CHAPTER 4
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Common Law,
Statutory Law &
Administrative Law
QUOTE OF THE DAY
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Progress everywhere today does
seem to come so very heavily
disguised as chaos.
Joyce Grenfell, British actor
THREE SOURCES OF LAW
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COMMON LAW
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J udge-made law; made up of all the decisions
made by appellate courts.
Two hundred years ago, almost all law was
common law; most new law is statutory.
Common law predominates in tort, contract, and
agency law; it is important in property and
employment law.
Based on stare decisis, meaning let the
decision stand (previous decisions are
generally upheld in similar cases.)
Incorporates predictability and flexibility.
CHANGES IN COMMON LAW
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Over time, changes in societys norms have an effect on
long-standing common law. An example of this is the law
that applies to bystanders in emergencies.
Under common law, bystanders have no obligation to assist a
victim in an emergency.
Over time, courts have created exceptions, making employers
obliged to help an employee who is suddenly stricken with an
emergency situation when the employer is present.
Some courts now hold that anyone witnessing an extreme
situation or if there is a special relationship, such as patient-
therapist, should be required to help, though this is not
universal.
BYSTANDER RULE
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Is the bystander rule immoral?
What are the differences between law and
morality?
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Statutory Law
Most new law is statutory, that is, it is
legislation passed by either a state
legislature or the Congress of the
United States.
Citizens who vote have some control
over statutory law. We elect the state
congressional representatives and
the United States Senators and
Representatives.
WHAT WOULD YOU DO?
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Suppose you were on a state supreme
court and faced with a restaurant-
choking case.
HOW NEW LAWS ARE MADE
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Any member of Congress (Senator or
Representative) can initiate a bill, or proposed
law.
A bill is debated in a committee in the house
where it was introduced.
From the committee, it goes to the full house
for a vote.
If it passes both houses this way, it goes to the
President for his signature.
A Presidents signature turns a bill into law.
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How New Laws Are Made
A bill, or proposed law, is introduced in the House of Representatives or
the Senate and then assigned to a committee for discussion and voting.
Armed
Services
Agriculture
Ways and
Means
Banking,
Finance, and
Urban Affairs
Education
and
Labor
J udiciary
Committee
Aeronautical
and Space
Sciences
Armed
Services
Judiciary
Committee
Appropriation
Foreign
Relations
After it passes committee, the
bill goes to the full body of that
house for a vote.
Major House Committees
Major Senate Committees
If it passes there, it goes to the
other house (House to Senate
or Senate to House).
It is assigned to a
committee and the
process repeats.
If the second House of Congress made any changes, or amendments, to the bill, it must go to a Conference
Committee, made up of members of both houses. Here, they work out compromises between the two
different versions of the bill. The compromise bill then goes back to both houses for a final vote.
Once both houses pass the
compromise bill, it is sent to
the President to be signed.
If vetoed, it goes back to the
Congress, where it must pass
both houses by a 2/3 majority.
If signed, the bill becomes law.
House of
Representatives
Senate
Conference
Committee
WHY ARE BILLS PROPOSED?
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New issues or new worries such as
employment discrimination and Internet
privacy or copyright issues
Unpopular judicial rulings if Congress
disagrees with a judicial interpretation of a
statute, it may pass a new statute to undo
the decision of the court, unless the decision
at hand is based on the U.S. Constitution.
Criminal law must be set forth in clear terms
through statutes rather than left to judicial
interpretation.
WHAT WOULD YOU DECIDE?
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When are clauses in contracts
unconscionable?
STATUTORY INTERPRETATION
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Sometimes wording is ambiguous, either by
oversight, or intentional -- as a compromise.
New laws must be interpreted by the courts.
Plain Meaning Rule -- the courts must use the
common sense definition of words.
Legislative History and Intent -- sometimes the
court can look to the reasons behind the law to
determine the legislators intent.
Public Policy -- the courts will use accepted
social policies, such as reducing crime or
providing education to interpret a law.
Once the law (statute) has been applied by the
courts, its interpretation becomes a precedent to
be used in future court cases.
THE OTHER PLAYER --
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$ In todays political climate, running a campaign for
political office is an expensive endeavor.
$ Financial contributions to candidates or political parties
come from many sources. For example, in the 2004
presidential election, tax-exempt committees raised
millions of dollars to try to influence the election.
$ Donors usually expect to receive some benefit, such as
favored treatment in future legislative issues.
$ Supporters of contribution limits aim to equalize the access
to politics for rich and poor; opponents claim that the First
Amendment guarantees their right to support whomever
they choose.
Money
$ The very green bottom line is, MONEY TALKS -- and it
often talks loudly in the political arena!
