Chapter 6 Administrative Law

Part of exec branch
Enabling legislation from congress and gives them power
Created by Executive Order
--Under direct control of the President, hired and fired (appointed by president, confirmed by senate)
--i.e. Department of Labor, OSHA
--Called Departments, Administrations, or Division
Normally 1 person in charge: head is secretary of labor

-independent of a cabinet, still under presidential control
EX) NASA, EPA

Created by Congress, boards & commissions
Members appointed by president, advice & consent of congress , appointed for terms, only be removed with cause suppose to be non political
Can't be overly dominated by one party (bare majority only)
Congress controls the money >controls the agency

Delegation of legislative power unconstitutional
Constitutionality of administrative agencies in question! National industry recovery act piece of new deal plan to stabilize falling prices

Disgusted with Supreme Court called follow will of people & reorganization, however conservative justices start voting for new deal - Roosevelt winning

Confirmed the delegation of legislative powers WAS constitutional
--> Administrative Agencies held to be constitutional

Power from congress- delegated
Enabling statute creates agency & defines its power gives power to agency
Structure or hierarchy can vary
Little diff bt independent agencies & executive agencies
Ex. FTC

passed to make uniform, defines procedural rules and formalities for all federal agencies, rule book of agencies

-Defines purpose of the agency
-Empowers the agency to create rules and regulations
-Often power is stated in broad terms
-Gives great flexibility to the agency
All agencies are under APA

Carrying out action necessary achieving congressional intent from the enabling statute
Must follow APA & give interested parties opp to be heard
Informal rule making( ok for procedural or interpreted "regulations") - identify need, gives notice, in the federal register, comments ignored/ agency take action
Formal rule making(required for substantive rules) - need, proposal rules promulgated, notice published in federal register (include hearing dates, time, place etc.), formal trial like hearing, final draft published can become effect no sooner than 30 days
FORMAL MANDATED BY APA
agencies sometimes try hide substantive rules as interpretive / procedural to avoid formal rule making process

main job of most agencies
Must obtain info ab cos
Investigatory power: require business self report,
Agencies can't share gathered info by self report
Subpoena power - order person to appear
Physical inspection of business(maybe warrant but only administrative)
"Open field" observation- no warrant

EPA asked for insight inspection chemical plant said no >> open field couldn't claim private

Usually only need reasonable cause to search
Steaks not as high as criminal prevents harass
Only needs light image gov interest
EXCEPTIONS : closely regulated industries - liquor & firearms, colonnade v us
Hazardous industries- statute expressly provide for warrant less searches Donovan v. Dowry
Exigent circumstances

Threat of public exposure, fines
if refuse/ don't comply = court action or criminal offense
Specified by enabling statute to

Most controversial
Hearing before admin law judge who is employee of the agency
Agency is both prosecutor & judge
No jury not usually cause problems

an agency employee who acts as an impartial decision maker
Complaint filed, notify, agency investigates if merited continues, alleged violated can file response, agency negotiate settlement
Hearing before AJA:
Due process, cross examine
Usually no absolute right to attorney, no jury 7th not apply ex. Atlas roofing co. Inc v. Occupational safety & health review commission
Rules evidence relaxed w no jury, degree proof depends
Result: finding of fact, conclusion of law, recommending disposition
Appeal to review board of agency then to United States court of appeals (decisions alj or if appealed sets PRECEDENT)

found in APA, must be timely, have standing, have real dispute, appeals only involve questions of law (rarely do they de novo and restart), appeals = look at mistakes
Informal rule- burden usually really high
Formal- rely on courts record receives lowest judicial review

President can hire/fire heads of department, Congress controls budget "power of the purse"

Reductions in size of gov would cause losses in efficiency public harmed

- Market system
- takes some burden off three branches gov
- can handle political sensitive issues
- leads to specialization by hiring experts in their fields

All regulation comes at price
Can have negative impact
If congress motivated by public interest, how evaluate benefit to cost?
Easy to see costs and condemn regulatory agencies
Should look at society benefit
Takes time not patient
Costs result business try find ways around reg
Businesses ignorance of rule is not a defense against gov enforcement

business' ignorance of rule is not a defense against government enforcement

Accessibility to the administrative process
Small businesses

Gives all citizens the right to inspect all records of federal agencies except those containing military, intelligence, or trade secrets; increases accountability of bureaucracy

