978-1305575080 Chapter 6 Solution Manual

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Chapter 6

ADMINISTRATIVE AGENCIES

RESTATEMENT

An administrative agency is a governmental entity charged with the responsibility of administering and implementing

legislation enacted by Congress or state legislatures. Administrative agencies perform a unique role in government in

that they legislate, enforce and adjudicate matters under their jurisdiction. They are public record bodies in the sense

that, with limited exceptions, their meetings, actions and records are open to the public.

Administrative agencies promulgate regulations (or legislate) which provide details as to how the legislative mandate

will be carried out. These regulations have the force and effect of law. Administrative agencies do not promulgate

regulations without following the required process of research, notification and public input.

Administrative agencies also hold executive powers in that they can conduct investigations for possible violations and

bring charges for violations. These powers provide the enforcement authority agencies need to have in order to carry

out their legislative mandates. Administrative agencies are subject to the constitutional limits and rights afforded

individuals such as due process and privacy (search warrant requirements).

In their judicial roles, administrative agencies are a form of specialized courts that conduct hearings to determine

whether a violation of law has occurred, and, if so, what sanctions should be imposed. Administrative agency

hearings tend to be less formal and more streamlined than the traditional judicial process. As long as a matter is

within an administrative agency’s jurisdiction, the parties must follow the administrative agency’s procedure and

exhaust all administrative remedies before proceeding to court with the issues.

STUDENT LEARNING OUTCOMES

LO.1: Describe the nature and purpose of administrative agencies.

LO.2: Discuss the legislative or rulemaking power of administrative agencies.

LO.3: Explain the executive or enforcement function of administrative agencies.

LO.4: Discuss the judicial power of administrative agencies including the rule on exhaustion of administrative

remedies.

INSTRUCTOR’S INSIGHTS

Break the chapter down into four components – related Learning Outcomes are indicated in ( ):

1. What is the nature of the administrative agency? (LO.1)

Define administrative agency for the students

Discuss why administrative agencies are important

2. What are the legislative powers of an administrative agency? (LO.2)

Cover the authority of administrative agencies to promulgate regulation

3. What are the executive powers of an administrative agency? (LO.3)

Enforcement or execution of the law

4. What are the judicial powers of an administrative agency? (LO.4)

Explain the steps in an administrative agency hearing

Give the authority an administrative agency has for enforcement and penalties

CHAPTER OUTLINE

I. What is the Nature of the Administrative Agency?

A. Government body charged with administering and implementing legislation – e.g., departments, boards,

commissions, bureaus (See Figure 6-1 in text)

D. Open operation of administrative agencies

1. Processes governed by Administrative Procedure Act (APA) requires:

a. Open records

2. Freedom of Information Act (FOIA) permits public to request and obtain documents from administrative

DISCUSSION POINTS: Ethics & The Law

IRS Employees Who Snoop

The information provided by citizens to the government is for limited purposes and access. The understanding is that

their tax returns are submitted for processing and review, and they are not submitted to be searched or to have any

information disclosed.

The problems with the employees’ behavior in just looking at files is that they now have information that could slip out

or accidentally be shared. The closer the limited-use taxpayer information is held to the vest, the less likely there is to

be a breach of privacy.

3. Sunshine Act of 1976 – also known as the Open Meeting Law; agency must disclose:

a. That meeting will be held

II. What are the Legislative Powers of an Administrative Agency?

A. An agency’s regulations as law

B. Restrictions on an agency’s authority

CASE BRIEF: Massachusetts v. EPA

549 U.S. 497 (2007)

FACTS: On October 20, 1999, a group of 19 private organizations (petitioners) filed a rulemaking petition

asking EPA to regulate “greenhouse gas emissions from new motor vehicles under § 202 of the

Clean Air Act.” Petitioners maintained that greenhouse gas emissions have significantly accelerated

climate change; and that “carbon dioxide remains the most important contributor to [man-made]

forcing of climate change.”

Fifteen months after the petition was filed, the EPA requested public comment on “all the issues

raised in [the] petition,” adding a “particular” request for comments on “any scientific, technical,

On September 8, 2003, EPA entered an order denying the rulemaking petition because (1) the

Clean Air Act does not authorize EPA to issue mandatory regulations to address global climate

change; and (2) even if the agency had the authority to set greenhouse gas emission standards, it

The court of appeals dismissed the appeal from the agency denial and the Supreme Court granted

certiorari.

ISSUE: Did the EPA not follow its statutory mandate in refusing to regulate greenhouse gases? Was it

required to regulate the gases? Was it within its authority to promulgate such regulations?

