Chapter 6, Management 211, Swim

Administrative agencies are thought of as

Why administrative agencies are thought of as fourth branch?

Administrative agencies have a major influence on government because

Why were administrative agencies created?

How did administrative agencies receive power?

enabling statues sets agencies

First agency created

Three eras of federal regulatory agencies

Historical era of federal regulatory agency

New Deal era of federal regulatory agency

Socially Conscious era of federal regulatory agency

Type of industry- specific regulatory agency to target railroads

Type of industry- specific regulatory agency to target Securities industry

Type of industry- specific regulatory agency to target Communication Industry

"Regulatory Capture"

"Public interest"

Regulation for industry agencies done by

____ has greatest interest in regulation

Industry has greatest interest in regulation because....
Industry can be represented through

Industry has greatest interest in regulation because....
public loses out

Industry has greatest interest in regulation because....

who opposes interest groups to big business

Economy-wide regulatory agencies cover....

FTC Federal trade commission
prevents?
created during?

NLRB National Labor Relations Board
regulates? in what industries?
created during?

Socially concious era produced what economy wide agencies (4)

Economy wide agencies and regulatory capture??

What has greatest impact of overall legal environment of business?

Types of federal Bureaucratic agencies (4)

Executive agencies (Dependent agencies)

Department of Labor: an executive agency

Whos normally in charge of a federal bureaucratic agency??

Executive agencies are under direct control of

Executive agencies/ dependent agencies usually have what in the title?

Independant Executive Agencies

Examples of Independant executive agencies

Independent agencies

Constitution creates three branches

despite three branches, what has delegated powers?

Delegation of legislative powers was challenged especially during ___

Key piece of New Deal plan
Designed to stabilize falling prices and deter cut-throat competition
Used legislative powers delegated from congress

Ruled the delegation of legislative power to be unconstitutional
Constitutionality of administrative agencies in question

which court case?

Roosevelets Response to the findings of Schechter Poultry Corp v. United States

Switch in time saved nine

delegation of legislative powers constitutional.
Administrative agencies: constitutional
NOW: validity is hardly an issue

which court case

Regulatory agency power comes from

There is little difference between what two agencies

Structure for agencies? Anything to help it now?

Administrative Procedural Act

Who is under the APA?

defines a purpose of agency
empowers agency to create rules and regulation
power in broad terms
flexibility for agency

Legislative Rule-making powers

1. Need for rule or regulation (public demand, congressional mandate, industry request)
2. Agency promulgates draft
3. Put in Federal Register (APA requirement)
4. Final draft published in federal register, takes effect in 30 days

Informal Rule making: Federal Register requirements

"Notice and comment"

1. Need for rule/ regulation
2. Proposal rules promulgated
3. "Notice of Proposed rule making" published in Federal Register
4. Formal trial like hearing
5. Final Draft published & can come into effect no sooner than 30 days

Formal- Rule Making
"Notice of Proposed rule making" published in Federal Register

Formal- Rule Making
Formal trial like hearing

Substantive rules require
informal or formal

procedural or interpretive rules (regulations)
informal or formal

How is formal rule mandated

What do agencies do so they don't have to do formal rule making

For agencies to carry out duties/ obtain information how is this done?

main job of most agencies

Companies response to agencies

Investigatory power

Business to self report and monitor
Report when?
Constitutional protection limits?

Subpoena power

Physical inspection
warrant?
open field

Dow refused inspection from EPA
Dow said violates 4th amendment
Supreme court said "open field"

which court case

4th amendment and agencies
civil or criminal?
harassment?
reasonable cause?

Closely regulated agencies warrant? decided in what case

Tatics to get businesses to follow

threats of public exposure

fines usually don't require pre determinative hearing

which court case

What happens if someone refuses to pay fines

What is the hearing before (type of judge)

Agency is both _

Procedure for court

administrative court disadvantages

Right to Judicial review found in the

finding of facts, conclusion of law, recommended disposition

Does ALJ set precedent in final ruling

end- running

Right to judicial review via APA

What kind of things can be appealed

informal rule making procedure

formal rule making

President appoints ________ for agencies and departments

congressional control of agencies

interest groups

some argue to cut size of government and reduce number of administrative agencies/ cut their budget but the defense is that

Market System problems

EPA
FTC
FAA

Regulation can have negative impact- OSHA example

a. Supreme Court held that the statutory language requiring OSHA to promulgate standards necessary to control health hazards "to the extent feasible" did not mean that OSHA was required to conduct a cost-benefit analysis prior to the imposition of such a regulations
b. Thus, in order to get a cost-benefit analysis, Congress must be explicit in its language

