule MakingRule Making

Rule MakingRule Making——FormalFormal

Under APAUnder APA

Notice via Notice via Federal RegisterFederal Register

Public hearing and live Public hearing and live testimonytestimony

Publication of findings Publication of findings



Rule MakingRule Making

Rule MakingRule Making——InformalInformal

Agency drafts rulesAgency drafts rules

Notice via Notice via Federal RegisterFederal Register

Public comment period 30 daysPublic comment period 30 days

Publication of final draftPublication of final draft

Agency considers comments… Agency considers comments… decides to modify or notdecides to modify or not



Judicial Review of Rule MakingJudicial Review of Rule Making

Generally, courts accept Generally, courts accept administrative rules as lawadministrative rules as law

Subject to constitutional Subject to constitutional challenges:challenges:

VaguenessVagueness

Violation of minimum Violation of minimum constitutional standardconstitutional standard

Beyond scope of authorityBeyond scope of authority



AdjudicationAdjudication

1. Investigate complaint

2. Negotiation with alleged violator

3. File with ALJ

4. Hearing and decision by ALJ

5. Appeals taken to full commission or court



Limitations on Administrative AgenciesLimitations on Administrative AgenciesStatutoryStatutory

APA, FOIA, FPAAPA, FOIA, FPA

InstitutionalInstitutional

ExecutiveExecutive

Appointment power, budget control, executive ordersAppointment power, budget control, executive orders

LegislativeLegislative

Oversight, investigation, termination, advise and consentOversight, investigation, termination, advise and consent

JudicialJudicial

Court review of agency decisionsCourt review of agency decisions



State and Local Administrative AgenciesState and Local Administrative Agencies

State:State: utility commissions, universities, tax collection utility commissions, universities, tax collection

Local:Local: land planning boards, zoning commissions, land planning boards, zoning commissions, school boards school boards

Each state and territory has Each state and territory has analogous local agenciesanalogous local agencies



Global Dimensions of Administrative Global Dimensions of Administrative AgenciesAgencies

Some other countries have more powerful Some other countries have more powerful agencies, with broader scope and purposeagencies, with broader scope and purpose

There is general cooperation at the There is general cooperation at the ministerial level among agencies of ministerial level among agencies of different countries having similar different countries having similar dutiesduties

Examples

Japan’s MITI, China’s MOFTEC

© 2006 Prentice Hall Ch. 17-1 THE LEGAL ENVIRONMENT OF BUSINESS A Critical Thinking Approach Fourth...

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