LEGL 2700: Chapter 15

who creates the law versus who creates the regulation

legislative branch (Congress)

administrative agencies

the Administrative Procedure Act

the public and provide an opportunity for the public to comment on regulations

promulgation

a law

laws

a board, bureau, commission, or organization that makes up the governmental bureaucracy

SEC
FTC
Federal Reserve
CFPB

responsible for protecting investors in the securities market

responsible for enforcing our anti-trust laws and oversee non-bank businesses that may engage in unfair/deceptive business practices

in charge of running federal reserve/central bank

created by Dodd-Frank Act, protecting consumers in financial transactions

derived through delegation

no

power to create rules and regulations

power to investigate, prosecute, advise, and supervise

power to decide controversies

specificity
expertise
protection
regulation
services

promulgate more specific rules that Congress can

experts in the exact field that Congress doesn't have because Congress is general

take action on behalf of consumers to provide protection in instances when it doesn't make sense to put the burden on individuals

can provide loans/services or benefits to different groups

Veterans Administration
Social Security Administration

rulemaking
adjudicating
advising
investigating

legislative branch
quasi-legislative power

law

Administrative Procedures Act

Federal Register

advisory but do not have the force and effect of law

guidance on how businesses or individuals could comply with the regulation
more detail

judicial branch
quasi-judicial function

fact-finding and applying the law

federal court

cease and desist order
consent order

order that violator must stop objectionable activity and refrain from any further violation

yes, by federal court

order entered by the agency that is agreed upon by the accused and requires the accused to waive rights to judicial review

agree to a certain penalty
sign into the order

no

CFPB complaint alleged that the PayPal had signed customers up for its credit product without their permission, failed to honor promotional benefits, abusively charged consumers deferred interest, engage in illegal billing practices, and mishandled consumer disputes about payments

$15 million to redress victims
$10 million civil penalty
required improved disclosures

executive

the president

National Park Service

legislation to Congress
look at under regulated areas

businesses or individuals

no

· An individual was a funeral director who wrote in to the FTC and wanted an opinion as to whether a particular practice would violate a regulation
· The regulation that he was asking about was referred to as "Funeral Rule" that puts certain protections in place for those who are grieving from being taken advantage of
· Opinion said it would be a violation of the Funeral Rule if you showed grieving family members casket options without showing them the price

executive branch

investigate activités and practices that may be illegal

to require reports, examine witnesses under oath, and examined documents

Civil investigation into Robinhood over failure to disclose its practice of selling clients' orders to high-speed trading firms (payment for order flow) and directing its customers' orders in a way that was in Robinhood's best interest (as opposed to clients' best interest)

$65 million dollar penalty via a consent order

5-7, with one member appointed as chairperson

Senate confirmation

no

to meet responsibilities

presiding officer at meetings, most visible

responsible for the minutes and the records

chief operating officer who supervises administrative functions

chief law officer and legal advisor

setting monetary policy through Federal Reserve Banks
decide on interest rates

perform the adjudicate fact-finding functions
hear cases of alleged law violations and apply the law to the facts

yes, by a court if decisions are appealed

investors lost confidence in the stock market because they felt they couldn't rely on financial statements

Sarbanes Oxley Act

PCAOB

to oversee public accounting firms that review publicly traded companies' financial statements

the SEC to insulate from political pressure

only for cause and by the SEC (not the president)

Beckstead and Watts, LLC after being issued a negative report

limits on removal of board members are unconstitutional because the decision to remove is vested in the SEC commissioners and because the board members cannot be removed except for cause

Demonstrates Congress' ability to enact legislation and create news agencies
Demonstrates how agencies may be organized
Demonstrates that courts can review Congress' delegation to administrative agencies to make sure they are constitutionally valid

standing to sue
review of rule-making
review of adjudications
review of factual determinations

the Federal Administrative Procedures Act

Does the state preclude review?
Is the agency action committed to agency discretion by law?

person suffered legal wrong because of agency action of adversely affected or aggrieved by agency action

biological opinion

adversely impacted the plaintiffs in that they could not draw water out of the reservoir

reversed Ninth Circuit

Is the delegation constitutionally valid?
Has the agency exceeded its authority?

it must be definite
it must be limited

Congress had laws that support tobacco industry and laws that require disclosure of harmful health effects
FDCA delegated authority to regulate drugs, devices, and combinations thereof
FDA started regulating tobacco in 1996

FDA exceeded authority

Congress acted in 2009 to amend FDCA to give express authority to FDA and to regulate tobacco

proceedings by an administrative law judge where they are making determinations about application of law

exhaustion of remedies
primary jurisdiction

court will not review unless the aggrieved party has exhausted all of the administrative remedies and procedures available

applies when a claim is originally filed in court and the resolution of that issue has been placed with the administrative body

EEOC

aggrieved party to follow administrative complaint process and file a complaint with EEOC first

the agency was correct

uphold if the agency findings supported by substantial evidence in the record

regulation increases the cost of doing business
consumer pays indirectly with higher prices
companies create matching internal bureaucracy
time and expense of additional paperwork