A law that requires all committee-directed federal agencies to conduct their business regularly in public session

Requires an analysis of the cost a regulation will impose on small business and must consider less burdensome alternatives

Permits congress review at least 60 days prior to effective date
Requires agencies prep guidelines in "plain English"
If court feels agency fines excessive can get legal expenses created SBREFA

permits congress to review federal regulations for at least 60 days prior to their effective date
-this gives additional time and an additional forum for opponents to present their arguments
-permits small businesses to recover their legal expenses from the government when an agency imposes fines or penalties that the court considers excessive

states, require periodic review of the agency and may not extend them with new legislation
Tx gives death day

calls for a limited form of cost justification for new regulations, must impose least amount of burden on society, maximize net benefits

Lobbyists business following hurt

History: Pure food & drug act
Actual first law during Mexican war concerning adulterer adding some to products
Ask to criminalize but no
Concern natural foods v. Artificial substitute

Economic effects, safety concern during industrialization new synthetic medicine moving mass produced
NEED FOR NATIONAL STANDARD

Advocate for pure food against adulterated

Sickening troops with meat
Upton Sinclair publish the jungle told how nasty
Public outraged > pure food and drug act

forbids interstate and foreign commerce in adulterated and misbranded food and drugs
Named for Harvey w. Wiley head of department of agriculture, bureau of chemistry
Administered by department of ag

Name & pavement in national gov
Wileys original emphasis on food
New emphasis on drug
Court battles lost
Terms expired
FDA sought action from congress , refused
FDA went on the offensive
Catastrophe

Tennessee produced , marketed for children was basically antifreeze over 100 died public outraged
Result : food drug & cosmetic act of 1938

New powers of fda in drugs (need fda approval to sell) catastrophe in Europe: thalidomide > deformed babies led to Kefauver Harris amendments

requires all medications in US to be pure safe and effective

Take drug advertising from FTC
Drug approval
Drug trials
Inspections

required accounting for drugs with a potential for abuse such as barbiturates and amphetamines.

1970s and 80s
- AIDS
- approval of generic drugs
-Recall of medical devices
- speedier approval of drugs

Definition of all food promulgated by secretary
Producers started adding nutrients to enhance sales (vitamin D)
-controls over food additives
- gave recipes of lawful ingredients
- if varied the product "imitation"
- led to passage of the Delaney clause

Banned carcinogenic additives with a zero risk standard

Banned saccharine for cancer causing
Congress intervened stopped the FDA
led to nutrition labeling

requires basic nutritional labeling
Big effect on dietary supplement industry
FDA had the burden of proof prove dietary supplements misbranded

Extended power to FDA to cosmetics, therapeutic devices & new enforcement penalties: injunctions,
Meat exempt from law

-Under the Department of Health and Human Services

Organization
-Office of Commissioner
-Several subparts anwser to Commission

-FDA Regulates many things, not just food and drugs

In Texas can Skype it, investigator go to co, observe, interview, review docs, personally examine products from raw to finished collect samples create report (freedom of information act)
No action/ enforcement:
Recalls, an injunction, seizure of the subject product, fines, consent decree, criminal investigation

recall of almond and peanut butter products that made people sick

recall of broccoli due to potential health risks

Meningitis outbreak
--From New England Compounding Center (NECC)
--One of the deadliest medical outbreaks in the US (>50 killed, >700 sick)
-->Led to massive changes over who has authority (FDA)

High temperature testing revealed cancer causing voluntary recall by manufacturer

Shift emphasis from defensive to offensive
Effort now to prevent contamination of food supply from the beginning
FDA conducted vulnerability assessments on products & processes

Amendment to the food drug & cosmetic act
- called "Delaney clause"
Prevents any additives shown to be cancer causing
Manufactures had the burden of proof show additive was NOT carcinogenic
Exception was GRAS, generally recognized as safe
About 200 substances
Led to zero risk standard!!
Ex. Red dye no. 2 was cancer causing
>> panic over red products, impacted many products, M&Ms (never contained red dye no. 2)
But panic so pulled red m&ms returned 10 years later

changed zero risk standard to "reasonable certainty of no harm" standard; expanded FDA jurisdiction to more pesticides