1. Merrill showed that can be result even if governmental agent gave wrong information
2. However, there was a strong dissent
3. Reasonable ignorance of a government regulation is not a defense to an agency action

Continual calls for Reform of Regulatory Agencies

1. Agencies headed by two or more Presidentially appointed people must hold "every portion of every meeting" in the open
2. Subject to public observation
3. Again, there are exceptions and Agency can close such a meeting by a majority vote, subject to review by the appropriate U.S. District Court
4. Day-to-day activities of agency personnel are not covered by the Act
5. Only applies to official business
AMENDMENTS TO THE APA

1. Federal agencies must make agency information available to "any person"
2. "Any person" can request the records of agency that produced the records
3. Agency can refuse under several exceptions
4. Otherwise agency must comply
5. If not, can be hit with court actions to force the agency to comply

do away with governmental regulation
1. Advocates of deregulation feel that business is better off without the governmental regulation
2. Market will be more efficient
3. Agencies create more problems than they solve
4. More popular under Republican Administrations

1. States, not Federal Government
2. Require periodic review of the agency and may not extend them with new legislation to continue

Permits Congress to review new federal regulations for at least sixty (60) days prior to their effective date
2. Requires Agency to prepare guidelines for Small Businesses in "plain English"
3. If Courts feel Agency fines are excessive, Business can get legal expenses
4. SBREFA created the National Enforcement Ombudsmen within the Small Business Administration (SBA)

A. Must measure costs for small business. must consider less burdensome activities

SBREFA created the National Enforcement Ombudsmen within the Small Business Administration (SBA)

a. Administrative agency is given a "death day" on which it will expire
b. Agency then must convince the Texas Legislature that it is doing the job expected by the Legislature
c. Texas Legislature can either extend it or let it expire on the "death day"
i. Agencies will expire and cease to exist on this day unless they get the legislature to reapprove them
ii. Easier to let something die than to kill it
iii. Must justify your existence

Executive Order 13563, January 18, 2011

regulation for food began here but there were things proceeding

the chief chemist for the Department of Agriculture
a. United other chemists, state officials, women's groups, doctors, journalists, and some reform-minded businessmen

*****Generally credited with putting food movement together

Food reforms also grew bc

10. Everything changes due to catastrophe in the meat industry
a. Spanish-American War

which was an expose of the Chicago meat packing industry
c. Public was outraged and demanded change
d. Result was the Pure Food and Drug Act of 1906

Forbids interstate and foreign commerce (Commerce Clause) in adulterated and misbranded food and drugs

making false or misleading label claims in food and drugs
1. Fines
2. Even jail time
b. Drugs had to abide by standards of purity and quality
c. Any variations from standards had to be disclosed on the label

Wiley's Bureau of Chemistry

FDA was located in ______ now is located in _______

Wiley's original emphasis was on __________

terms of the Pure Food and Drug Act expired in 1930
FDA sought action from Congress, Congress refused
so FDA...

a. A Tennessee company produced this sulfa drug
b. Marketed as a new wonder drug for children
c. Solvent in the drug was basically antifreeze which is highly toxic
d. Over 100 people died
e. Public was outraged
f. Result is the Food, Drug and Cosmetic Act of 1938

a. Went after the drugs like the sulfa wonder drugs
1. Manufacturer had to prove the drug was safe before it could be sold
2. Could only be sold with FDA approval
b. Required those drugs and others to be dispensed only with a doctor's prescription
1. Was still a concern over what was prescription and what was over the counter, which could be sold without doctor's prescription

Solved which one was over the counter and which was prescription

i. Never approved for use in the U.S.
ii. Sedative used in Europe
iii. Led to thousands grossly deformed babies beings born

a. In addition to safety which was already required
b. FDA also had to approve the drug based on effectiveness

c. New standards made stricter control of drug approval in the U.S.
i. Took on average $250,000,000 and 12 years for approval

a. Gave FDA more controls over
i. Amphetamines
ii. Barbiturates
iii. Hallucinogens
iv. Other drugs felt to lead to potential abuse
b. Leads to the creation of the Drug Enforcement Administration (DEA) in 1968

d. Speedier approval of drugs
i. Speedier approval was pushed because of AIDS
ii. People dying of AIDS were screaming at the FDA saying, "let us test them, we're dying anyways."

