The Legal and Social Environment of Business (part 1)






The Nature and Source of Law

A Right is a legal capacity to require another person to perform or refrain from an action.

A Duty is an obligation of law imposed on a person to perform or refrain from performing a certain act.

Each right comes with a duty – example: terms of a lease gives a renter the right to live in an apartment that will remain in a condition of good repair so that the renter can live there comfortably, then the landlord has a duty to ensure that there is hot and cold running water.

Certain individual rights are guaranteed through the U.S. Constitution, but also come with duties. Freedom of speech is guaranteed, but you cannot yell fire in a crowded theater.

Rights provide a framework for structure of government and other laws as no right can be taken away or violated by any statues, ordinances, or court decisions.

The Right of Privacy has two components.
First is right to be secure against unreasonable searches and seizures by the government, as given by the fourth amendment. If your home is searched without a warrant, anything found can be excluded as evidence.
Second aspect is protection against intrusions by others – your private life is not subject to public scrutiny when you are a private citizen.
These two components have many interpretations, often found in statutes that give privacy according to certain conduct.

Banks can't give out customer's bank information except to law enforcement agencies conducting investigations.

Family Educational Rights and Privacy Act of 1974 (FERPA, also known as the Buckley Amendment) keeps colleges/universities from giving out student's grades without the student's permission.

Privacy protection also goes to credit information and SSN.

Technology creates new situations that require the application of new rules of law.

Technology changes how we interact, and therefore, new rules of law have developed to protect our rights.

Business today is conducted electronically, but we still expect communications to be private.

Law has stepped in to reestablish the right of privacy still exists even in these technologically non-private circumstances

Some laws now make it a crime and a breach of privacy to engage in such interceptions of communications.

61% of professional service firms do Google searches on job candidates.

50% of professional services hired by employers to do background checks use Google.

Advice to college students is to be careful what you post. It may not seem controversial now, but could haunt them later when beginning professional carreers.

There are several layers of law enacted at different levels of government to provide the framework for business and personal rights and duties.

Basis for all law is constitutional law.

Constitutional law is the branch of law based on the constitution for a particular level of government.

Based on constitution – a body of principles that establishes the structure of a government and the relationship of the government to the people who are governed.

Constitution is a combination of written document and practices and customs that develop over time.

Two constitutions are in force in each state: federal constitution and state constitution.

Statutory law is legislative acts declaring, commanding or prohibiting something. Both Congress and state legislatures enact statutory law.

Examples of congressional legislative include enactment of Securities Act of 1933, Sherman Antitrust Act, bankruptcy laws, consumer credit protection provisions.

Examples at state level are statutes that govern creation fo corporations, probate of wills, and transfer of title to property.

In addition to federal and state legislatures, all cities, counties, and other governmental subdivisions have some power to adopt ordinances within their sphere of operation.

Examples of these are traffic laws, zoning laws, pet and bicycle licensing laws.

Administrative Regulations are rules made by state and federal administrative agencies

These regulations generally have the force of statutes.

Private laws are rules and regulations parties agree to as part of their contractual relationships.

Examples are rules landlords set for tenants on parking, laundry room use, pets, etc.; employers for employees use of work computers, posting pictures and information on bulletin boards, etc.; homeowners associations on landscaping to the color of your house.

Case law is law that includes principles that are expressed for the first time in court decisions.

When a new question or problem is decided by case law it becomes a precedent (a decision of a court that stands as the law for a particular problem in the future).

Stare decisis (“let the decision stand”) is the principle that the decision of a court should serve as a guide or precedent and control the decision of a similar case in the future.

Judges have some flexibility, and stare decisis is not cast in stone. If a court finds an earlier decision was incorrect, it can overrule that decision
Example: Brown v Board of Education in 1954 overturned Plessy v Ferguson from 1896 in determining if separate facilities for blacks were equal to facilities for whites.

Common Law is the body of unwritten principles originally based upon the usages and customs of the community that were recognized and enforced by the courts.

Statutes sometimes repeal or redeclare common law rules.

Law also includes treaties made by the U.S. And proclamations and executive orders made by the President or other public officials.

National Conference of Commissioners on Uniform State Laws (NCCUSL)
Composed of representatives from every state.
Has drafted statutes on various subjects for adoption by the states.
Best example of these laws is Uniform Commercial Code (UCC)
USS regulates the sale and leasing of goods, commercial paper, banking, and letters of credit.
Having the same principles of law on contracts in most of the 50 states makes doing business easier and less expensive.
Other examples of uniform laws: Model Business Corporations act, Uniform Partnership Act, Uniform Residential Landlord Tenant Act

Substantive law defines rights and liabilities.
Example: Laws that grant employees protection against discrimination.

