Chapter 8 Regulatory System

Question 1

The Regulatory System

Answer 1

The Regulatory System=Administrative Agencies=The Bureaucracy. Sometimes referred to as the “fourth branch of government”. They can be proactive! First was the Interstate Commerce Commission (1887).

Question 2

Agencies can be Proactive! (Three Ways)

Answer 2

1. Know the industry and can anticipate wrongs (societal issues) and address them.
2. Can address “class action” type harm.
3. Can carry out congressional legislative mandates.

Question 3

Atomic Energy Commission (1946)

Answer 3

Congress took control over nuclear power by creating the Atomic Energy Commission. Made an agency of experts of science to make regulations about atomic use, rules, and technology.

Question 4

Agencies engage in all three of the traditional government functions!

Answer 4

Co-mingling, rather than a separation of powers. Agencies make laws(legislative), execute or administer laws(executive), and adjudicate disputes and interpret laws (judicial).

Question 5

How are Agencies created?

Answer 5

Enabling legislation: creates agencies, defines its mission, duties and powers.
No inherent powers or implied powers.
Agency is a creation of a legislative body (Congress or state legislature).
Agencies exist at all levels of government.

Question 6

Federal (National) Government Agencies (Two Types)

Answer 6

Executive Agencies and Independent Regulatory Agencies.

Question 7

Executive Agencies

Answer 7

Department of…(Defense). Under more strict presidential control.

Question 8

Independent Regulatory Agencies

Answer 8

Still part of the executive branch of government, but there is less control from the presidency over these agencies, and accountability is different. President appoints all the people underneath the head of these agencies.

Question 9

Agencies are not listed in the constitution as part of our governmental structure, how do they exist?

Answer 9

Delegation Doctrine: Power of agencies come from delegation as Congress, having responsibility, and the ability to help oversee implementation of laws.
Elastic Clause: “necessary and proper”, used to help Congress to go out and carry out policies.

Question 10

The Administrative Process (Three Parts)

Answer 10

1. Rulemaking. 2. Investigation. 3. Adjudication.

Question 11

1. Rulemaking

Answer 11

Rules=regulations, having the power of the law.
Look at three things as well: A) Notice of Proposed Rule, B) Comment period, and C) Publication of Final Rule.
Look at the Administrative Procedure Act (APA), must be followed by all agencies.
Enabling legislation may designate type of rulemaking required.

Question 12

A) Notice of Proposed Rule

Answer 12

Federal Register: The agency needs to publish in the federal register for everyone to see, if they want to make a rule.

Question 13

B) Comment Period

Answer 13

This is triggered by the Notice of Proposal. Look at Formal, Informal, and Hybrid Rulemaking procedure for the comment period.

Question 14

Formal (On the Record) Rulemaking

Answer 14

Comment period may be substantial-public hearings; expert testimony, industry and government. May take a long time!

Question 15

Informal (Notice and Comment) Rulemaking

Answer 15

Written comment. No face to face, no hearings, ample time must be allowed. Can involve significant delays too, Peanut Butter Rule (took 10 years).

Question 16

Hybrid Rulemaking

Answer 16

A combination of both formal and informal rulemaking. Example: Can do testimony and have a written comment.

Question 17

C) Publication of the Final Rule

Answer 17

Written into the federal register as well to say if the rule will be published as a law, and if they want to revise a proposed rule.

Question 18

2. Investigation

Answer 18

A) Inspections and Tests B) Subpoenas C) Search Warrants

Question 19

A) Inspections and Tests

Answer 19

Can be done either Voluntarily or Compulsorily.

Question 20

B) Subpoenas

Answer 20

Government has subpoena power: can force people to give records or documents over to the government, and even force someone to testify.

1) For testimony.
2) For documents and records.
3) Is this government intrusion into privacy? The government can not have you come in with all your stuff after being subpoenaed and say you committed a violation; must be coming in to court to testify on a matter already in trial.
4) Balancing government (societal) interests and private/personal interests. (Doe Case)

Question 21

Doe vs. Maryland Board of Social Workers

Answer 21

Court said: The public interest is more important than protecting Mr. Doe’s private interest in truthful disclosure to his therapist.

Question 22

C) Search Warrants

Answer 22

Specific places for specific purposes. All that is needed sometime for a search warrant is “probable cause”. Warrantless searches are authorized in highly regulated industries or ultrahazardous industries, can ask for the records at any time!

Question 23

Dow Chemical Co. vs. United States

Answer 23

Dow Chemical refused an EPA request for inspection of its plant in Midland, Michigan. So the EPA had a photographer take aerial photographs of the plant. Dow sued in Federal Court claiming a violation of its rights under the 4th Amendment.
The Court: There’s an exception to the 4th Amendment with things that are in plain view! Things you can see in the air from an airplane are in plain view and available to public at large!

Question 24

3. Adjudication

Answer 24

A) Settlement B) Formal Complaint C) Hearing before Administrative Law Judge (ALJ) D) Orders E) Appeal

Question 25

A) Settlement

Answer 25

Can be reached at any point in the process after investigation (compliance agreement).

Question 26

B) Formal Complaint

Answer 26

Yup.

Question 27

C) Hearing before Administrative Law Judge (ALJ)

Answer 27

Inherent Bias.
APA requires that ALJ DOES NOT come from agency’s investigative or prosecutorial staff.
Various levels of formality and procedural requirements employed by different agencies.
Most formal hearings will look like trials: containing witnesses, evidence, testimony, to prove the fact that the company did or did not violate the accusations.

Question 28

D) Orders

Answer 28

Consent Order: by agreement/negotiation.

Appeal Order: subject to appeal by either party.

Question 29

E) Appeal

Answer 29

Appeal is a new hearing!
De novo: Review by full board or Commission that oversees agency. Get to start all over again and brand new!
This a new hearing and new testimony may be introduced!
Potential further appeal to U.S. Court of Appeals.

Question 30

Limitations on Agency Powers (Four of these)

Answer 30

1) Judicial Controls 2) Legislative Controls 3) Executive Controls 4) Public Accountability

Question 31

Judicial Controls

Answer 31

Judicial branch oversight over the decisions made by agencies!
Appeals to court system.
Review of the law and its application by the agency. Due process–Constitutional and/or statutory procedural safeguards.
Review of rule-making–rules must not be arbitrary or capricious.
Agency action may not be or ultra vires. Some potential review of evidence (somewhat broader appeal than a court trial); decisions must be supported by substantial evidence.

Question 32

Legislative Controls

Answer 32

Enabling legislation: Legislation can create and abolish agencies!
Can limit the agencies power!
Have influence over the agencies budgets.
Advise and consent on appointments.
Day to day Congress is monitoring these agencies.
Congress can freeze enforcement of final rule for 60 days (Congress can put a hold on it, so that if they can make changes to this or want to think differently about what the proposed rule might be).

Question 33

Executive Controls

Answer 33

Budget Requests (OMB). Office of Management and Budget.
Nominations-president nominates head of agencies.
Control over non-civil positions (fire, demote, etc.).
General veto power over legislature.

Question 34

Public Accountability

Answer 34

FOI-Freedom of Information Act: Any person may request records (but not all).
Sunshine Laws-open meeting laws.