© 2004 West Legal Studies in Business, a Division of Thomson Learning 7.1 Chapter 7 Government Regulation: Anatomy and Enforcement of a Regulation

© 2004 West Legal Studies in Business, a Division of Thomson Learning

7.1

Chapter 7Chapter 7

Government Regulation: Government Regulation: Anatomy and Anatomy and

Enforcement of a Enforcement of a Regulation Regulation

7.2

Functions of Functions of Administrative AgenciesAdministrative Agencies

ExecutiveExecutive

Law enforcement and administrativeLaw enforcement and administrative

AdjudicativeAdjudicative

Hearings before administrative law Hearings before administrative law judgesjudges

LegislativeLegislative

Both informal and formal rule makingBoth informal and formal rule making

Hybrid rule makingHybrid rule making

7.3The Making of a Federal The Making of a Federal Regulation: Steps 1, 2, and Regulation: Steps 1, 2, and

33Step 1: Society perceives a Step 1: Society perceives a problemproblem

Step 2: Congress passes an Step 2: Congress passes an enabling actenabling act

Step 3: An agency studies Step 3: An agency studies the problemthe problem

7.4

The Making of a Federal The Making of a Federal Regulation: Step 4Regulation: Step 4

Step 4: The agency proposes a Step 4: The agency proposes a regulationregulation

The Administrative Procedure Act The Administrative Procedure Act allows thisallows this

Notice is given to the Federal Notice is given to the Federal RegisterRegister

Not all regulations must be Not all regulations must be publishedpublished

Notice is easier to find with the Notice is easier to find with the advent of the Internetadvent of the Internet

7.5


Step 5: Public commentsStep 5: Public comments

Time to commentTime to comment

Form for commentForm for comment

What agencies must do with What agencies must do with commentscomments

Why commentWhy comment

7.6


Step 6: The agency promulgates, Step 6: The agency promulgates, modifies, or withdraws the regulationmodifies, or withdraws the regulation

Promulgation – when the topic is Promulgation – when the topic is noncontroversial and has no problemsnoncontroversial and has no problems

Modification – when topic is Modification – when topic is controversial or agency does not fully controversial or agency does not fully understand problemunderstand problem

Withdrawal – when regulation has Withdrawal – when regulation has overwhelming criticismoverwhelming criticism

7.7


Step 7: Challenges in court to Step 7: Challenges in court to the promulgated regulation the promulgated regulation occur when the regulationoccur when the regulation

Is in violation of the U.S. Is in violation of the U.S. ConstitutionConstitution

Is arbitrary, capricious, an abuse Is arbitrary, capricious, an abuse of discretionof discretion

Is beyond the authority of the Is beyond the authority of the enabling actenabling act

7.8


An agency acts An agency acts ultra viresultra vires when itwhen it

Makes regulations beyond Makes regulations beyond the authority of the enabling the authority of the enabling act grantsact grants

Makes regulations where no Makes regulations where no enabling act exists at allenabling act exists at all

7.9


Step 8: An agency enforces Step 8: An agency enforces valid regulation through valid regulation through investigation, prosecution, investigation, prosecution, and administration by means and administration by means ofof

Permits and licensesPermits and licenses

ProsecutingProsecuting

7.10


An agency enforces valid An agency enforces valid regulation by means of regulation by means of

Searches and investigations by Searches and investigations by police and FBI officers police and FBI officers

The general ruleThe general rule

Practical tipPractical tip

Administrative sanctionsAdministrative sanctions

Civil penaltiesCivil penalties

7.11


Step 9: Agencies hold Step 9: Agencies hold adjudicatory hearingsadjudicatory hearings

The hearing (the agency is the The hearing (the agency is the prosecutor)prosecutor)

An administrative law judge (one An administrative law judge (one who presides over proceedings)who presides over proceedings)

The parties (introduce evidence, The parties (introduce evidence, witnesses, and arguments to witnesses, and arguments to support their cases)support their cases)

7.12


Step 10: Appeal of administrative Step 10: Appeal of administrative law judge’s decisionlaw judge’s decision

StandingStanding

ExhaustionExhaustion

Exceptions to the exhaustion doctrineExceptions to the exhaustion doctrine

Appeals to the courtsAppeals to the courts

Appealable agency actionAppealable agency action

Proper courtProper court

RipenessRipeness

7.13

The Making of a Federal The Making of a Federal Regulation: RemediesRegulation: Remedies

A reviewing court may declare A reviewing court may declare agency action illegal if it has agency action illegal if it has actedacted

Arbitrary, capricious or abused its Arbitrary, capricious or abused its discretiondiscretion

Contrary to constitutional right, Contrary to constitutional right, power, privilege, or immunitypower, privilege, or immunity

Beyond its statutory authorityBeyond its statutory authority

Without observing legal proceduresWithout observing legal procedures

Without substantial evidenceWithout substantial evidence

7.14

More Points More Points About RulemakingAbout Rulemaking

No evidentiary hearing is No evidentiary hearing is necessarynecessary

Specific statutes may require Specific statutes may require a hearing for informal rule a hearing for informal rule makingmaking

Reg-neg Reg-neg ((regulation that is regulation that is negotiatednegotiated)) is possible for is possible for future federal rule makingfuture federal rule making

7.15

Recap – Terms to KnowRecap – Terms to Know

Functions of agencies: executive, Functions of agencies: executive, adjudicative, legislativeadjudicative, legislative

Rule making: formal, informal, Rule making: formal, informal, hybridhybrid

Enabling actEnabling act

Public commentPublic comment

Arbitrary and capriciousArbitrary and capricious

ExhaustionExhaustion

Reg-negReg-neg

Documents

© 2004 West Legal Studies in Business, a Division of Thomson Learning 7.1 Chapter 7 Government Regulation: Anatomy and Enforcement of a Regulation