Administrative Law Structures - Module 1 of 5

Module 1: Administrative Law Structures

Administrative Law Overview

In the American system of government, powers are divided among three branches. The legislative branch, which consists of the Senate and the House of Representatives, makes new law. The executive branch, the President and those that work under him or her, are responsible for executing the laws. The judicial branch, the courts, adjudicate disputes that arise under the law.

Administrative law “structures” refer to designated agencies, boards, commissions, departments and other governmental institutions which have been created to perform narrowly defined tasks or to be responsible for particular governmental functions. While they are typically delegated authority by Congress, they act as part of the executive branch.  

These institutions are created and granted powers by Congress to carry out or administer those areas of governance which would be too time-consuming and inefficient for the President, the presidential staff or Congress to manage without such structures.

Administrative law is the body of law that governs these structures. It includes federal laws, Constitutional provisions, executive branch directives and internal agency policies, which govern the functioning of the federal agencies. Administrative law is not necessarily applicable or limited to a particular area, but defines the authority, structure and procedures of all federal agencies.

These governmental bodies, generally referred to as administrative agencies, arose primarily in the early 20^th century as the function and scope of the federal government became increasingly and complex.[1] Today, the federal government has dozens of agencies that administer, regulate and oversee a diverse range of government functions related to agriculture, transportation, the financial system, the environment, taxation and housing, among many other important spheres in which the government plays a role.

While administrative agencies operate under the umbrella of the executive branch, they operate according to internal procedures. Some agencies retain a degree of independence from the executive branch, specifically from direct control by the Presidential administration.

While agency heads are nominated by the President and many must be confirmed by Congress before taking office, the agencies are largely staffed by civil-service employees who are chosen on the basis of professional merit. Unlike political appointees who may serve only for the duration of the administration that appointed them, the professional employees are generally career employees at the agency for which they work. This helps insulate agency decisions from political and popular pressures to ensure that decisions are made on the basis of expertise and non-political public policy. [2]

Functions of Agencies

Broadly speaking, federal agencies perform three types of functions. Regulatory agencies, such as the Environmental Protection Agency, serve primarily to implement laws by issuing binding rules for how laws are to be applied and to determine whether parties comply with the regulations. Other agencies are created to administer federal government programs, such as the distribution of legally entitled governmental benefits. An example of this type of agency is the Social Security Administration, which is responsible for distributing social security benefits. Finally, some agencies are responsible for the enforcement of particular areas of law. One such example is the Bureau of Alcohol, Tobacco, Firearms and Explosives.

The two primary modes of operations used by Federal agencies are rule-making, which is the process of issuing binding rules to implement the agency’s mandate, and adjudication, in which the agency employs judicial hearings to rule on claims on a case-by-case basis. In addition, most agencies are authorized to carry out fact-finding investigations. Some are also responsible for issuing licenses, permits and extending legal exemptions for the areas of governance under the agency’s purview.  

While agencies operate largely according to their own internal procedures under the general umbrella of the executive branch, Congress has created some agencies with a high degree of autonomy, largely free from control by other parts of the executive branch and from the President. These independent agencies are generally not part of any executive department headed by a cabinet secretary and are designed to shield the agency from political influence to a greater degree.

For example, the National Labor Relations Board, which enforces federal labor law, is headed by a five-member board with staggered terms. They may only be removed by the president for cause, creating less opportunity for any single president to shape agency policy in the short term.[3]

There are also administrative agencies on the state level. State agencies largely carry out the same basic functions as federal agencies: enforcing laws, regulating businesses, and implementing state policy programs. While each state has enacted its own set of laws with regard to procedures for state agencies, many have enacted laws very similar to those that exist on the federal level.[4]

Creation of Agencies

Administrative agencies are established through acts of Congress known as enabling acts.[5] An enabling act establishes the purpose for which the agency is established and grants the federal agency the power to exercise the power of adjudication, the power to make binding rules and, often, investigatory powers. It outlines the agency’s procedures, the organizational structure of the agency, its place within the broad structure of the executive departments of the federal government and the degree of control retained over the agency by the rest of the executive branch, especially the President.

For example, in 1938, the Congress passed the federal Food, Drug and Cosmetic Act (the “Act”), which authorized the Food and Drug Administration, a federal agency, to enforce the terms of the Act. Among other things, the Act authorized the FDA to require evidence of the safety of new drugs, to issue new rules to establish standards for food quality and to conduct inspections in furtherance of these charges.[6] After many subsequent amendments, the FDA now operates under the Cabinet-level Department of Health and Human Services, and is responsible for protecting public health by ensuring the safety of drugs, biological products, medical devices and products that emit radiation, in addition to ensuring and protecting the nation’s food supply.[7]

In addition to laws governing specific agencies, Congress has enacted general statutes pertaining to the operation of agencies within the administrative structure as a whole. These laws detail the procedures for agencies to follow when proposing and developing new rules, and subject agency actions to oversight by the judiciary.[8] Congress has also established the Office of Management and Budget, itself a federal agency, which is responsible for oversight of the federal government, including agencies, and which reviews proposed agency regulations and coordinates policy among all governmental bodies to reflect Presidential priorities.[9]

Delegation of Powers

Constitutionally, only Congress is authorized to enact federal law. It may not authorize other bodies to assume this responsibility. [10] This is known as the “non-delegation” doctrine. Even so, the courts have allowed broad delegations of power by Congress to federal agencies to allow them to impose binding rules under the theory that the agencies must generate such rules to implement policies and standards set by Congress in the enabling act.

