Chapter 6 Flashcards
Why were Agencies created?
- business became too complex
- Government could not oversee everything
First Agency created ever was?
Interstate Commerce Commission
What were the 3 Eras of agencies
Historical 1887 to 1932
- regulated specific industries
- railroads, Drug Companies, Securities
New Deal
-Franklin D. Roosevelt’s Administration
-created many diff agencies
to get out of Great Depression
Socially Conscious 1960s and 1970s
- product safety
- pollution control
- hiring/firing processes
- workplace safety
Goal of Agencies
- want to better Industry/companies
- NOT public interest
- Usually run by experts in business industry
- leads to bias
FTC regulates what? In what era was it established?
Federal Trade Commissions
- regulate advertising
- created during Historical Era
NLRB regulates what? In what era was it established?
National Labor Relations Board
- regulates management of companies in industries
- created during New Deal Agency
What are the 4 Types of Federal Bureaucratic Agencies?
Executive Agencies
Independent Executive Agencies
Independent Regulatory Agencies
Government Corporations
Executive Agencies
- created by Executive Order by President
- under Executive branch
- answer directly to president
- one person in charge (head)
EX: Department of Labor
Independent Executive Agencies
- executive branch
- don’t answer directly to president
EX: NASA, EPA
Independent Agencies
- Created by congress
- members appointed by President
- advice and consent by congress
- appointed for terms
- CAN’T be dominated by only one political party
Schechter Poultry Corp. v. United States
- New Deal Era
- said FDR giving Agencies legislative powers was unconstitutional
- FDR was pissed
Yakus v. United States
- declares giving legislative powers to Agencies is constitutional
- reverses Schechter Poultry Corp. V. United States
Administrative Procedures Act (APA)
- set standard of rules for agencies to follow
- made more uniform
What is an Enabling Statue?
- Basically mission statement of an agency
- gives powers to create legislation
- is broad to create flexibility in powers
Informal Rule-Making process of an Agency
Agency defines need
- by public demand
- by congressional mandate
- by industry request
Agency announces rough draft of Proposed rule
Prints proposed rule in Federal Register
- required by APA
- public can comment on it for 30 days
- can revise/ignore
Final Draft of Rule published in Federal Register
-takes effect in 30 days
Formal Rule-Making Process of an Agency
Agency defines need for a rule
Proposed Rule is announced
Proposed Rule printed in Federal Register
- hearing time
- date
- time
- place
- must describe issue and people involvedd
Formal trial
- is of record
- can have witness and cross examination of witnesses
- interested party(affected party) can delay or draw out approval of rule
Informal Rule-Making V.S. Formal Rule-Making
Formal Rule Making -required for substantive rules -mandated by APA Informal Rule Making -required for procedural rules
4 types of Investigatory Powers of Agencies
Require Businesses to self report
Hold Hearing
Physical Inspection of Businesses
- may/may not need warrant
- warrants are not probable cause warrants
Subpoena Power
Dow Chemical Co. V. United States
- EPA wants to search Dow Chemical but they say no
- EPA hires photographer to take pictures instead
- “Open Fields Doctrine” allows them and doesn’t violate 4th amendment
- Photographer used equipment that was available to the public
4th Amendment and Agencies searching businesses?
- 4th amendment relaxed
- only need legitimate government interest
- some business require no warrant (EX: liquor stores)
What are the two things that constitute legitimate government interest in order for an agency to search a business?
- Violation of Rule or Regulation
- Valid Public Interest
2 Types of Enforcement powers of an Agency
Threat of Public Exposure
-informal method
EX: EPA shows public how you make suasage to sell
Fines
- violater can appeal fine
- Agency can appeal to Federal District Court
- Agency gets court order to comply with fine regarding violater
- if violater still reffuses…. then criminal charges
Explain Adjudicatory Powers and Procedures of Agency
- controversial power of Agency
- is court system for agencies
- Administrative Law Judge (ALJ) conducts hearing
- ALJ is employee of agency (potential conflict of interest)
- ALJ pride themselves on being “independent but not really the case
- just like regular court with witnesses and all that BUT
- no right to attorney if cannot afford one
- no jury
Can someone appeal after the Administrative Law Judge’s opinion?