Procedural law must be followed in enforcing rights and liabilities defined by substantive law.
Example: Regulations of the Equal Employment Opportunity Commission (EEOC) for bringing suits against or investigations of employers for discrimination charges.

Law may also be classified from Roman (civil) law, from English common law based on customs and usages of the community, or from the law merchant.

Law may be classified according to subject matter, such as the law of contracts, the law of real estate, or the law of wills.

Sometimes classified by principles of law and principles of equity.

Equity is the body of principles that originally developed because of the inadequacy of the rules then applied by the common law courts of England.

Rules of equity apply when the remedies provided at law cannot provide adequate relief in the form of monetary damages.

Except in a few states, law courts and equity courts have been combined.

A party may ask for both legal and equitable remedies in a single court.
Example: Homeowner contracts to sell home to a buyer, then refuses to go through with the contract. Buyer has legal remedy of recovering damages. Rules of equity go further, when appropriate, and could require owner to actually transfer ownership of the house to the buyer.

Such remedies require court order for specific conduct known as specific performance.

Equitable remedies may be available in certain contract breaches.

The Court System and Dispute Resolution

Business disputes can be settled through the court system or through alternative means.

Court is a tribunal established by government to hear and decide matters properly brought to it.

Jurisdiction is the power of a court to hear and determine a given class of cases; the power to act over a particular defendant.

Subject matter jurisdiction is the authority to hear a particular type of case.

Original jurisdiction is the authority to hear a controversy when it is first brought to court.

This would be a court where the witnesses actually testify, the documents are admitted into evidence, and the jury (in the case of a jury trial) is present to hear all evidence and make decisions.

General jurisdiction is the power to hear and decide most controversies involving legal rights and duties

Can extend to both general civil and criminal cases.

Limited (special) jurisdiction is the authority to hear only particular kinds of cases.
Example: Many states have courts that only hear disputes where the damages are $10,000 or less.

Some types of limited jurisdiction courts are juvenile courts, probate courts, and domestic relations courts.

In Federal courts, they include bankruptcy and U.S. Tax courts.

Appellate jurisdiction courts have the power of a court to hear and decide a given class of cases on appeal from another court or administrative agency.
They review the work of a lower court.
An appeal is a review of the trial and decision of the lower court, usually by a panel of three judges.
Review the transcript and evidence, but do not hear testimony, to determine if there has been a reversible error.
Reversible error means an error or defect in court proceedings of so serious a nature that on appeal the appellate court will set aside the proceedings of the lower court. It is a mistake in applying the law or a mistake in admitting evidence that affected the outcome of the case.
Appellate courts either affirm or reverse lower court decisions, or remand that decision for another trial or additional hearings.

Affirm – approves the decision of the lower court.

Reverse – sets aside the verdict of a lower court.

Remand – sends a case back to trial court for additional hearings or a new trial.

The Federal Court System consists of three levels

Federal district courts are general trial courts of the federal system.

Courts of original jurisdiction that hear both civil and criminal matters.

Cases are those where the defendant is charged with a violation of federal law.
Also cases where:
Civil suits where the United States is a party
Cases between citizens of different states involving damages of $75,000 or more
Cases arising under U.S. Constitution or federal laws and treaties.

94 federal districts, 89 within the U.S., remaining are in Puerto Rico, Guam, etc.

Some states have several federal districts because of population base (such as New York and California)

Federal system has additional trial courts with limited jurisdiction

Include federal bankruptcy courts, Indian tribal courts, Tax Court, Court of Federal Claims, Court of Veterans Appeals, Court of International Trade

Final decision of a federal district court can be appealed to a court with appellate jurisdiction.

Federal districts are grouped into 12 judicial circuits, including one for the District of Columbia.

13th circuit called Federal Circuit hears certain types of appeals from all of the circuits, including specialty cases like patent appeals.

Each circuit has an appellate court called U.S. Court of Appeals.

Generally a panel of 3 judges reviews.

En banc is term used when the full panel of judges on the appellate court hears a case.

U.S. Supreme Court is the final court in the federal system.
Has appellate jurisdiction over cases appealed from the federal courts of appeals as well as from state supreme courts when constitutional issue is involved, or state court has reversed a federal ruling.
Does not hear all cases from the federal courts of appeals but has a processed called granting a writ of certiorari.

