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Introduction to Administrative Law
Administrative law concerns the methods by which administrative agencies of the federal and state governments promulgate and enforce regulations. Regulations provide the body of rules surrounding statutory law. This chapter will review the constitutional authority for the creation and functions of administrative agencies. It will explore the nature and organization of agencies, as well as the process by which agencies promulgate and enforce regulations. It will lay out the judiciary’s role in reviewing administrative agency action and court decisions. Lastly, it will examine the effects of regulations on business practice. For further written and video explanation, discussion and practice questions, see Administrative Law (Intro)
What are “Administrative Agencies”?
Federal administrative agencies are bodies impliedly authorized by the US Constitution and created by Congress to enforce statutes and develop regulations in furtherance of those statutes. That is, administrative agencies assist the legislative branch in developing and the executive branch in executing laws. Administrative agencies include departments, agencies, commissions, bureaus, boards, government corporations, and committees. Most administrative agencies fall under the control of the executive branch. There are, however, a few administrative agencies that are directly under the control of Congress, such as the Congressional Budget Office and the Library of Congress. The authority of the President over an administrative agency depends upon the genesis of the agency and whether it is an “executive agency” or “independent agency”. Executive Agencies - The US Constitution establishes the executive branch of the federal government and allows the President to establish employ agencies to carry out the executive function. Executive agencies include all of the departments under the President’s authority. The heads of the executive agencies are cabinet members who report directly to and are closely controlled by the President. The President nominates individuals to these positions and the Senate must approve these nominations by a simple majority vote. The President has complete discretion in removing these individuals from their positions. Independent Agencies - Independent agencies, as the name implies, operate with a degree of independence or autonomy from the executive branch. These agencies are not part of the President’s cabinet; rather, they exist independently pursuant to congressional statute. Congress will pass what is known as an “enabling statute”, that establishes an administrative agency and outlines the extent of the agency’s authority. Executive and independent agencies carry on similar functions; however, an independent agency generally has more of a regulatory function, where an executive agency plays more of an enforcement role. For further written and video explanation, discussion and practice questions, see What are Administrative Agencies?
What are the functions of Agencies?
Administrative agencies serve “executive”, “quasi-legislative”, and “quasi-judicial” functions. As part of the regulatory process, Congress passes statutes to establish new law. The statutes, along with direction in the form of an “enabling statute”, are then turned over to administrative agencies to develop rules and regulations that further the objectives of the statutes. As such, while Congress dictates the objectives and substantive laws, the administrative agency assumes the regulatory activity of developing procedural rules for enforcing the law. This is the quasi-legislative, agency function. The statutes themselves are broad in nature, while the rules and regulations developed by administrative agencies are more specific. Disputes between the agency and those subject to regulation often arise when enforcing the substantive statutes and procedural regulations. As such, the agency may develop a tribunal or administrative law body that adjudicates these disputes. This is the quasi-judicial, agency function. Lastly, the agency carries out an executive function by carrying out or enforcing the statutory laws. To learn more about these functions, and for further written and video explanation, discussion and practice questions, see What are the functions of agencies?
Where do Agencies get Authority?
The Constitution is silent with regard to the creation of administrative agencies. Congress passes statutes authorizing the creation of administrative agencies. The statutes are known as, “enabling statutes”. Congress’s authority to create agencies is inferred from its role as legislator. The ability of the executive branch to oversee the operations of administrative agencies is inferred from its responsibility to execute the laws of the United States. The authority to vest quasi-legislative and quasi-judicial authority in the administrative agencies has come under attack at various points in history. The US Supreme Court has reviewed these allocations in a number of situations and generally deemed the allocation of authority valid. Congress maintains the authority to control and limit agency authority. Further, Congress can pass statutes that criminalize activities regulated by agencies. Enforcement of such statutes would necessarily be the role of the executive branch, while determination of challenges to these statutes would be the role of the judicial branch. To learn more about the delegation of legislative and judicial functions, and for further written and video explanation, discussion and practice questions, see What is the authority for Administrative Agencies?
How are Agencies Organized?
An administrative agency is organized differently depending upon whether it is an executive or independent agency and whether the function is quasi-legislative, executive, or quasi-judicial. Executive Agencies - An executive agency falls under the supervision of a member of the President’s cabinet. As such, a single individual (director or secretary) sits at the head of the agency. The director will generally act as the senior executive administering the agency. The director will appoint subordinate officers and authorize the hiring of agency staff. Independent Agencies - Independent agencies generally have a controlling board or commission that governs the agency. The board will generally consist of 5 to 7 members, one of whom is the chair. The chairperson has the power to appoint staff for the agency. The agency board will serve a high-level governance function. It will appoint or elect an executive director for administration as the chief operating official of the agency. The executive director supervises administrative functions, such as personnel matters and budgeting. Outside of the leadership and governance structure, the operational structure of most agencies is similar. The agency secretary keeps board-meeting minutes and is in charge of all agency publication requirements. The structure of the agency may be centralized or it may have various regional offices. Regulatory administrative agencies generally have regional offices that investigate alleged violations of the law. Agencies may also establish advisory councils. The advisory councils are made up of agency outsiders who are selected because of their expertise. They provide a level of interaction between the regulators and those being regulated. The quasi-judicial staff within an administrative agency generally consists of numerous administrative law judges and their support personnel. For further written and video explanation, discussion and practice questions, see How are administrative Agencies Organized?