'imitation'

i. FDA assumed more power over food additives
ii. Banned carcinogenic additives with a zero risk standard

FDA Lost some control over some products to the Consumer Product Safety Commission

1. FDA banned saccharin for being cancer causing
2. Congress intervened and stopped the FDA

a. Revolutionized how the FDA would require the listing of basic nutritional labeling information
b. Big effect on the dietary supplement industry
i. Lobbying in Congress
ii. In 1994, Congress allowed that industry to make substantial claims about their products
iii. But had to list that the FDA had not evaluated those statements
iv. FDA had the burden of proof in proving the dietary supplement was misbranded or adulterated

Office of the Commissioner

FDA is a subdivision of the

Four subparts of FDA

Several offices answer to the Commissioner

FDA Regulates

2. Reporting
a. Can be by

b. Begin by filing a complaint with a different entity of the FDA

steps after complaint filled

5. Report can lead to:

an agreement or settlement that resolves a dispute between two parties without admission of guilt

warning or order

1. Shift in emphasis from defensive to offensive
2. Effort now is to prevent contamination of the food supply from the beginning

1. Commonly called the Delaney Clause
2. Prevents any additives shown to be cancer causing (not anymore...)
3. Manufactures had the burden of proof to show that additive was NOT carcinogenic
4. Exception was GRAS, a food substance generally recognized as safe
a. Commonly used food additives like ascorbic acid
**zero risk standard of cancer causing

1. Changed zero risk standard to "reasonable certainty of no harm" standard
2. Expanded FDA jurisdiction to include of 9,000 pesticides

1. Applied to retail products sold in interstate commerce
2. Labeling had to be:
a. Honest and
b. Informative
3. Law did not meet the need for consistent, understandable and generally useful information for consumers
a. No consistent serving size standards
b. Led to confusion on caloric, fat, protein, and carbohydrate amounts

finalized the rules came in 1971 and required:

a. Make labels easier to read and understand by the consumer
b. Make standardized serving sizes
c. List the amount of servings per package
d. Number of calories, fats, saturated fats, and cholesterol per serving
e. Standardize the language used in food labeling
f. Make manufacturers' prove health claims

g. NLEA only applies to foods regulated by the FDA
h. However, the USDA had also voluntarily implemented the NLEA mandates

i. Congress then delayed the implementation of the NLEA by one year

Genetically Engineered Foods

Sulfathiazole tablets led to

Tylenol laced with cyanide in 1983 resulted in

Drug Price Competition and Patent Term Restoration Act
b. Allowed FDA to approve generic versions of brand-named drugs without the formal investigation of the generics that had been done with the original name brand
c. Did not require the formal investigation to be done

a. System to collect information on problems with drugs
b. Computerized in 1998

Medical Devices Amendment of 1976

a. Greatly expanded the FDA's powers over tobacco
b. Designed to be an anti-smoke law
c. Gives FDA ability to ban certain advertisements on labels such as:
1. Low Tar
2. Low Nicotine
d. Outlaws flavored cigarettes
e. Allows government to regulate what goes into cigarettes
f. Requires manufacturers to list the ingredients in cigarettes
g. Gave FDA power to regulate the advertising of cigarettes

some labeling gone into affect
"most significant change to cigarette warnings in 15 years"

Prior to 1967, ________ protected consumers from hazardous household products

b. First direct regulation of product safety in the U.S.
c. Only applies to consumer products, products produced or distributed for "personal use, consumption or enjoyment in a household, in school, or in recreation
2. Specifically excludes products intended for industrial purposes
3. Also, products covered by other regulatory agencies
a. Food, drugs, cosmetics, pesticides, tobacco, medical devices (FDA)
b. Motor vehicles and boats
c. Many others
d. Goal: Prevent deaths, permanent injuries, and economic losses
e. Covers thousands of products
1. Baby products
2. Children's toys
3. Furniture

1. Independent regulatory agency
2. Five members (Commissioners)
3. Appointed by the president
4. Seven year staggered terms
5. No more than three can be from same political party
a. Usually presidents just won't fill the other two spots

requires warning labels on certain hazardous toys such as
a. Electric toys
b. Several baby goods
c. Bicycles
d. Children's bunk beds

Child Safety Protection Act (CSPA)

Labeling of Hazardous Art Materials At (LHAMA)

Flammable Fabrics Act (FFA)

Poison Prevention Packaging Act (PPPA)

Refrigerator Safety Act (RSA)

Virginia Graeme Baker Pool & Spa Safety Act (P&SS ACT)

collects and analyzes consumer product injury reports

computerized system to receive reports of consumer product injury data from hospitals

Conduct hearings on consumer product safety

CPSC requires manufacturers to

Once CPSC has information detects products with a higher risk of injury, then can:

CPSC Judicial Review - If you've lost at all levels of CPSC jurisdiction, appeal to appeals court

cps recalls