For example, while Congress established and authorized the creation and operation of the Department of Homeland Security, the DHS, its subsidiary agency, the TSA, is empowered to decide how many ounces of liquid you may take through security at the airport.

Courts typically uphold the delegation of powers to the agencies as long as Congress has established an “intelligible principle” directing agency action in the legislation which creates the agency.[11] This has been interpreted to require only general guidance from Congress for the delegation of power to be considered constitutional.[12]

Another primary function of an administrative agency is to adjudicate cases and controversies that arise under its purview. Congress may vest the power of adjudication in an agency to enable it to resolve disputes through case-by-case judicial processes, employing administrative law courts. However, the range of cases that administrative courts may adjudicate is limited. The Constitution vests the judicial power in the federal courts, which have special protections, such as life-tenure for federal judges and the requirement of a jury trial for certain types of cases.[13] As such, the courts have held that disputes between private, non-governmental parties, or cases involving claims which concern historically private, common law issues, which normally would be heard in the federal court system, may not be adjudicated in an administrative law court.  

At the same time, the courts consider cases involving legal disputes between private parties and the government or involving a particularized area of law closely related to a federal regulatory scheme to be matters of “public rights” and therefore within the competence of administrative courts.[14] This is because the scope and applicability of public rights are considered to be a political, rather than a judicial, and generally under the authority of Congress and the President to address. Therefore, Congress may elect to delegate its authority to agencies to decide the merits of a claim against a government body through adjudicative action.[15]

In addition, Congress may legislate new statutory rights for private parties, such as the right to workers’ compensation when injured in the course of employment. The courts have held that Congress may authorize administrative agencies to adjudicate cases involving such newly created rights which are not part of the common law.[16]

Legislative control of Agencies

Once Congress creates a new agency, that agency functions as part of the executive branch. Congress may no longer exert direct control over the agency’s operations, as this would violate the doctrine of “separation of powers” between the executive and the legislative branches. Congress may, however, investigate agency conduct as part of general Congressional oversight responsibilities.[17] This may include examining agency operations to see that they are acting in compliance with federal law, as well as requiring agency heads to testify before Congressional committees.

Likewise, Congress makes budget appropriation decisions that can impact the level of resources a particular agency has at its disposal to enforce agency rules and practices. In this way, Congress can limit the capacity for agencies to carry out specific rulemaking initiatives or otherwise enforce specific policies which are at odds with congressional policy preferences.

However, short of writing new legislation fundamentally altering the structure or mandate of an agency, Congress may not directly interfere with federal agencies. For example, Congress did try to give itself the right to veto agency decisions by majority vote of one house of Congress. The Supreme Court held that such a veto was unconstitutional since it improperly allowed Congress to direct agency action. The only way Congress could directly intervene in agency decisions would be to enact regular legislation, passed by both houses and signed by the president.[18]

Likewise, while members of Congress may engage with agency personnel with regard to upcoming rule changes and inquire about the status of adjudicatory hearings, they may not use Congressional power, such as holding hearings, to influence pending adjudications.[19]

Executive Control

While agencies are created to operate independently of the executive branch in their day-to-day operations, the President does have the power of appointment and removal of the heads of agencies.[20] The Constitution requires that all “principal officers” in the executive branch, including those in administrative agencies, be appointed by the President, subject to “advice and consent” by the Senate, which means that the Senate must confirm the appointment before she can take office.[21]

Principal officers include any person holding an office in the federal government who exercises significant authority. As such, the President appoints the heads of all administrative agencies, even if the primary functions of the agency are rulemaking and holding judicial-type proceedings.[22] In this way, the President retains some degree of control over the direction and policy agenda of an agency through the selection of officers who share the President’s governing approach.

There is no requirement that those deemed not to be principal or superior officers be appointed by the President. Congress may determine, by statute, whether such “inferior” officers as well as agency employees are chosen by Congress, by the President, or even by the courts.[23]

The President’s power to remove agency heads is also not absolute. While the President does have discretion to remove any officer in the executive branch, Congress may stipulate, by statute, that the holder of a specific office may only be removed for good cause.[24] This limitation is particularly important when dealing with independent agencies. To meet the mandate for such an agency to act completely independently of presidential control, it is imperative that a president not be permitted to remove the head of the agency simply for making decisions with which the president disagrees.[25]

Note that Congress may not directly appoint or remove principal officers, including agency heads. This means that any statute which retains for Congress the right to remove an official of the federal government who operates in an executive capacity would be an unconstitutional violation of the separation of powers.[26]

In our next module, we’ll turn to procedures employed by administrative agencies and the “due process” limitations on what administrative agencies can do.