387
CHAPTER 44
ADMINISTRATIVE LAW
ANSWER TO CRITICAL ANALYSIS
QUESTION IN THE FEATURE
INSIGHT INTO ETHICS—CRITICAL THINKING—INSIGHT INTO THE E-COMMERCE ENVIRONMENT
(PAGE 871)
Do pharmaceutical companies have an ethical responsibility to correct erroneous information about
their products on sites such as Wikipedia? To be sure, drug companies are better off if there is correct
ANSWERS TO QUESTIONS
AT THE ENDS OF THE CASES
CASE 44.1—QUESTIONS (PAGE 866)
1A. Today, children are likely exposed to indecent language in various media far more often than
they were in the 1970s, when the Federal Communications Commission first began to sanction indecent
speech. Does this mean that we need more—or less—stringent regulation of broadcasts? Explain. The
answers to this question given by the Second Circuit Court of Appeals and the United States Supreme
Court, respectively, are illustrative. The Court of Appeals argued that the greater likelihood that today’s
children would hear indecent speech from other media sources supported less (not more) stringent
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regulation of broadcast programs. According to the Court of Appeals, the Commission’s decision was
“devoid of any evidence that suggests a fleeting expletive is harmful,” and the Commission certainly did
not establish “that this harm is serious enough to warrant government regulation.” The Supreme Court,
however, reached just the opposite conclusion. According to the Supreme Court, “the Commission
could reasonably conclude that the pervasiveness of foul language, and the coarsening of public
entertainment in other media, such as cable,” justified a more stringent regulation of broadcast
programs—so as “to give conscientious parents a relatively safe haven for their children.”
2A. Technological advances have made it easier for broadcasters to “bleep out” offending words in
the programs that they air. Does this development support a more stringent—or less stringent—
enforcement policy by the Federal Communications Commission? Explain. The fact that it is now easier
CASE 44.2—QUESTIONS (PAGE 870)
WHAT IF THE FACTS WERE DIFFERENT?
Suppose that the Forest Service had granted WPG a permit for its helicopter-skiing operations on
national forest land without preparing an EIS or soliciting public comment. How might that have
changed the court’s ruling in this case? In this scenario, the agency would not have complied with the
general requirements for notice-and-comment rulemaking nor would it have followed the particular
demands of the NFMA and NEPA. The court most likely would have ruled against the agency under the
arbitrary and capricious standard and have ordered it to prepare an EIS.
THE ETHICAL DIMENSION
If it turned out that the helicopter-skiing operation had paid a substantial sum to the Forest Service
official who prepared the EIS to influence the official’s findings, would the court have been able to
consider this fact and invalidate the permit? Why or why not? Yes. A payment to influence agency
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CASE 44.3—QUESTION (PAGE 875)
THE ETHICAL DIMENSION
Sikorsky and Pratt also argued that if the documents were released, their competitors would use the
documents to discredit them in the eyes of current and potential customers. Would such actions
amount to a “substantial competitive harm”? Explain. The court answered this question in the negative.
As the court noted in the opinion, to qualify as a “substantial competitive harm,” a harm must “flow
from the affirmative use of proprietary information by competitors.” The court stated that calling
customers’ attention to unfavorable agency evaluations or unfavorable press does not amount to an
“affirmative use of proprietary information by competitors.” “Exemption 4,” said the court, “does not
guard against mere embarrassment in the marketplace or reputational injury.”
ANSWERS TO QUESTIONS IN THE REVIEWING FEATURE
AT THE END OF THE CHAPTER
1A. Type of agency
The SEC is an independent regulatory agency, because the president does not have the power to appoint
and remove federal officers at the SEC. Because federal officers at the SEC are not appointed by the
president, serve for a fixed term, and cannot be removed from their positions without just cause, the
SEC is an independent regulatory agency.
3A. Chevron deference
The SEC will probably not get Chevron deference and the courts will give careful review to the new
regulation. The new rule is a major expansion of regulatory power and it is not clear it was the intent of
Congress to go this far.
4A. Interpretative rules
Interpretive rules are not subject to the same level of judicial review as are new substantive rules.
