LEGL Chapter 15

Describes the boards, bureaus, commissions, and organizations that make up the governmental bureaucracy.

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An agency can issue rules (regulations) that have the impact of laws.

The agencies can make decisions like a court.

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Legislative branches often cannot legislate in sufficient detail to cover all aspects of many problems. Congress cannot possibly legislate in minute detail, and, as a consequence, it uses more and more general language in stating its regulatory aims and purposes.

Many agencies are created to refer a problem or area to experts for solution and management.
The Federal Reserve Board (FRB), the Nuclear Regulatory Commission (NRC), and the Food and Drug Administration (FDA), are examples of agencies with expertise beyond that of Congress of the executive branch.
The development of sound policies and proper decisions in many areas requires expertise.

Many governmental agencies exist to protect the public, especially from the business community. Business often fails to regulate itself, and the lack of self-regulation is contrary to the public interest.

Agencies often replace competition with regulation.
When a firm is given monopoly power, it loses its freedom of contract, and a governmental body is given the power to determine the provisions of its contracts.

Many agencies arise simply out of necessity. If we are to have a mail service, a post office is necessary.
Welfare programs require government personnel to administer them.
The Affordable Care Act created and authorized dozens on new entities to implement the legislation, providing a recent example of how Congress relies on regulatory bodies to fulfill legislative mandates.

Agencies exercise their quasi-legislative power by issuing rules and regulations that have the force and effect of law. Because of the vast volume of rules and regulations, many business organizations struggle to know all the legal requirements.
The Federal Trade Commission and the Justice Department have guidelines to help determine which mergers are legal and which ones are likely to be challenged as illegal.

Ex: Occupational Safety and Health Administrative (OSHA) rules may cover anyone's workplace, or a rule may be drafted so that its coverage is limited to an industry such as drug manufacturing.

These guidelines are administrative interpretations of the statutes that an agency is responsible for enforcing.
They often help businesses determine whether certain practices may or may not be viewed as legal.
They do not have the same force of law as rules and regulations do.

The quasi-judicial function involves both fact-finding and applying law to the facts. If violations of the law are found, sanctions, such as a fine or other penalty, may be imposed.

This may be punishable by fines, which can be as much as $10,000 per day.

The advisory function of an administrative agency may be accomplished by making reports to the president or to Congress.
Ex: An agency may propose new legislation to Congress, or it may inform the attorney general of the need for judicial action due to violations of the law.

Ex: A commission may give advice as to whether a firm's proposed course of action might violate any of the laws that commission administers.

One of the major functions of all agencies is to investigate activities and practices that may be legal.
Because of this, agencies can gather and compile information concerning the organizations and business practices of any corporation or industry engaged in commerce to determine whether there had been a violation of any law.

Administrative agencies, boards, or commissions usually consist of five to seven members, one of whom is appointed as chair.
Laws creating the regulatory body usually specify that no more than a simple majority of the members may belong to the same political party.

Any party seeking the judicial review of any administrative agency's decision must be able to prove standing to sue. To establish standing, the challenging party must address two issues.

Not all administrative decision are reviewable. The Federal Administrative Procedure Act provides for judicial review except where:
1. Statutes preclude judicial review or
2. Agency action in committed to agency discretion by law

Generally, the plaintiff must have been harmed by an administrative action or decision to have standing. It is clear that persons who may suffer economic loss due to an agency's action have standing to sue.

The rule-making function in the administrative process is essentially legislative.
An administrative agency must propose rules and regulations within the confines of its grant of power from the legislature, or a court will find the proposal void.
However, once courts decide that an act of the legislature is constitutional, or a rule of an agency is authorized, the courts will not inquire into its wisdom or effectiveness.

Thousands of premature births each year due to tobacco use.
The FDCA grants the FDA the authority to regulate, among other items, drugs and devices.
The FDA promulgated regulations concerning tobacco products' promotion, labeling, and accessibility to children and adolescents.

The doctrine of exhaustion of remedies is a court-created rule that limits when courts can review administrative decisions. Courts refuse to review administrative actions until a complaining party has exhausted all of the administrative remedies and procedures available to him or her for redress. Judicial review is available only for final actions by an agency.

A doctrine similar to exhaustion of remedies is known as primary jurisdiction.
Exhaustion applies when a claim must go in the first instance to an administrative agency alone. Primary jurisdiction applies when a claim is originally filed in the courts.

1. Reweigh the evidence
2. Make independent determinations of fact
3. Substitute their view of the evidence for that of the agency

Government has difficulty in hiring and retaining the best-qualified people.
The reward system usually does not make a significant distinction between excellent, mediocre, and poor performances.
It is very difficult, if not impossible, to discharge unsatisfactory employees.
Personnel in many top positions are selected for political reasons.

Regulation is a form of taxation. It directly increases the cost of government.
These direct costs of regulation are only a small fraction of the indirect costs. Regulation significantly adds to the cost of doing business, and these costs are passed on to the tax-paying, consuming public.

Government has tended only to assess the benefits accruing from a cleaner environment, safer products, healthier working conditions, and so on, in deciding to embark upon vast new regulatory programs.
The primary focus of policymaking by way of such social regulation has not been on balancing the costs of the programs with their potential benefits.