Part 11- Regulation of Business, Chapter 47: Administrative Law, Doc 3

Summary of Key Concepts: 1. Department of Homeland Security (DHS) Creation     In 2002, Congress created the Department of Homeland Security (DHS), following the September 11 attacks. It integrated over 20 different functions from various federal agencies. The DHS is a large agency, employing about 170,000 workers, many of whom were transferred from other agencies. This restructuring represented one of the most significant government reorganizations in decades. 2. Agency Organization   The Federal Trade Commission (FTC) is divided into three bureaus: o Bureau of Competition: Enforces antitrust laws. o Bureau of Consumer Protection: Handles unfair trade practices. o Bureau of Economics: Collects data and provides technical assistance. The FTC also has regional offices across the U.S. to help with its investigative, educational, and enforcement activities. 3. Powers of Administrative Agencies   Agencies like the FTC possess discretionary powers: o Investigative Power: Allows agencies to gather information. o Rulemaking Power: Enables agencies to create rules. o Adjudicatory Power: Allows agencies to make legal decisions in disputes. Agencies are constrained by enabling legislation and constitutional limitations, including the Administrative Procedure Act (APA), which standardizes procedures and limits the scope of agency actions. 4. Types of Administrative Agencies   Executive Agencies: Operate within the President's cabinet (e.g., FDA, IRS). Their heads serve at the pleasure of the President. Independent Agencies: Operate separately from executive control (e.g., FTC, SEC, EPA). They are governed by boards or commissions, with members appointed for fixed terms, often with specific political balance requirements. 5. Investigative Power  Administrative agencies need information to enforce regulations. Sources include complaints, public interest groups, and other agencies.    Agencies often need to gather information from private businesses. They use tools like subpoenas and searches/seizures to obtain documents and compel testimony. o Subpoenas ad testificandum: Compel testimony. o Subpoenas duces tecum: Compel the production of documents. Courts limit subpoena power to prevent violations of privacy or unwarranted intrusions, ensuring that investigations have a legitimate purpose and are authorized by law. Warrantless Inspections: The Supreme Court allows warrantless inspections of "closely regulated" businesses if the inspections are necessary and follow specific criteria. 6. Rulemaking Power   Agencies create rules to implement legislation. These rules can be: o Procedural Rules: Guide agency processes. o Interpretive Rules: Explain how agencies interpret statutes (e.g., FTC's interpretation of the Magnuson-Moss Warranty Act). o Legislative Rules: Have the force of law and can regulate industries. The Administrative Procedure Act (APA) governs rulemaking procedures, ensuring transparency and public participation in rulemaking processes. 7. Limitations on Agency Power    Constitutional and Statutory Constraints: Agencies must adhere to the Fourth Amendment (regarding searches and seizures) and other legal requirements, such as not imposing unreasonable burdens. Subpoena Limitations: While agencies can demand information, these demands cannot be overly broad, irrelevant, or unnecessarily disruptive to business operations. Privileged Information: The Fifth Amendment protects against selfincrimination, but it may not apply in administrative proceedings where penalties are civil, not criminal. Conclusion: This section outlines how administrative agencies are structured, the powers they wield (investigative, rulemaking, and adjudicatory), and the various legal constraints they face. Agencies like the FTC play a crucial role in regulating business activities, but their powers are limited by constitutional rights, statutory restrictions, and procedural safeguards like the APA.