ANSWER TO DEBATE THIS QUESTION IN THE REVIEWING FEATURE AT
THE END OF THE CHAPTER
CHAPTER 44: ADMINISTRATIVE LAW 391
Because an administrative law judge (ALJ) acts as both judge and jury, there should always be at
least three ALJs in each administrative hearing. It is unfair to give an ALJ so much power within any
administrative agency. After all, each ALJ works for the administrative agency that she or he is supposed
to judge in any dispute. How can we assume that an ALJ will be unbiased? There will always be a ten-
ancy for ALJs to favor the actions of administrative agencies. There is at least a chance of more unbiased
decisions if at least three ALJs hear each case
ANSWERS TO QUESTIONS AND CASE PROBLEMS
AT THE END OF THE CHAPTER
44-1A. Rulemaking and adjudication powers
(Chapter 44—Pages 866–868 & 872–873)
44–2A. QUESTION WITH SAMPLE ANSWER: Informal rulemaking
The court will consider first whether the agency followed the procedures prescribed in the
44-3A. Arbitrary and capricious test
(Chapter 44—Pages 864–866)
The U.S. Court of Federal Claims held that “the USDA acted arbitrarily and capriciously by deeming
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acted arbitrarily and capriciously when it effectuated the suspension.” The court explained that the
USDA abused its discretion when it determined that evidence of Lion’s “lack of integrity in April 1998,
which was known to the agency as of May 1999, seriously and directly affected plaintiff’s present
responsibility as a Government contractor in . . . 2001. The USDA awarded plaintiff five contracts
between the completion of its investigation in May 1999 and its decision to suspend plaintiff in January
2001. . . . [F]ive times between May 26, 1999, and February 1, 2001, the USDA itself affirmed that
plaintiff’s business practices met the standards for present responsibility. Significantly, by the USDA’s
44-4A. Investigation
(Chapter 44—Pages 870–872)
The court ordered UAL to comply with the subpoena. UAL appealed to the U.S. Court of Appeals for the
Seventh Circuit, which reversed the order of the lower court and remanded the case for further
44-5A. Judicial controls
(Chapter 44—Page 864)
The U.S. Court of Federal Claims granted a summary judgment in the government’s favor. On ITAC’s
appeal, the U.S. Court of Appeals for the Federal Circuit affirmed this judgment, holding that the Air
44–6A. CASE PROBLEM WITH SAMPLE ANSWER: Investigation
The U.S. Constitution’s Fourth Amendment protects against unreasonable searches. The agents should
not be held liable because their “search” was not unreasonable. Riverdale and Knott had no reasonable
44-7A. Rulemaking
(Chapter 44—Pages 866–868)
The U.S. Court of Appeals for the District of Columbia Circuit reviewed and vacated the new conditions,
holding that the SEC violated the Administrative Procedure Act (APA) when the agency reaffirmed the
44-8A. Agency powers
(Chapter 44—Pages 860–861 & 864–866)
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The United States Supreme Court held that greenhouse gases fit within the Clean Air Act’s (CAA’s)
definition of “air pollutant.” Thus, the Environmental Protection Agency (EPA) has the authority under
44–9A. Judicial deference
(Chapter 44—Pages 868–870)
A court of appeals reviews the legal issues raised in an administrative appeal but accords deference to
relevant factual finding. An ALJ’s factual determinations must be upheld if they are supported by
44-10A. A QUESTION OF ETHICS: Rulemaking
(a) The FMSCA analyzed the crash risks due to driver fatigue according to a new model to
justify an increase in the maximum number of daily and weekly hours that long-haul truck drivers could
drive and work. The agency did out reveal this new methodology, however, until it was too late for
public comment. Public Citizen objected to the agency’s reliance on the new model, arguing that it had
An agency’s withholding of its methods, when their disclosure is required under the APA, could
be portrayed as unethical. It could be described as deceitful or manipulative to reveal this information
late or not at all. Interested parties might be faulted for not asking about the methods, but this should
not wholly excuse the agency. The FMSCA did not argue that its failure to disclose the methods was
inadvertent or innocently overlooked, but if it had, the response might have been that the agency