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Corporate Governance And The Regulatory Process PowerPoint PPT Presentation


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12. Corporate Governance And The Regulatory Process. Administrative Agencies. Part of Executive Branch (e.g. SEC, EPA, FTC, FCC etc.) Yet Perform Legislative & Judicial Functions Regulations Due Process/Notice Requirements Act according to enabling statutes

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Corporate Governance And The Regulatory Process

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Corporate governance and the regulatory process

12

Corporate Governance And The Regulatory Process


Administrative agencies

Administrative Agencies

  • Part of Executive Branch (e.g. SEC, EPA, FTC, FCC etc.)

  • Yet Perform Legislative & Judicial Functions

  • Regulations

  • Due Process/Notice Requirements

  • Act according to enabling statutes

  • Cannot act in an “arbitrary and capricious” manner

    • Sundance Assoc. v. Reno (Overly broad definition of “producer” in re anti-porn regulation)

  • Under APA


Administrative agencies1

Administrative Agencies

UNITED STATES POSTAL SERVICE v. GREGORY

122 S.Ct. 431 (2001)

FACTS: An employee, Maria Gregory, of the United States Postal Service is disciplined four times for inappropriate behavior. After the first three disciplinary actions, Gregory filed grievances. The fourth disciplinary action resulted in Gregory’s termination. As a military veteran, Gregory’s status as a “preference-eligible employee” allows her to appeal her termination to the Systems Protection Board. The ALJ upheld Gregory’s termination. She appealed to have the full Board review this decision of the ALJ. Prior to the full Board’s final decision, a grievance panel concluded the first disciplinary action against Gregory was unjustified. The full Board refused to consider the outcome of the grievance and confirmed Gregory’s termination. Upon appeal, the Federal Circuit Court of Appeals vacated the Board’s decision and remanded the case with instructions for the Board to consider the outcome of the grievance. The Postal Service sought and was granted certiorari.

  • ISSUE:What standard should courts use when reviewing the decision of an administrative agency?


Administrative agencies2

Administrative Agencies

UNITED STATES POSTAL SERVICE v. GREGORY

122 S.Ct. 431 (2001)

  • HELD:Court must defer to the judgment of the agency unless there is a finding, supported by substantial evidence, that the agency’s action is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.

  • REASONS:1. Administrative agencies, as compared to reviewing courts, are better able to determine findings of fact and conclusions of law.

  • 2. In this case, the Federal Court does not establish the arbitrary, capricious, abuse of discretion conduct by the Systems Protection Board.

  • 3. The Board acknowledges it considers a grievance resulting in disciplinary action being overturned.

  • 4. This case is remanded to the Federal Court to decide whether the Board has reasonably met its standard of review.


Administrative agencies3

Administrative Agencies

  • Create/Enforce Majority Of Business Laws

  • Agencies Provide:

    • Specificity

    • Expertise

    • Protection

    • Regulation

    • Services


Administrative agencies examples

Federal Trade Commission

National Labor Relations Board

Equal Employment Opportunity Commission

Securities & Exchange Commission

Environmental Protection Agency

Federal Aviation Administration

Consumer Product Safety Commission

Federal Communications Commission

Federal Energy Regulatory Commission

Federal Reserve Board

Food & Drug Administration

Nuclear Regulatory Commission

Occupational Safety & Health Administration

Administrative Agencies Examples


Agency functions

Agency Functions

  • Rulemaking/Guidelines = Quasi-Legislative Power

  • Adjudicating = Quasi-Judicial, Fact-Finding & Applying Law

    • Cease & Desist

    • Consent

  • Advising

  • Investigating


Agency organization

Agency Organization


Agency decisions

Agency Decisions

  • Public Notice Of Proposed Rules

  • Public Hearing

  • Citizen Letter Writing- Member Of Congress


Quasi judicial procedures

Quasi-Judicial Procedures

Answer

Respondent

Agency

Complaint

Evidence

Evidence

Admin. Law Judge

Evidence- Admissibility

Motions

Initial Decision

Appeal

30 Days

Final Order


Judicial review of agency decisions standing to sue

JUDICIAL

REVIEW

Judicial Review Of Agency Decisions- Standing To Sue

  • Reviewability- Federal Administrative Procedure Act

  • Plaintiff- Aggrieved Party


Judicial review of agency decisions standing to sue1

Judicial Review Of Agency Decisions- Standing To Sue

  • Members of wildlife conservation and environmental organizations filed a lawsuit against the Secretary of Interior. This suit challenged the Secretary's decision that the Endangered Species Act governed the spending of funds within the boundaries of the United States and not the allocation of funds to be spent in foreign nations. The plaintiffs argued that the government must take into consideration the impact on endangered species of the expenditures of funds in foreign nations. The Secretary argued that the plaintiffs lacked standing to sue. Issue: Do these plaintiffs have the standing to challenge the Secretary's rule making? Held: No. The plaintiffs failed to demonstrate that they suffered an injury in fact. Even assuming that funded activities abroad threaten certain species, the plaintiff failed to show that one or more of their members would thereby be directly affected apart from the members' special interest in the subject. Lujan v. Defenders of Wildlife, 112 S.Ct. 2130 (1992).


Judicial review of agency decisions rule making

RULES

Judicial Review Of Agency Decisions- Rule Making

  • Delegation Valid?

    • Definite- Violate Due Process?

    • Limited- Agency’s Power Limited

  • Broad Language

  • Authority Exceeded?


Review of adjudications procedural aspects

Review Of Adjudications:Procedural Aspects

  • Agency Authority Limited

    • Delegated From Legislature

    • Develop Rules Of Procedure

  • Courts Lack Authority To Substitute For Agency

  • Doctrines

    • Exhaustion Of Remedies

    • Primary Jurisdiction

  • Equal Access To Justice Act


Review of adjudications procedural aspects1

Review Of Adjudications:Procedural Aspects

The Doctrine of Exhaustion of Remedies

REASONS FOR THE DOCTRINE

1. Allows an agency to fully develop and consider the facts of the case

2. Allows an agency to utilize its expertise

3. Allows an aggrieved party to obtain a remedy without judicial review

4. Protects agency processes from impairment by interruption

5. Allows agency to correct own mistakes

6. Conserves judicial time by avoiding piecemeal appeals


Review of adjudications procedural aspects2

Review Of Adjudications:Procedural Aspects

The Doctrine of Exhaustion of Remedies

EXCEPTIONS TO THE DOCTRINE

1.Statute or rule is attacked as unconstitutional on its face

2.Multiple administrative remedies exist and one is exhausted

3.Agency cannot provide an adequate remedy

4.It is clearly useless to seek relief before the agency

5.No issues of fact exist

6.Agency expertise is not involved

7.Irreparable harm will result from pursuit of administrative remedies

8.Agency's jurisdiction is not authorized by statute

9.Limitation under §10(c) of APA when there is a final agency action.


Review of factual determinations

Review Of Factual Determinations

  • Court

    • Presumes Findings Of Fact Correct

    • Analyzes Agency Proceedings

  • Court Does Not

    • Reweigh Evidence

    • Make Independent Determination

    • Substitute Its View For Agency’s


Agency regulation criticisms

Agency Regulation Criticisms

  • Taxation

  • Cost Of Doing Business/Paperwork

  • Consumer Pays

    • Direct Cost

    • Indirect Cost

  • Inhibits Competition

  • Cost/Benefit Analysis


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