- can appeal to review board of Agency
- after that, losing party can appeal to U.S. Court of Appeals
-Final Ruling sets Precedent
(sometimes used to set a rule without having to go through whole rule making processes)
4 Benefits to Regulation of business by Agencies?
Free Market System
-regulation allocates resources efficiently
Takes burden of 3 branches of Government
Used to handle politically sensitive issues Congress doesn’t want to deal with
Leads to Specialization by hiring experts in their fields
- EPA biologists and chemists
- FTC economists
- FAA aeronautical engineers
Cost of Regulation by Agencies
- used cost-benefit analysis (do costs outweigh benefits)
- hard to value benefits efficiently
- rules cost lots of money
Criticisms to Agencies
Bureaucratic workers are lazy
Adjudication Processes disatisfaction
Agencies are too fast/slow to act on things
Have outlived usefulness
Agencies act to protect businesses and not public
Freedom of Information Act
-Agencies must make all information known to any person who asks for it
- can refuse under several exceptions
- agency can be forced to disclose information
Government Sunshine Act? What are it’s exceptions
- applies to agencies headed by two or more people appointed by president
- must hold “every portion of every meeting” out in the open
EXCEPTIONS
- day to day activities don’t apply
- agency can close a meeting by majority vote
- decision is reviewed by U.S. District Court
Regulatory Flexibility Act
- if agency is about to pass rule/regulation affecting many businesses
- then must measure costs to business
- consider less burdensome ways to solve problem
- must alert business before they pass rule/regulation
Small Businesses Regulatory Enforcement Fairness Act (SBRERA)
- allows congress to review regulation 60 days prior to it’s effective date
- more time for adversaries to present arguments
- more time for adversaries to fight regulation
Sunset Laws
- state laws NOT federal laws
- set time for agencies to “expire” and no longer have any authority/power
- agency must convince Texas Legislature it is doing what is necessary to live on
The Food, Drug and Cosmetic Act of 1938
- Requires FDA approval to sell product
- have to prove drug is safe before you can sell
- required some drugs to only be given with Doctor Prescription
Kefauver-Harris Amendments 1962
- was an amendment to the Food, Drug, and Cosmetic Act
- says drug now has to be safe in order to be approved by FDA
- made manufacters of drug prove effectiveness of drugs and list side effects
Drug Abuse Control Amendments
- gave government more control over amphetamines, barbiturates, hallucinogens
- lead to creation of DEA
Delaney Clause
- zero-risk tolerance standard
- said product couldn’t be sold if it even caused cancer a little bit
- very strict, covers lots of products
Saccharin and the Delaney Clause
- FDA banned Saccharin for causing cancer
- Congress overruled and allows it to be sold
- Led to Nutrition Labeling and Education Act
- revolutionized FDA requirement standards of nutritional information
- allows some things that cause cancer if you do waaayyy too much
What did the Food, Drug and Cosmetic Act of 1938 do?
Expanded power of FDA to:
- cosmetics
- therapeutic devices
Gave new enforcement powers
-injunctions
FDA is a subdivision of ____
Department of Health and Human Services
How is FDA organized
Has an Office of Commissioner
4 offices answer to Commissioner
- Chief Counsel
- Attorney for the FDA
- Office of Chief Scientists (give expertise)
- Office of the Counselor to the Commissioner (gives leadership during crisis)
What are the 4 subparts of the Office of the Commissioner
Medical Products and Tobacco
Foods
Global Regulatory Operations and Policy
Operations
FDA regulates a lot of things, including veterinary products, electronic products, vaccines, and blood products.
What 2 things does it share regulation in and with whom?
Pesticides
- share regulation with EPA
- share regulation with USDA
Drinking Water
- FDA develops label
- EPA sets national standards
Explain the process after you send in a Complaint to the FDA
FDA responds immediately
-contacts complainer or complained about company
FDA investigator goes to company
- observes
- ask questions
- some industries have detailed manual how to carry out investigation
FDA publishes report to public
-part of Freedom Informations Act
Company can respond
- within 15 days
- only if bad stuff was discovered
Enforcement
- injunction
- recall
- fines, etc.
True or False:
Companies usually do a voluntary recall to avoid liability and before matters get worse.
True
Food Safety Modernization Act 2011 (FSMA)
- shift from defensive to offensive
- try to identify potential outbreaks before they happen
- prevent contamination of food supply
Food Additives Amendment to the Food Drug and Cosmetic Act of 1938
- called Delaney Clause
- prevents additives shown to cause cancer
- manufacturer had to prove safe
- zero-risk tolerance
ONLY Exception was GRAS (Generally Recognized as Safe)
Food Quality Protection Act (FQPA)
- eliminated zero-risk tolerance standard
- new “reasonably certain of no harm standard”
- expand FDA jurisdiction to over 9,000 pesticides
Fair Packaging and Labeling Act 1966
- applies to interstate commerce products
- label had to be honest
- label had to be informative
- no standard serving size
- confusing words reg. ppl don’t know