REASONING: The court held that greenhouse gases were a form of pollution and that the Clean Air Act required

the EPA to take steps to curb those emissions. The court found that any justification the EPA gave

for inaction was not supported by either the statutory construction or the evidence on global

warming. The decision was a 5 to 4 decision in which the dissent maintained that no matter how

C. Administrative agency rulemaking (See Figure 6-3 in text)

DISCUSSION POINTS: E-Commerce & Cyberlaw

The Open Net, Net Neutrality, and the FCC’s Authority

There are times when agencies want to step into legally and socially compelling issues and battles, but they cannot

do so without the proper authority granted in an enabling statute. The underlying issue here is a controversial one that

deals with the authority of the FCC to create an open net.

2. Agency research of the problem

3. Agency publication of proposed rule

4. Must give public notice of proposed rulemaking; published in Federal Register

5. Must give public the opportunity for feedback (written or hearing) – public comment period

6. Can adopt, modify, or modify and republish

III. What are the Executive Powers of an Administrative Agency?

A. Enforcement or execution of the law

B. Constitutional limitations on administrative investigation

1. Inspection of premises

2. Aerial inspection – the Federal Drug Enforcement Agency has, in conjunction with some state agencies,

conducted extensive aerial searches for marijuana plantations. Property owners have objected to these

3. Production of papers

a. Constitutional protection of search and seizure and self-incrimination are limited

4. Compliance verification

IV. What are the Judicial Powers of an Administrative Agency?

A. The agency as a specialized court

1. Not a true court

B. Pattern of administrative procedure

1. Preliminary steps

2. The administrative hearing

a. Ordinarily not subject to rules of evidence

3. Streamlined procedure – can end hearing or process by consent decree, stipulation or ADR

C. Punishment and enforcement powers of agencies

1. Penalty

2. Cease and desist order – e.g., stop running deceptive ad; eliminate safety violation

D. Exhaustion of administrative remedies

1. Discuss remedies available before court action

2. Remind the students that a person is not entitled to judicial relief until all administrative remedies have

E. Appeal from administrative action and finality of administrative determination

1. Procedural issues

2. Questions of fact vs. questions of law

a. Students probably will have some difficulty understanding the difference between questions of law

and questions of fact and understanding the nature of judicial review of administrative agency

determinations. The following example might help:

The local air-quality bureau has cited a business for negligently discharging particulate

matter into the atmosphere in violation of the bureau’s regulations. The business denies

that it negligently did so. An advisorial hearing is conducted in front of the local air-quality

b. Emphasize that the court reviews the agency’s decision and does not “retry” the case. Also point

out that many agency officials or hearing board members who make decisions during a hearing are

i. Requires due process

ii. Notice, hearing

CASE BRIEF: Hornbeck Offshore Services, LLC et al. v. Salazar

696 F.Supp.2d 627 (E.D. La. 2010)

FACTS: Hornbeck and others (plaintiffs) provide services to support offshore oil and gas drilling, exploration,

and production activities in the Gulf of Mexico. Kenneth Salazar is the Secretary of the Department

of Interior (DOI), a federal agency that includes the Minerals Management.

Following the BP Deepwater Horizon drilling platform explosion on April 20, 2010, and the resulting

DOI did a thirty-day study, consulting respected experts from state and federal governments,

academic institutions, and industry and advocacy organizations. On May 27, 2010, DOI issued a

Report that recommended a six-month moratorium on permits for new wells and an immediate halt

to drilling operations on the 33 permitted wells in the Gulf of Mexico. The DOI report also stated that

ISSUE: Are the plaintiffs entitled to an injunction on the moratorium because the action of DOI was arbitrary

and capricious?

REASONING: The court held that the experts balking at the conclusion of the report, the inconsistency of the

moratorium with the report information, and the availability of alternatives made the moratorium

likely to survive a challenge of the action being arbitrary and capricious and issued an injunction.

3. Beyond the jurisdiction of the agency (ultra vires)

4. Arbitrary and capricious

CASE BRIEF: FCC v. Fox Television Stations, Inc.

132 S.Ct. 2307 (2012)

FACTS: In a case that has been around almost as long as Cher, the U.S. Supreme court, once again,

issued a decision related to three FCC charges against Fox and ABC television. First, in the 2002

Billboard Music Awards, broadcast by Fox Television, the singer Cher exclaimed during an

unscripted acceptance speech: “I’ve also had my critics for the last 40 years saying that I was on

my way out every year. Right. So f * * * ‘em.” At the 2003 Billboard Music Awards, Nicole Richie

After these incidents, but before the FCC issued Notices of Apparent Liability to Fox and ABC, it

issued a decision sanctioning NBC for a comment made by the singer Bono during the 2003

Golden Globe Awards. Upon winning the award for Best Original Song, Bono exclaimed: “This is

The networks appealed the findings of indecency and their fines ($1.4 million each). The U.S.