Applied to retail products sold in enter state commerce, labeling had been Honest & informative , didn't meet need for consistent, understandable & gen useful info (no serving size standards, confusion calories fat protein carbs)

Only mandatory if manufacturer made claims ab nutritional labels in ads
Basically dietary industry & food additives

nutrient levels recommended by the Food and Nutrition Board of the National Academy of Science; designed to meet the needs of the same age and gender; avg daily intake for health
Not satisfy consumer

requires food manufacturers and processors to disclose uniform information about serving sizes and nutrients, and establishes standard definitions for various terms like low fat, lean or organic.
Make manu prove health claims only foods reg by FDA
Serving size still issue : cereal

food whose genetic structure has been altered by adding or eliminating genes to enhance qualities of the product
FDA NOT mandate labeling as of 2013 may change

Influenced by tragic events

FDA development of good manufacturing practices (GMPs) and Durham Humphrey amendment

Also prove drug based on effectiveness
Development
Testing adoption/ approval of new drugs all strict
12 years develop drug and clear FDA

Drugs marketed from 1938-1962 were reviewed for efficacy after Kefaufer-Harris was passed. Legend drugs were examined individually and OTC's were examined by therapeutic category.

Patient package insets to educate consumer
Over the counter drug reviews
Tylenol laced with cyanide > tamper resistant packing reg
& federal anti tampering act

aka Drug Price Competition and Patent Term Restoration Act of 1984. Considered the most significant drug-related legislation affecting pharma and healthcare. H-W made it easier to bring generics to the marker by requiring FDA to only look at bioavailability studies in order to approve. Also gave protection to the research based manu's by providing a 30 months automatic cooling off period

system to collect information on problems with drugs

FDA staff, NIH reps, veterans admin reps

FDA has jurisdiction over medical devices
--i.e. silicone breast implants rupturing into body (FDA ignored warning signs for 12 years)
Dow bankruptcy
Sold again 2002 prove safe & FDA approved

- Anti smoking law
- Advertisements
- Outlaws flavored Cigarettes
- FDA approval on sale of Cigarettes

Determine if only state law was sufficient, no
Independent regulatory agency
- 5 members
- appointed by president
- sever year staggered terms
- no more than three from party
- only requires 3 commissioners to do business
2 positions often vacant
MAJOR ACTIVITIES
Info collection & dissemination
Setting and enforcing product safety standards

More recalls than ever led to
Virtually all child products safe
All domestic producer or importers of non child products issue general certificate of conformity

Portable gasoline containers

set up the Consumer Product Safety Commission to encourage safety in product design and better quality control
Only applies consumer products, excludes industrial products
Prevent death, permanent injury, and Econ loss
Covers thousands products lot for babies

Requires labeling of hazardous materials including manufacturer, type of danger, "Keep out of reach of children", handling and storage instructions

prevent children from choking

art supplies

flammable clothing and interior furnishings

child resistant packaging

requires old refrigerators to be open to prevent accident suffocations

requires public pools to install equipment to avoid drain suction problems that resulted in death

protects consumers against the making and sale of dangerous toys, games, appliances, etc.
Injury info
Conduct hearings on consumer product safety
Can release info to public cause price fall correct market take action remove from market

Because the CPSC regulates potentially dangerous consumer products, it issues product
safety standards for consumer products that pose unreasonable risk of injury.
Performance standards, labeling standards follow APA
Test & certify meet, can ban it, if "immediately hazardous" don't need hearing
Seizure, recall, repair, replacement or refund
Cost to benefit analysis
Reasonably necessary

CPSC recalled , ban , rule in federal register, allowed public comment,

Manufactured in China - used led paint toxic to children
Wooden railway toys
Recall after 1.5 million sold

Voluntary recall by one store
High powered magnet sets
Maxfield & Oberton holding LLC of New York has not been resolved

Take substantive rule and hide as a procedural or regulation & cram it down your throat

Regulations
Procedural rules- appellate court looks at these the harshest bc crammed down throat
Substantial they already saw all facts
Substantive rules- must be done formally