CH 6 MGMT 209 (TEST 3 Swim)

SEC, ICC, FCC; Can lead to Regulatory Capture

NLRB, FTC, EPA

Appointed and removed by president and normally confirmed by senate (removal does not need senate)

Stabilize falling prices, deter cutthroat competition (was during great depression)

Created by enabling statute, appointed by president with senate confirmation (pres can't remove unless for cause)

Supreme Court took down National Industrial Recovery Act (cornerstone of New Deal) saying that the law was invalid as an unconstitutional delegation of legislative authority-boards were price-setting for major industries to deal with cutthroat competition

Conservatives Charles Hughes and Owen Roberts switched their votes from against Roosevelt's New Deal (Soc Sec Act and Nat Labor Relations Act), therefore saving the nine justices who had tons of pressure on them over New Deal

Upheld delegation of legislative powers-The Office of Price Administration was setting max rents and commodity prices to deal with inflation, Court found they were within their powers to do so

Bureau of Competition (part of FTC)

Made organizational structure more uniform, give guidance to agencies, set up 3 types of admin rules: regulatory (new informal), procedural (formal), substantive (informal)

Define purpose of an agency

done with PROCEDURAL & REGULATIONS rules (can NOT be with substantive)
Agency promulgates draft
Notice to Fed Register
Public can send in written comments (30 days)
Agency can REVISE or IGNORE
Final draft published in Fed Register and take effect in 30 days

done with SUBSTANTIVE rules
Must publish "Notice of Proposed Rule-Making" in Fed Register including:
Hearing date, time, place, nature
Legal Authority, description of issues, 30 day notice minimum
Hearing-record made, exhibits, witnesses, can be used for delay (up to 10 yrs)
Final draft published in Fed Register no sooner than 30 days

Procedural, Regulations (both informal), Substantive (formal) (informal rules looked at more harshly by Courts, some Agencies try to pass substantive as procedural/regulatory and Courts will stop this)

Self-reporting requirements, hold hearings, subpoena, physical inspection, fines, court actions, threaten to go public, etc.

Only need legitimate govmt interest; admin warrants can be obtained but not always needed if life/immediate danger there

No jury, agency both prosecutor and judge; written opinion given by admin law judge, can appeal in agency then appeal to US Court of Appeals

creating accessibility to administrative process
lessening problems for small businesses
sunset laws (aka death date)
Deregulation

Pure Food and Drug Act 1906 (Wiley Act); set standards of purity and quality, variations must be disclosed, forbid false claims in food & drugs

Campaign that showed what drugs and foods sold; Led to Food, Drug, and Cosmetic Act of 1938 where manufacs had to prove drug was safe with FDA approval before it could be used, specified medicine prescriptions and cosmetics/therapeutic devices (meat still exempt) (burden of proof on manufac)

After thalidomide tragedy; drug had to be effective, gave FDA control over drug advertising

standards, quality, quantity/fill of container, added nutrients, food additives, vaccines, dietary supplements, tobacco products, etc. (shares in a few things like pesticides and drinking water and advert)

FDA control over food additives (carcinogenic adds banned), established zero risk standard (ANY risk, then couldn't be sold)

Russian scientist published report that red dye no 2 caused cancer in labrats, FDA admitted high doses could hurt, M&M pulled out red M&M's even though they didn't contain red dye no 2 and had to wait 10 yrs to put it back in in Christmas specials

Court ruled that 7th amend rights to trial BY JURY reserved for suits at common law, not administrative adjudications (Admin law judge-has the power)

agency decision must be based on substantial evidence

Requires that agencies headed by two or more people appointed by the pres hold every portion of every meeting in the open and subject to public observation

EPA requested on-site inspection of Dow, who refused. EPA hired commercial aerial photographer to get pictures, Dow sued, Court held that Dow plant was an "open field" and EPA didn't violate 4th amendment rights, only used photographer to enhance human vision

Changed carcinogen issues to reasonable certainty of no harm (changed from 0 risk factor), pesticides under FDA now

Labeling had to be honest and informative (inconsistent, serving size not considered)

Goals-consumer friendly labeling, standardize serving sizes, list amount of servings per package, standardize language, make manufacs prove health claims

Led to Federal Anti-Tampering Act

Drug Price Competition and Patent Term Restoration Act (generic drugs)

Anti smoking law that set regulation of advertisements, outlaw flavored cigs, FDA approval to sell them

Led to Consumer Product Safety Commission in 1972 that applies to consumer goods (5 members, 7 yr terms, appointed by pres, only takes 3 to act)

Regulates virtually ALL children's products and requires General Certificate of Conformity (GCC) based on test of each product

Regulates through testing (performance & label standards)
Powers of recall, ban product, amend standard, Judicial Review

USDA mostly regulates meat, poultry and egg products, FDA most everything else