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ECU FINA 2244 - Chapter 17 Outline

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Chapter 17The Regulatory ProcessI. Administrative Agencies Pg. 469A. Purpose: assist the Government in performing regulatory functions, “4th Branch”B. History: Interstate Commerce Commission 1887 for issues relating to railroad, progressive reformers created FDA, created under congress and Richard Nixon, New agencies in recent years, Consumer Financial Protection Bureau created by Dod Frank Act in 2010 in Federal Reserve with many tasksC. Creation1. enabling statute: Created by Legislative Branch, gives the agencyto power to formulate, implement, and enforce policy 2. reasons for creation: Provide intense detailed supervision for congress and expertise to bring in scientists to government D. Powers: Legislative power to make rules, investigative power to obtain info for compliance, adjudicatory power to resolve disputes and violations,enforcement to impose sanctions and punishmentII. Administrative Law Pg. 470A. Definition: Legal rules that define authority of agenciesB. Sources: Enabling statutes, rules of agencies court decisions ruling validityof actionsC. The APA: Administrative procedure act of 1946 that defines procedural rules for federal agencies, states have their own state level APA like NCIII. RulemakingA. Definition: Process by which an agency develops rules and policies, decisions, standards, guidelines, or opinionsB. TerminologyC. Types of Rules Pg. 4711. Substantive rules: Answer the question what must we do, same force of law by statutes. Must have public notice2. Interpretative rules: Answer the question how the agency will handle the situation, provides guidance, may be challenged by a party3. Procedural rules: How the agency will operate, structure, internalpracticesD. The Rulemaking Process: Drafted by agency staffed, revised, approved by agency, approved in federal register, open for 60-90 days, public hearings, final rule E. Appeals: Agency to itself, then to US Court of Appeals – Chevron: Has congress spoken about the issue, if so congress controls, if statute is silent,is it based upon permissible construction of the statute, if so the courtcannot substitute, agency must not be arbitrary, capricious, or manifestly contrary to the stature. Courts may step in the Tread Act and Organic foods act. The Federal Agency is checked and contradicts the language of Congress or exceed authority Pg. 472IV. Enforcing Rules Pg. 473A. Investigative Powers: How to obtain information1. Monitoring and self-reporting: Business report own behavior2. Direct observation: sight inspection, testing by scientists, and open field operation where the public has access3. Subpoena power: Legal instrument that directs the recipient to provide testimony and or provide documentsB. Enforcement Powers Pg. 4751. Civil & criminal penalties: Us Attorney General 2. Sanctions (7 types):3. Informal agency procedures: Work with citizens, testing, paperwork, advice, advisory opinions, negotiating, and settling4. Formal agency procedures: If no settlement is reacheda. adjudicatory hearings: similar to trials, written complaint, served on the business and may respond, investigation, hearing before judge, written opinion, may appeal decision, may appealto federal court i. processii. appeal 5. Black Beauty Coal Company: C. Judicial Review Pg. 4791. Definition: External check by Court on an agency so they do not abuse power2. Requirements For Reviewa. Jurisdiction: Court Authority to hear a case, specified by statute, may not have authorityb. Reviewability: Must follow rules and procedures and has exceeded its objectives. Sometimes prohibited by statute. Or Discretion such as foreign policyc. Standing: Requirement in every case, you are a party in the case and have a direct stake in a real dispute, no hypothetical questions, a party who can show some injury recognized by law. Disagreement is not enough (Summer) - Summersd. Ripeness: Agency act must be final in order to reviewede. Exhaustion: Party must complete all agency appeals proceduresbefore turning to a court for judicial review3. Scope of Review: How will the court treat the agency before ita. Substantive determination: scientific judgment, Yield to the agency’s judgment, looks to see if there is an abuse of discretion, agency’s decision may be upheld if sufficiently explained and a reasonable person can reach the same decisionb. Statutory interpretation: More searching, c. Procedural requirements: Court ensures the agency hasn’t worked unfairlyV. Controls on Agencies Pg. 484A. Direct Controls1. Congress: Requires agency to report on activities, oversight hearing to explain themselves and federal purse strings 2. The President: Can use executive orders to instruct agencies to undertake certain activities. Lyndon B. Johnson executive order 11246 in 1965, government contractors must adopt affirmative actions, 3. Cost-benefit analysis: Agencies must weigh cost and benefits, B. Indirect Controls1. FOIA: Freedom of Information Act, Documents by federal agencies are available to the public except national security, tradesecrets, and personal privacy upon request2. Government in the Sunshine Act: Limits the agencies ability to hold secrets meetings, must be known a week in advance, must said if it is open or disclosed unless trade secretes or financial information is


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