© 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
The Making of a Federal The Making of a Federal Regulation: Step 5Regulation: Step 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
The Making of a Federal The Making of a Federal Regulation: Step 6Regulation: Step 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
The Making of a Federal The Making of a Federal Regulation: Step 7Regulation: Step 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
The Making of a Federal The Making of a Federal Regulation: Step 7Regulation: Step 7
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
The Making of a Federal The Making of a Federal Regulation: Step 8Regulation: Step 8
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
The Making of a Federal The Making of a Federal Regulation: Step 8Regulation: Step 8
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
The Making of a Federal The Making of a Federal Regulation: Step 9Regulation: Step 9
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
The Making of a Federal The Making of a Federal Regulation: Step 10Regulation: Step 10
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