ADMINISTRATIVE LAW
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Federal agencies such as the Federal Aviation
Administration (FAA) and the Federal Trade
Commission (FTC) and the Bureau of Land
Management, have the power to make regulations.
Agencies were -- and are -- created to fulfill a need.
Someone needs to oversee changing technologies and
practices and their effects on society.
An agency is created when Congress passes enabling
legislation, which describes a problem and defines the
agencys powers.
Agencies often have considerable power in their areas
of specialty, sometimes leading to controversy.
The Administrative Procedure Act regulates agencies,
in an attempt to reduce controversy.
HILLER SYSTEMS, INC.
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Can a company keep OSHA out of its
business when worksite accidents
occur?
What are the limits of OSHAs authority?
CLASSIFICATION OF AGENCIES
Executive Federal Agency: Part of executive branch, under the
control of the President; usually support the Presidents
policies.
Internal Revenue Service (IRS)
Federal Bureau of Investigation (FBI)
Food and Drug Administration (FDA)
Nuclear Regulatory Commission
Federal Communications Commission (FCC)
Independent Federal Agency: Not part of executive branch;
President does not have the power to fire the head of the agency.
Federal Trade Commission (FTC)
Securities and Exchange Commission
National Labor Relations Board
Environmental Protection Agency (EPA)
Examples:
UBIQUITOUS AGENCIES
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They are everywhere and have a
significant impact on our lives.
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The Administrative
Procedure Act
Passed in 1946 to bring uniformity and
control to many federal agencies.
Regulates how federal agencies make
rules, conduct investigations, hold
meetings and hearings, reach decisions
and obtain and release information.
POWER OF AGENCIES --
RULEMAKING
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Two types of rules
Legislative rules -- require
businesses and people to act a
certain way; have the effect of a
Congressional statute.
Interpretive rules -- these do not
change the law; they define or apply
the laws to new situations.
POWER OF AGENCIES --
RULEMAKING
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Three types of rulemaking
Informal rulemaking -- proposed rule must be
published and public allowed to comment.
Formal rulemaking -- must hold a public hearing
before establishing the rule.
Hybrid rulemaking -- some elements of both of
the above -- perhaps the proposal and
comment, with cross-examination, but not a full
hearing.
POWER OF AGENCIES --
INVESTIGATION
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Voluntary -- Some businesses freely give
information and readily comply with agency
recommendations.
Subpoena -- an order to appear at a hearing and
produce evidence, sometimes documents.
Must be relevant to the investigation and under the
agencys jurisdiction, or area of authority.
Must not be unreasonably burdensome on the
business.
Must not be privileged; this means that a corporate
officer may not be required to incriminate himself.
POWER OF
AGENCIES -- INVESTIGATION
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Recal l s The US Product Safety Commission
investigates hundreds of consumer products each
year and urges a recall of products considered
dangerous.
Subpoena an order to appear at a particular time
and place to provide evidence; may be used to
force disclosure
Search and Sei zure a legal search of a
business, in order to take evidence of wrongdoing.
Most require a warrant before the search.
Some industries are closely regulated and may
be searched at any time, with no warning.
POWER OF AGENCIES --
ADJUDICATION
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Adjudicate -- means to hold a hearing, then decide how
to proceed with an issue.
Procedures for adjudication
A hearing before an administrative law judge.
Parties have counsel, but there is no jury.
Informal; both sides present evidence.
J udge makes ruling on testimony and evidence.
If parties are unhappy with results
Loser may appeal to an appellate board.
Appellate board may make a de novo decision, and
ignore the administrative law judges decision.
Appeals go to a federal court.
LIMITS ON
AGENCY POWER
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Statutory Control
The enabling legislation that created the agency
places controls on it through requirements and
restrictions.
Political Control
The President has control over agencies through
political pressure and through nominations of
agency heads.
Congress controls the budgets of agencies.
They can eliminate funding for any program or an
entire agency.
Congress can amend enabling legislation to
place limits.
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Limits on Agency Power
Judicial Review
A party injured by an agency decision is entitled to
an appeal in a federal court, after all appeal
options are exhausted within the agency itself.
The court must consider the facts as stated by the
experts in the agency and the law as interpreted
by the agency.
Informational Control and the Public
The Freedom of Information Act (FOIA) -- allows
any citizen to request information from an agency.
The Privacy Act -- prohibits agencies from giving
information about an individual to other agencies
without consent. There are some exceptions.
LAW IS COMPLEX. THE
SUBJ ECT BECOMES LESS
BAFFLING IF WE
UNDERSTAND HOW
SOCIETY CREATES LAW.
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THE END
