Legal Environment of Business Muncy Test 3

The rules, regulations, orders, and decisions of federal, state, or local government agencies established to perform a specific function. Created by the administrative agencies.

Agencies authorized by federal or state legislation to make and enforce rules to administer and enforce legislative acts. (ex. the Social Security Administration) Exists at all levels of government.

Include those shown on the list of federal departments/agencies handout. These take precedence over conflicting state agency relations.

Usually created as a parallel to a federal agency (e. the Environmental Protection Agency [EPA])

Frequently the agencies at various levels will work together and share the responsibility of creating and enforcing particular regulations.

Enabling legislation
The types of agencies
Agency powers and the Constitution

To create an administrative agency, a legislative body such as Congress passes enabling legislation that specifies the name, purposes, functions, and powers of the agency.

1. Create "rules and regulations for the purpose of carrying out the Act."
2. Conduct investigations of business practices.
3. Obtain reports from interstate corporations concerning their business practices.
4. Investigate violations of federal antitrust statutes.
5. Publish findings of its investigation
6. Recommend new legislation
7. Hold trial-like hearings to resolve a dispute.

Executive agencies
Independent Regulatory agencies

Include the cabinet department of the executive branch and the subagencies within those departments. The president can remove and replace these members.

Agencies outside the major executive departments, such as the EPA or FTC. The president cannot remove these members.

Administrative agencies, which constitute the bureaucracy, are sometimes referred to as the "fourth branch" of the U.S. government because in many ways they function independently of the other 3 branches.

Rulemaking: Agencies and legislature
Enforcement: Agencies and executive branch
Adjudication: Agencies and courts

Issued by administrative agencies which simply declare policy and do not affect legal rights or obligations. (Non-binding)

"Necessary and Proper Clause" of Article I, Section 8 of the U.S. Constitution authorizes delegating such powers to administrative agencies. They are allowed to make laws.

Party seeking court review must first exhaust all administrative remedies before filling lawsuit seeking court review.

Court will not review administrative decision until it is " ripe" for review. There must be an actual argument and not specific to administrative law.

1. Rulemaking
2. Enforcement/Investigations
3. Adjudication

Imposes procedural requirements that all federal agencies must follow in their notice, rulemaking, adjudication, and enforcement functions.

The APA provides that courts should "hold unlawful and set aside" agency actions that are found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law."

The APA includes many requirements concerning the notice that regulatory agencies must give to those affected by its regulations.

The formulation of new regulation.

Exempt from the APA's requirements because they do not establish legal rights.

After a final rule is issued, agencies conduct investigations to monitor compliance with the rule or the terms of the enabling legislation.

Many agencies gather info through on-site inspections.

"To testify" is an ordinary subpoena. Compelling a witness to appear at a hearing.

"Bring it with you". Bring books, papers, documents along with your testimony.

The PURPOSE of the investigation (an improper/illegitimate purpose is harassment).
The RELEVANCE of the information being sought.
The SPECIFICITY of the agency's demand for testimony or documents.
The BURDEN of the demand on the party from whom the information is sought.

An agency's search warrant is an order directing law enforcement officials to search a specific place for a specific item and seize it.

Depending on the agency, negotiations may involve a simple conversation or a series of internal conferences.

1. To avoid appearing uncooperative
2. To avoid the expense involved in formal adjudication proceedings and (possible) later appeals.

If a settlement cannot be reached, the agency may issue a formal complaint against the suspected violator.

Agency adjudication may involve a trial-like arbitration procedure before an administrative law judge (ALJ). The agency must issue a notice for a hearing to take place.

Presides over the hearing and has the power to administer oaths, take testimony, rule on questions of evidence, and make determinates of factor.

If no party appeals the case, the ALJ's decision becomes the final order (becomes legally binding).

All statutes, agency rules, and common law judicial decisions that serve to protect the interests of consumers.

Advertising that may be interpreted as false or misleading.

Advertising based on apparent facts that are scientifically untrue and deceptive.

Vague generalities and obvious exaggerations, however are permissible and not considered deceptive.

Advertising that appears to e based on factual evidence but is not reasonable supported by evidence will be deemed deceptive.

Advertising that contains an endorsement by a celebrity may be deemed deceptive if the celebrity does not actually use the product.

Advertising a product at an attractively low price to lure customers in to buy more expensive items.

Door-to-door sales, telephone and mail-order sales, online sales, unsolicited receipt of merchandise.

Many states and the FTC have these laws that permit the buyers of certain goods to cancel their contracts within three business days (and longer in some states).

Labeling must be accurate and use words that are easily understood by the ordinary consumer.

Consists of all laws and regulations designed to protect and preserve our environmental resources.

A person is liable if they use their property in a manner that unreasonable interferes with others' rights to use or enjoy their own property.

Lawsuits for personal injuries caused by exposure to a toxic substance (such as asbestos, radiation, or hazardous waste) have given rise to growing body of tort law known as toxic torts.

Businesses that engage in ultrahazardous activities (such as transportation of radioactive materials) are strictly liable for any injuries the activities cause.