Appoint and Remove Agency Personnel
In both executive and independent administrative agencies, the President has the authority to nominate the governing personnel (directors, secretaries, boards, commissioners, etc.) for appointment and to remove those individuals. Appointment of Administrative Agency Officials - Following nomination for appointment by the President, the Senate must vote to confirm the nominee. Congress cannot take part in the appointment process outside of providing advice about the nomination during the confirmation hearing. To keep the key personnel somewhat independent of the President, the individuals generally serve staggered terms that are longer than the President’s 4-year term. This prevents the sitting President from appointing all of the leadership of an agency at one time. Further, federal statutes often require that the governing board or commission of independent agencies be bipartisan, with a certain number of individuals coming from outside of the President’s political party. Removal of Administrative Agency Officials - The President generally has the authority to remove key leaders from administrative agencies. While the President’s authority to remove individuals from executive agencies is unlimited, there may be any number of limitations on the ability to remove members of independent agencies. For instance, Congress may pass a statute limiting this authority. These statutes normally require proof of incapacity, neglect of duty, malfeasance, or good cause before the President can remove an official. This is particularly true if the agency primarily serves a regulatory function. Congress may also reserve the ability to vote to remove an independent administrative official. This authority is limited by the function of the agency. If the independent agency exercises any executive powers, such as enforcement or statutes, Congress cannot take part in removing the agent. If Congress wants to remove an agency official acting in an executive capacity (any of the heads of executive agencies), it must initiate impeachment proceedings. For further written and video explanation, discussion and practice questions, see How are key agency personnel appointed and removed?
How Agencies Create Regulations
The quasi-legislative process by which administrative agencies create regulations is “formal”, “informal” or “hybrid”. Formal rulemaking generally proceeds as follows: Public Announcement - The agency develops a proposed regulation and announces the rule or regulation to the public. Public Comment - Following the announcement of the new regulations, the administrative agency allows for public comment on the regulation. Individuals may write letters, enter comments on the website, and speak at an open public forum regarding the proposed regulation. At the public hearing, interested parties are allowed to present evidence in support of, or in opposition to, a proposed rule or regulation. Final Rulemaking - The agency will take public comment and incorporate those comments into a final draft of the regulation. If the proposed regulation garners much public interest, Congress will seek a report or explanation of actions from the agency. The informal rulemaking process does not require a hearing. The hybrid procedure requires a hearing, but the process is less detailed than the formal process. For further written and video explanation, discussion and practice questions, see How do agencies create regulations?
Judicial Review of Agency Regulations
Individuals may challenge an administrative action in an Article III court. Generally, a judicial challenge to administrative rulemaking must be a challenge to the procedures followed by the agency. Per administrative procedure, the agency must propose rules within the the express grant of authority from the legislature. Exceeding the scope of authority may result in a court finding the proposal void. Once the court decides that a rule of an agency is authorized and constitutional, it will not address the wisdom or effectiveness of the rule. The court will review the constitutionality of the delegation of authority based upon the following: Definiteness - The delegation of authority to the administrative agency by Congress must be set forth with sufficient clarity so that all concerned, especially reviewing courts, will be able to determine the extent of the agency’s authority. Limited - An executive or legislative delegation of authority must be limited. The delegating authority must provide in the enabling statute or the agency’s charge that its power is limited - though it does not have to specifically outline those limitations. These authorities must take steps to implement procedural safeguards to prevent any arbitrary or abusive practices by the agency. Regardless of the purpose of effect, courts will hold that an agency exceeds its authority if an analysis of legislative intent confirms that the agency has gone beyond that intent. For further written and video explanation, discussion and practice questions, see What is the Judiciarys authority to review rulemaking?
Judicial Review of Administrative Court Decisions
The judiciary has power to review agency decisions pursuant to either the procedures written into the delegating statute or pursuant to the Administrative Procedures Act (APA). To learn more about: Review Under the EPA, Standing, Exhaustion of Remedies, Issues of Jurisdiction, Review of Facts, and Standard of review, or for further written and video explanation, discussion and practice questions, see What is the Judiciarys authority to review administrative court decisions?
Advantages of Administrative Agencies
Delegating regulatory and executive authority to administrative agencies has numerous advantages: Exactness - Congress cannot effectively pass statutes that are sufficiently detailed to regulate an entire subject matter. While laws provide a general outline for regulation, the agency rules and regulations make the statutory law more exact. More specifically, the agencies fill any gaps that exist in the statutory law. Expertise - Administrative agencies generally employ officials who are subject-matter experts in the given areas of regulation. As such, they are often more efficient and effective in developing rules and regulations to govern conduct in the specific area. Their expertise also provides thoroughness and consistency in the development and enforcement of business regulations. Lastly, employing such individuals to make quasi-judicial decisions about disputes avoids relying on individuals who are unfamiliar with the subject. Public Protection - Agencies often exist to regulate an area of conduct in a manner that protects the public interest. Individuals and businesses do not always act in accord with the public interest. All of these advantages relate to efficiency, effectiveness, and the public interest. While administrative procedures are often burdensome, agencies allow for the administration of an extremely large and complex system of regulations. For further written and video explanation, discussion and practice questions, see What are the advantages of administrative agencies?
Disadvantages of Administrative Agencies
While administrative agencies provide the above-stated benefits, there are numerous disadvantages to relying on the agencies in the rule-making and adjudicative process. Foremost among the disadvantages, administrative agencies are famous for adding a degree of bureaucracy to regulated activities. Complying with additional regulations and the procedures raises the cost of doing business. These higher costs are born by the government, businesses, and consumers. For further written and video explanation, discussion and practice questions, see What are the disadvantages of administrative agencies?
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