CHAPTER 7 Administrative Agencies Administrative Agencies describes the boards bureaus commissions and organizations that make up the governmental bureaucracy I Reasons for Agencies Agencies are apart of the executive branch but created by the legislative branch A Delegate Legislative and Judicial Functions Congress cannot enact a securities law that covers every possible issue that might arise There for it delegates to the Securities and Exchange Commission the power to make rules and regulations to fill in the gaps and create the necessary details to make securities laws workable Also courts cannot handle all disputes and controversies that may arise For example workers compensation boards decide such claims Likewise most cases involved alleged discrimination in employment turned over to agencies for investigation and resolution B Expertise in Developing an Area of Law the Federal Reserve Board FRB the Nuclear Regulator Commission NRC and the Food and Drug Administration FDA are examples of agencies with expertise beyond that of Congress or the executive branch The development of sound policies and proper decisions in many areas requires expertise and thus we tend to resort to administrative agencies for this expertise C Protection Protect the public Business often fails to regulate itself and the lack of self regulation is contrary to the public interest For example the failure of business to voluntarily refrain from polluting many streams and rivers as well as the air led to the creation of the Environmental Protection Agency EPA The sale of worthless securities to the investigating public was a major reason for the creation of the Securities and Exchange Commission SEC The manufacture and sale of dangerous products led to the creation for the Consumer Product Safety Commission CPSC Government s duty is to protect the public from harm D Regulation Equalization of Competition Among Businesses 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 For example electric utility companies are usually given a monopoly in the geographic area which they serve A state agency such as a public service commission then has the power to set the rate structure for the utility Similar agencies regulate transportation and banking because of the difference in bargaining power between the business and the public Regulation is often a substitute for competition E Necessity purpose of the agencies Execute the idea 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 Social security programs necessitate that there be a federal agency to determine eligibility and pay benefits The mere existence of most government programs automatically cerates a new agency or expands the functions of an existing one II Formation of Agencies A Enabling Acts purpose of the agencies creates agency what purpose is By enabling legislation which usually specifies the name composition and the powers of the agency 1 Statement of Agency s Purpose 2 Scope of Agency s Authority Established 3 Part of the Executive Branch of Government III Functions of Agencies administrative agencies tend to possess functions of the other three branches of government including rule making adjudicating advising investigating A Quasi legislative Function in that an agency can issue rules regulations that have the impact of laws 1 Rules and Regulations affect legal rights through statues This authority is an exception to the general principle that laws affecting rights should be passed only by elected law makers Agencies exercise their quasi legislative power by issuing rules and regulations that have the force and effect of law Rules and regulations may apply to a business practice irrespective of the industry involved or they may apply only to an industry For example Occupational Safety and Health Administrative OHSA 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 2 Guidelines guidelines help businesses determine whether certain practices may or may not be viewed as legal These guidelines do not have the same force of law as rules and regulations do Legislature cannot delegate its essential lawmaking powers to any other department However it may delegate quasi legislative powers to an administrative agency to carry out legislative objectives provided that the delegation has sufficient guidelines B Quasi judicial Function in that agencies can make decisions like a court Involves both finding and applying laws to the fact no juries private civil cases Administrative Law judges 1 Agency Procedural Law each agency has their own procedural law 2 Burden of Proof lowest civil burden 3 Procedural Aspects Legislatures have delegated authority to agencies because of their expertise and knowledge and courts usually exercise restraint and resolve doubtful issues in favor of an agency Administrative agencies are frequently called upon to interpret the statute of governing a agency and an agency s construction is persuasive to courts Administrative agencies develop their own rules of procedure unless mandated otherwise by an act of the legislature To proceed expeditiously usually means for the Example that administrative agencies are not restricted by the strict rules of evidence used by courts Such agencies cannot ignore all rules but they can use some leeway The principle that federal administration agencies should be free to fashion their own rules of procedure and pursue methods of inquiry permitting them to discharge their duties grows out of the view that administrative agencies and administrators will be familiar with the industries they regulate 4 Remedies 5 Appeals a Exhaustion of Remedies Doctrine is a court created rule that limits when courts can review administrative decisions Exhaust all levels of appeal in agencies first levels 1 9 The doctrine of exhaustion of remedies avoids the premature interruption of the administrative process 6 Equal Access to Justice Act 1982 if you are individual with minimal assets and you can prove agency wasn t substantially justified then Uncle Sam or the government will pay you This act looks great on paper but people fairly see a return C Advising Function the
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