Writ of certiorari is an order by the U.S. Supreme Court granting a right of review by the court of a lower court decision.
Is a preliminary review of those cases appealed to decide whetehr a case will be heard or allowed to stand as ruled on by the lower courts.

U.S. Supreme Court is the only court created in the U.S. Constitution. All other courts created by Congress through its constitutional power.

Constitution makes Supreme Court a court of original jurisdiction.
Serves as a trial court for cases involving ambassadors, public ministers, or consuls and for cases in which two states are involved in a law suit.

Most states have trial courts of general jurisdiction.

May be called superior courts, circuit courts, or county courts.

Courts of general and original jurisdiction that hear both criminal and civil cases.

Cases that do not meet jurisdictional requirements of federal courts would be tried in these courts.

Specialty Courts
Courts with limited jurisdiction.
Include juvenile courts (where defendants are under the age of 18)., probate courts, family law courts.

City, Municipal, and Justice Courts
Courts with limited jurisdiction.
Generally handle civil matters in which the claim is an amount below a certain level, such as $5,000 or $10,000.
Also handle misdemeanor types of offenses, such as traffic violations or violations of noise ordinances, and the trials for them.

Small Claims Courts
Limited jurisdiction.
Courts that resolve disputes between parties when those disputes do not exceed a minimal level.
No lawyers are permitted – parties represent themselves.
Provide a faster and inexpensive means for resolving a dispute that does not involve a large amount of claimed damages.

State Appellate Courts
Intermediate-level courts similar to federal court of appeals.
Decisions of the general trial courts in a state would be appealed to these courts.

State Supreme Courts
Highest court in most states, although some call their highest court the court of appeals, or supreme judicial court.
Have appellate jurisdiction
Some states do have original jurisdiction.
Have a screening process for cases.
Are required to hear some cases, such as criminal cases in which the defendant has received the death penalty.
Decision is final except in those circumstances in which a federal law or treaty or the U.S. Constitution is involved.

Cases with these federal subject matter issues can then be appealed to the U.S. Supreme Court.

Plaintiff is the party that initiates a lawsuit.

Prosecutor is the party who originates a criminal proceeding.

Defendant is the party charged with a violation of civil or criminal law in a proceeding.

Judge is the primary officer of the court.
Either elected or appointed official who presides over the matters brought before the court.

Attorneys or lawyers are representatives for the plaintiff and the defendant for purposes of presenting their cases.

Attorney-client privilege is the right of individual to have discussions with his/her attorney kept private and confidential.

Attorney-client privilege does not cover if a client is committing, or plans to commit, a crime.

Jury is a body of citizens sworn by a court to determine by verdict the issues of fact submitted to them.

Jurors are chosen based on lists compiled from voter registration and driver's license records.

When a lawsuit is brought, there is not just the question of where it will be tried, but what law will be applied.

The principle that determines when a court applies the law of its own state – the law of the forum – or some foreign law is called conflict of laws.

The law of the state in which the court is located governs the case on procedural issues and rules of evidence.

Contract litigation – Court applies law of state in which the contract was made for determining issues of formation.

Performance disputes and damages for non-performance are governed by law of state where the contract is performed.

International contracts follow similar rules.

Becoming more common for the parties to specify their choice of law in the contract.

In absence of this, growing acceptance of the rule that a contract should be governed by the law of the state that has the most significant contacts with the transaction.

In determining which state has most significant contacts, court considers the place of contracting, negotiating, and performing, the location of the subject matter of the contract, and the domicile (residence), states of incorporation, and principal place of business of the parties.

Following steps generally apply in courts of original jurisdiction, but not every step applies in every case.
Commencement of a Lawsuit
Starts with the filing of a complaint.
Complaint is the initial pleading filed by the plaintiff in many actions, which in many states may be served as original process to acquire jurisdiction over the defendant.
Complaint generally contains a description of the wrongful conduct and request for damages such as a monetary amount.
Example would be a plaintiff in a contract suit would describe the contract, when entered into, when the defendant stopped performance. Copy of the contract would be attached to the complaint.

Once lawsuit filed, plaintiff has responsibility to notify the defendant that the suit has been filed.

Defendant must be served with process.

Process is often called a writ, notice, or summons.

Process is the paperwork served personally on a defendant in a civil case.