Supreme court (FCC v. Fox Television Stations, Inc. (Fox 1), 556 U.S. 502 (2009)) held that the

FCC’s findings were not arbitrary nor capricious and remanded the case for findings related to the

ISSUE: Did the FCC have the authority to impose the fines on the networks?

REASONING: On appeal to the U.S. Supreme Court, the court held that the FCC failed to give Fox or ABC fair

notice prior to the broadcasts in question that fleeting expletives and momentary nudity could be

The FCC is free to create standards of decency for broadcasting programs. However, the

standards must be established in advance of any charges of violations and those standards must

F. Agencies are not liable for damages to individuals and businesses when they have acted in good faith

ANSWERS TO QUESTIONS AND CASE PROBLEMS

1. Rule promulgation. The FAA could put the rules into place without the comment period and rulemaking process

2. Rulemaking; challenging rules. The court held that the FDA did not have the authority to control ad content. The

Judge Leon granted the injunction based on First Amendment precedent that has held that the government

cannot mandate speech that a speaker would not otherwise make in order to tilt the public debate in its direction.

The following, included as part of the decision, explains the First Amendment concerns:

“The graphic images here were neither designed to protect the consumer from confusion or deception,

nor to increase consumer awareness of smoking risks; rather, they were crafted to evoke a strong

emotional response calculated to provoke the viewer to quit or never start smoking.”

The FDA will appeal the decision, but will miss the deadline of September 2012 that Congress placed in the

statute for the new packaging and ad warnings. You can read more on the history of the rule and see photos of

3. FOIA. No. There are exemptions from disclosure which include individual privacy, competitive, proprietary

information. Exemptions would include privacy on medical matters. Perhaps, though, the court would present

4. Effect of publication in the Federal Register. Yes. Merrill’s ignorance of the regulations did not excuse him. The

Federal Register Act declares that everyone is bound by regulations properly published in the Federal Register,

5. Administrative decision without a jury trial. McHugh is not correct. The proceedings were not improper because

there was no jury. It is constitutional for an administrative agency to make determinations even though money is

6. Legislative power of an agency. Yes. There was no question that the dental care of half a million children in New

York City was a significant public health problem. Also, there was no evidence that fluoridation was harmful;

therefore, the rule-making body had to determine whether fluoridation was the way to cope with the evil that was

present. It was not for the court to say whether a better way was available. The fact that the program benefited

primarily children did not make it discriminatory and not applicable to adults, particularly in view of the fact that

7. Openness of agencies. The Federal Register is the daily publication of the federal government that includes

notice of proposed rulemakings, hearings, public comments periods and the newly promulgated rules. Part of

8. Rule promulgation. The outcry of a consumer group cannot automatically produce a rule. The agency must

study, propose rules and take feedback. The process is the same even when there is great outcry. While there

9. Rulemaking. The EPA has proposed a rule creating an endangered species classification. There has been a

10. Scope of review of administrative agency and decision. No. The task of weighing all of the evidence presented

at the hearings is entrusted to the administrative agency. A court is not in the position to reweigh the evidence but

11. What constitutes a meeting. No. The objection wasn’t valid. The statute was to be liberally construed to allow the

presence of those interested at any meeting that could affect them. Whether outsiders were taking part in the

discussion at the meeting was irrelevant. Note that this hypothetical case is based on the case of Brookwood

Moreover, a good argument could be made that because members of an agency such as a planning commission

are not elected, in contrast with members of a municipal assembly, the agency is much less representative of the

12. Exceptions to disclosure of public records. The addresses at which the donors lived was a matter of their private

lives. The disclosure of that information would not enable persons so informed to take part more effectively in the

democratic process. The only people who would benefit by the disclosure would be solicitors. The disclosure of

13. Rulemaking. The change in the rules requires comments because the proposal is a change in rules. The public

comment period is required under the Administrative Procedures Act so that the public has the chance to provide

The ethical issue is conflict of interest between the doctors and pharmacies and the best interests of their

14. Rule promulgation. The effect of the FAA letter was to promulgate a rule. Although the FAA characterized the

ban on parachutes as simply a safety issue, it was a new rule for operation in the air space around San Diego,

15. Challenges to rulemaking. Greenpeace would need to bring in experts to challenge the agency’s findings on the

numbers. One of the basis for challenging a rule is that it was not based on evidence. Greenpeace has data it

LAWFLIX

Clear and Present Danger (1994) (PG-13)

The struggles of Jack Ryan involve more than Colombian drug lords; he must battle the political appointees and their

overstepping of their agency’s authority. The relationship between agencies and congress is also depicted in the film.

management system for classroom use.