Administrative Law

Although many people are familiar with the United States judicial court system, many laws and binding legal decisions come from both state and federal administrative agencies. Administrative agencies can be basically defined as official government bodies that have the power and authority to direct, supervise, and implement certain legislative acts or statutes. Not all administrative agencies have the term “agency” in the title. Many are referred to as boards, departments, divisions, or commissions.

There are a number of ways that administrative agencies are created. At the federal level, Congress and the president have the authority to establish administrative agencies and to vest them with certain powers. An agency that is established by the president is referred to as an executive agency, while agencies established by an act of Congress are referred to as independent agencies. Overall, there are very few differences between executive and independent agencies. The primary difference between an executive agency and an independent agency is that Congress typically restricts the president from removing the head of an independent agency without just cause. The heads of executive agencies serve at the will of the president and can be removed at any time.

Some of the most widely known federal administrative agencies include the United States Department of Agriculture, the Federal Food and Drug Administration, and the Department of Justice. At the state level, agencies are created in the same way and typically mirror some of the key federal agencies. For example, the federal government established the Occupational Health and Safety Administration, and almost every state has established some agency dedicated to matters involving occupational health and safety.

How Administrative Agencies Create Laws

In 1947, Congress adopted the Administrative Procedures Act (“APA”), which governs the process by which administrative agencies create and enact laws. The Act was implemented in order to ensure that the public has adequate notice of proposed laws, that there is an opportunity to comment on the proposed law, and that there are clear standards for agency rulemaking. The APA also specifies when courts may review and nullify administrative agency rules and provides standards for any administrative hearings that are conducted.

Federal agencies—both executive and independent—have to follow the rulemaking procedures outlined in the APA. First, the agency must publish a proposed rule in the Federal Register and give the public at least 45 days to review the rule and submit a public comment if they choose. Public comments can either oppose or support the proposed rule and can be submitted by virtually anyone, including individuals, companies, and interest groups. During this period, the agency has the option of conducting a public hearing on the proposed rule. If the agency does not hold a hearing, however, an interested party can submit a written request for a hearing at least 15 days before the close of the public review period. The agency reviews the comments and considers whether to make any changes to the proposed law. Depending on how drastic the change to the rule is, the agency may be required to allow the public 15 days to review and comment on the amended version. This cycle may happen a few times before the rule reaches its nearly final form. The APA requires agencies to summarize and respond to each public comment, and each comment is made available to the public as part of the rulemaking record.

The agency must send its proposed rule to the Office of Administrative Law (“OAL”), which oversees all rulemaking activities of federal agencies, within one year from the date the proposed rule was first released to the public. OAL reviews the law and the procedures the agency utilized to determine whether they complied with the APA. If the OAL determines that the agency followed the APA appropriately, the agency can complete the process and publish a final rule, which is then printed in the Federal Register and the official Code of Federal Regulations.

Challenging Administrative Decisions

Most administrative agencies have the power to enforce and adjudicate the laws that they create. Typically, enforcement proceedings resemble courtroom practices and procedures in which the parties must present evidence and argue their case. The decisions of administrative enforcement proceedings create a body of administrative law much like judicial court opinions.

According to the APA, a party wishing to challenge an agency’s determination can ultimately appeal the decision to a court within the judicial branch for review. To appeal the decision to a judicial court, however, the party seeking review must exhaust any administrative appeal procedures made available to that party by the agency and the APA. This process is designed to create sufficient checks and balances between the three branches of government.

Courts use different standards of review to evaluate administrative agency laws. The standard of review determines the amount of deference that the court gives to the administrative agency that created the rule. When reviewing an administrative decision, the court will consider whether the agency’s action was arbitrary and capricious, or an abuse of discretion.

Featured CasesFeed

  • <br><br> On August 17, 2017, petitioner, New Jersey Motor Vehicle Commission (MVC), proposed to suspend the New Jersey driving privileges of respondent, Shawn P. Curry, for 690 days (twenty-three months), pursuant to N.J.S.A. 39:5-30. The MVC administratively alleged that a violation of N.J.S.A. 39:4-129a, Leaving the Scene of an Accident, N.J.S.A. 39:4-130, Failure to Report an Accident, contributed to the death of Michael H. Shimanek.
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  • Escala shareholders sued financial institutions that engage in equity trading, alleging that the defendants participated in "naked" short selling of Escala stock, which "increased the pool of tradable shares by electronically manufacturing fictitious and unauthorized phantom shares." Plaintiffs claim dilution of voting rights and decline in value. All claims were under New Jersey law: the New Jersey Racketeer Influenced and Corrupt Organizations Act, based on predicate acts of state securities fraud and theft, and common law claims for unjust enrichment, interference with economic advantage and contractual relations, breach of contract, breach of the covenant of good faith and fair dealing, and negligence. The district court denied Plaintiffs' motion to remand to state court. The Third Circuit reversed, holding that there is no federal-question jurisdiction. Short sales are subject to detailed federal regulation. New Jersey does not have an analogous provision, but whether the naked short selling at issue violated state law requires no reference to federal regulation SHO. The success of those claims does not "necessarily" depend upon federal law, so the case does not "arise under" the laws of the United States. Regulation SHO's exclusive jurisdiction provision does not change the analysis; such provisions cannot independently generate jurisdiction. View "Manning v. Merrill Lynch Pierce Fenner & Smith, Inc." on Justia Law