Administrative lawconsists of the regulations (laws) passed by administrative agencies.Activities associated with these laws are also involved in administrative law.Administrative agenciesare responsible for administrative law.These agencies are part of the executive branch, and they exist at all three levels,ofgovernment. These agencies are created based on expertise and knowledge.The underlying foundation ofadministrative law is to let experts make the laws in certain technically complex areas that require expertise tounderstand. Such areas might include nuclear power, human health and safety, airplanes, etc. There aremany such areas in modern life.

Because of their needed expertise, and to help them do their work effectively, administrative agencies are given large amounts ofpower. Agenciesare typically given the power to not only make law in their area of expertise, but also to then go out and enforce this law, and finally, to resolve any legal disputes that might arise from their activities. Collectively, these powers are known as the administrative process. In the U.S.Constitution, these awesome powers of the law are split up and distributed among the three branches of government in hopes of preserving governmental balances of power. This Constitutional ideal is not adhered to for administrative agencies because, as noted above, we recognize that they are the ones with the necessary ability and expertise to accomplish these things, and we want them to have enough power to be able to do their complex work effectively and efficiently.

Since they are given so much power, acritical policy question naturally arises: How to ensure that agencies are not abusing this massive legal power they are granted? Such abuse wouldlikely lead to unjust treatment of the people and businesses over whom these agencies have the power of the law. Administrative law and administrative agencies often come under intense criticism. This is to be expected as they are part of the government and so they exist to serve the interests of the people. Much of this criticism is fair and warranted. However, extreme versions of this criticism claim that administrative agencies are part of some "deep state" that is trying to take over the country. This is ridiculous, of course, as we are all painfully finding out now. The reality is that sometimes, many times in fact, good governing is extremely difficult work that requires expertise to understand and complete.

In 1925, to specifically address some of the concerns raised by the policy question discussed above, Congress passed theAdministrative Procedure Act (APA) [5 U.S.C. Subchapter II] which is the federal law that places limits on agency powers, and specifies how agencies must proceed as they engage inrule making,enforcement, and adjudication.This law helps ensure that agencies act justly and fairly. Forexample, an agency cannot make law any old way they might want to; instead the Administrative Procedure Act (APA)specifiesa procedure that agencies must follow when they make new law. This procedure is designed to give the public, specifically the people that might be most affected by the law, an opportunity to give their input and be heard on the proposed lawbeforethe agency passes the law. The APA places similar limits on the other agency legal powers in an effort to reign in their power and help ensure they are treating people fairly.

Assignment (30 points total)

Read the cases and answer the questions for each case. Sometimes, there are multiple questions associated with a case. Please read each question carefully and answer each one completely.

Case1 (12 points)

Messages Inc. (MI) provides answering services to retailers. Calls to a retailer are automatically forwarded to MI, which pays for the calls. MI obtains telephone service from major carriers, including Sprint. Sprint's tariff (a public document setting out rates and rules relating to Sprint's services) states that the "subscriber shall be responsible for the payment of all charges for service." The tariff serves as the contract between Sprint and all of its subscribers, including MI. Because of faulty computer security at MI, computer hackers obtained the access code for MI's phone lines and made nearly $150,000 worth of long-distance calls. MI asked Sprint to absorb the cost. Sprint refused.

MI filed a complaint with the Federal Communications Commission (FCC), claiming that Sprint's tariff violated specific federal laws and FCC rules. These laws require that a carrier's tariff "clearly and definitely" specify any "exceptions or conditions which in any way affect the rates named in the tariff." The FCC rejected MI's complaint. MI appealed the FCC's decision to a federal appellate court, claiming that the FCC's decision to reject MI's complaint was arbitrary and capricious.

What legal test will the court use to resolve this issue? What does this test require? Applying the law to these facts, what should the court decide and why? Fully explain.

Case 2 (18 points)

On July 9, 2005, the Federal Transit Administration (FTA) announced the results of an internal study of its operations. The study made many recommendations for reform, including the recommendation that Section 913 of the Federal Transit Administration Act be amended so as to change certain licensing requirements for motor carriers.

On September 24, 2005, the FTA published a Notice in the Federal Register which provided, in pertinent part, as follows:

LICENSING OF MOTOR CARRIERS

Notice of Proceeding

Purpose: The Federal Transit Administration is committed to reviewing its jurisdiction over the transportation industry And to proposing to Congress appropriate legislation which would alter that jurisdiction, pursuant to the provisions of the Federal Transit Administration Act. The intent of this document is to institute a proceedingfor two purposes: (1) for investigating the present licensing requirements for motor carriers of property and passengers, And (2) for the possible formulation, andrecommendation toCongress, of legislation which would amend Section 913 of the Federal Transit Administration Act.

This Agency, however, would appreciate the views, comments, and suggestions of any interested parties relating to both of the above inquiries.

A period of comment followed, during which a public hearing was held, and written and digital communications were received. After the required time period, the FTA closed the comment period.

In April 2006, instead of proposing legislative changes to Congress, the FTA issued final rules involving both substantive and procedural changes to the licensing requirements for motor carriers.

On July 10, 2006, the National Carriers Association (NCA) filed a "Petition forReconsideration" with the FTA. This petition alleged the following specific error with the September 24, 2005 notice, and, by extension, the April 2006 final rules:

That the Notice that started this proceeding, later characterized by the FTA as a notice of proposed rulemaking, failed to comply with the Administrative Procedure Act (5 U.S.C. Subchapter II), specifically,

Section 4(a) of the Act (5 U.S.C. 553(b))which provides:

General notice of proposed rule making shall be published in the Federal Register, unless persons subject thereto are named and either personally served or otherwise have actual notice thereof in accordance with law. The notice shall include

(1) a statement of the time, place, and nature of public rule making proceedings;

(2) reference to the legal authority under which the rule is proposed; and

(3) either the terms or substance of the proposed rule or a description of the subjects and issues involved.

On August28, 2006, the FTA denied the Petition for Reconsideration.

NCA then asked the federal court of appeals to review the FTA's September 24, 2005 notice, and to strike down the rules the issued by the FTA in April 2006. The court agreed to hear the case.

Assuming the court appropriately applies the relevant law to these facts, what is the court likely decide in this case? Fully explain.