Ch. 23: Administrative Agencies – No. 1
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
ADMINISTRATIVE LAW
enforce legislative acts (e.g., the Social Security
Administration).
powers.
beyond the scope of its enabling legislation.
Administrative Law: The body of rules, orders, and
decisions issued by administrative agencies, such as the
federal Occupational Safety and Health Administration or a
Ch. 44: Administrative Law – No. 2
Clarkson et al.’s Business Law (12th ed.)
AGENCY POWERS AND THE CONSTITUTION
interpretive rules, which declare policy but do not
create new legal rights or obligations.
Delegation Doctrine: Courts interpret Article I, Sections 1
LIMITATIONS ON AGENCY POWERS
Executive Controls: A president or governor generally has
the power to appoint agency officials, to veto enabling
generally controls agency appropriations; and may “freeze”
the implementation of new rules before they take effect.
Judicial Controls: Most agency decisions are subject to
judicial review if the party seeking review can establish that
generally review agency decisions only for procedural
irregularities, failure to properly interpret applicable
statutes, lack of evidentiary support, constitutional
issues, and abuse of agency power.
Ch. 44: Administrative Law – No. 4
Clarkson et al.’s Business Law (12th ed.)
THE ADMINISTRATIVE PROCEDURE ACT
The Administrative Procedure Act of 1946 empowers a
federal court to “hold unlawful and set aside” agency actions
that the court finds to be “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.”
Among the factors courts consider include whether the
evidence.
Ch. 44: Administrative Law – No. 5
Clarkson et al.’s Business Law (12th ed.)
AGENCY RULEMAKING
agency in the Federal Register. The notice invites
public comment and notifies the public of the times and
places of any hearings on the proposed rule.
Comment Period: Following publication in the Federal
Final Rule: Once the final version of the rule is decided
upon by the agency, it will be published first in the
Federal Register and then compiled annually in the
Code of Federal Regulations.
Ch. 44: Administrative Law – No. 6
Clarkson et al.’s Business Law (12th ed.)
AGENCY INVESTIGATION
a subpoena compelling the entity to produce records
(subpoena duces tecum) or to provide testimony
(subpoena ad testificatum), or
(1) whether the investigation has a legitimate purpose;
(2) the relevance of the information sought;
(3) the specificity of the agency’s demand for testimony or
documents; and
(4) the burden the demand places on the entity.
Ch. 44: Administrative Law – No. 7
Clarkson et al.’s Business Law (12th ed.)
AGENCY ENFORCEMENT
If an agency determines that an entity has violated one or
more rules, the agency will seek to secure the entity’s
voluntary compliance, thus avoiding the expense and
inconvenience of full-blown judicial or quasi-judicial
proceedings. If voluntary compliance is not forthcoming,
and the entity will appear before an administrative law
judge (ALJ) who will conduct a quasi-judicial (or
“court–like”) proceeding, the exact nature of which
varies from agency to agency.
(e.g., the U.S. Court of Appeals for the D.C. Circuit).
Ch. 44: Administrative Law – No. 8
Clarkson et al.’s Business Law (12th ed.)
PUBLIC ACCOUNTABILITY
to, via the Internet. Some states have similar legislation.
“Sunshine” Legislation: Subject to certain specified
exceptions, agency meetings must be (1) noticed to the public
in advance and (2) open for public observation, if not
about forthcoming regulations, and reduce the record-keeping
responsibilities of small businesses.
Small Business Regulatory Enforcement Fairness Act
(SBREFA): Empowers federal courts to enforce the RFA,
requires federal agencies to explain new regulations in “plain
English,” provides ombudsmen to receive comments and
complaints from small businesses, and entitles small
businesses to recover expenses and legal fees incurred due to
“excessive” agency demands.
Ch. 44: Administrative Law – No. 2
Clarkson et al.’s Business Law (12th ed.)
AGENCY POWERS AND THE CONSTITUTION
interpretive rules, which declare policy but do not
create new legal rights or obligations.
Delegation Doctrine: Courts interpret Article I, Sections 1
LIMITATIONS ON AGENCY POWERS
Executive Controls: A president or governor generally has
the power to appoint agency officials, to veto enabling
generally controls agency appropriations; and may “freeze”
the implementation of new rules before they take effect.
Judicial Controls: Most agency decisions are subject to
judicial review if the party seeking review can establish that
generally review agency decisions only for procedural
irregularities, failure to properly interpret applicable
statutes, lack of evidentiary support, constitutional
issues, and abuse of agency power.
Ch. 44: Administrative Law – No. 4
Clarkson et al.’s Business Law (12th ed.)
THE ADMINISTRATIVE PROCEDURE ACT
The Administrative Procedure Act of 1946 empowers a
federal court to “hold unlawful and set aside” agency actions
that the court finds to be “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.”
Among the factors courts consider include whether the
evidence.
Ch. 44: Administrative Law – No. 5
Clarkson et al.’s Business Law (12th ed.)
AGENCY RULEMAKING
agency in the Federal Register. The notice invites
public comment and notifies the public of the times and
places of any hearings on the proposed rule.
Comment Period: Following publication in the Federal
Final Rule: Once the final version of the rule is decided
upon by the agency, it will be published first in the
Federal Register and then compiled annually in the
Code of Federal Regulations.
Ch. 44: Administrative Law – No. 6
Clarkson et al.’s Business Law (12th ed.)
AGENCY INVESTIGATION
a subpoena compelling the entity to produce records
(subpoena duces tecum) or to provide testimony
(subpoena ad testificatum), or
(1) whether the investigation has a legitimate purpose;
(2) the relevance of the information sought;
(3) the specificity of the agency’s demand for testimony or
documents; and
(4) the burden the demand places on the entity.
Ch. 44: Administrative Law – No. 7
Clarkson et al.’s Business Law (12th ed.)
AGENCY ENFORCEMENT
If an agency determines that an entity has violated one or
more rules, the agency will seek to secure the entity’s
voluntary compliance, thus avoiding the expense and
inconvenience of full-blown judicial or quasi-judicial
proceedings. If voluntary compliance is not forthcoming,
and the entity will appear before an administrative law
judge (ALJ) who will conduct a quasi-judicial (or
“court–like”) proceeding, the exact nature of which
varies from agency to agency.
(e.g., the U.S. Court of Appeals for the D.C. Circuit).
Ch. 44: Administrative Law – No. 8
Clarkson et al.’s Business Law (12th ed.)
PUBLIC ACCOUNTABILITY
to, via the Internet. Some states have similar legislation.
“Sunshine” Legislation: Subject to certain specified
exceptions, agency meetings must be (1) noticed to the public
in advance and (2) open for public observation, if not
about forthcoming regulations, and reduce the record-keeping
responsibilities of small businesses.
Small Business Regulatory Enforcement Fairness Act
(SBREFA): Empowers federal courts to enforce the RFA,
requires federal agencies to explain new regulations in “plain
English,” provides ombudsmen to receive comments and
complaints from small businesses, and entitles small
businesses to recover expenses and legal fees incurred due to
“excessive” agency demands.