It is delivered to the defendant and includes a copy of the complaint and notification that the defendant must appear and respond to the allegations of the complaint.

Defendant must answer the complaint within the time provided under the court's rules.
Answer is what a defendant files to either admit or deny facts asserted by the plaintiff.

Defendant has several options.
Can make a motion to dismiss – a pleading that may be filed to attack the adverse party's pleading as not stating a cause of action or a defense. Even if what the plaintiff claims is true, there is no right of recovery.
Motion to dismiss is also called a demurrer – pleading to dismiss for not stating a cause of action or a defense.
Can deny the allegations.
Counterclaim – claim that the defendant in an action may make against the plaintiff, which is asking the court for damages as a result of the underlying dispute.

All documents filed in the initial phase are the pleadings – papers filed by the parties in an action in order to set forth the facts and frame the issues to be tried, although, under some systems, the pleadings merely give notice or a general indication of the nature of the issues.

Discovery are the procedures for gathering facts prior to the time of trail in order to eliminate the element of surprise in litigation.
Requires each side to disclose potential witnesses and to provide each side the chance to question those witnesses in advance of the trial.
Each party also has the opportunity to examine, inspect, and photograph books, records, buildings and machines.

Deposition is the testimony of a witness taken out of court but under oath.
Transcribed by a court reporter.
If trial testimony is inconsistent with deposition testimony, the inconsistent testimony can be used to impeach or challenge the witness's credibility at trial.
Deposition can be used for both discovery, or to preserve testimony for a witness who will not be available during the trial.
Some states now allow for video deposition to be given, as it allows jurors to see demeanor and hear the words as they were spoken, complete with inflection.

Interrogatories are written questions used as a discovery tool that must be answered under oath.

Request for production of documents is a discovery tool for uncovering paper evidence in a case.

These discovery requests can be time consuming to the answering party, and often lead to pretrial legal disputes between the parties and their attorneys as a result of the legal expenses involved.

Motion for Summary Judgment
Request that the court decide the case on basis of law only because there are no material issues disputed by the parties.
Example: parties can agree that they entered into life insurance contract, but dispute whether the policy applies to a suicide. Facts are not in dispute, law on payment in event of a suicide is.

Expert witness is one with special knowledge in a particular field whose opinion is admissible as an aid to the trier of fact.

There are rules for naming expert witnesses as well as admitting studies or documents of the expert as evidence.

Rules are to avoid junk science – admission of experts' testimony and research that has not been properly conducted or reviewed by peers.

Jurors are questioned by the judge and lawyers to determine if they are biased, or have preformed judgments about the parties in the case.

Jury selection is called voir dire examination.

Lawyers have the opportunity to remove jurors who know parties in the case, or who indicate they have already formed an opinion about guilt or innocence.

Challenges for cause are limited, but each side can exercise six to eight peremptory challenges, which is a challenge for an attorney to strike (or remove) a juror, except for racial reasons.

Opening statements are the statements by opposing attorneys that tell the jury what the cases will prove.

The plaintiff begins to present his case with witnesses and other evidence.

Judges rule on the admissibility of evidence, the quality of the evidence in a case that allows it to be presented to the jury.

Evidence can consist of documents, testimony and even physical evidence.

In the case of testimony, the plaintiff attorney conducts direct examination (examination of a witness by his/her attorney).

The defense attorney then performs cross-examination (examination of a witness by the attorney for the adverse party)

Next comes redirect examination – questioning after cross-examination, in which the attorney for the witness testifying may ask the same witness other questions to overcome the effects of the cross-examination.

Finally comes recross-examination – questioning by the other side's attorney following the redirect examination.

Once all of the plaintiff's witnesses have testified, the same process is followed for the defendant's witnesses, with the defendant's attorney performing the direct and redirect examination, and the plaintiff's attorney performing the cross and recross examination.

Motion for a Directed Verdict - A motion that asks the court to grant a verdict because, even if all the evidence provided is true, there is either no basis for recovery by the plaintiff, or no defense to recovery.
Either side can make a motion for a directed verdict.
If made by the defendant, is stating that there is no basis in law for the plaintiff to recovery.
If made by the plaintiff, is stating that there is no basis in law in the defense case that challenged the plaintiff's right to recovery.

After both sides have presented their case, each attorney makes another address to the jury.
Also called closing arguments
Summarizes the case and suggest that a particular verdict be returned by the jury.

During the trial, the court may declare there has been a mistrial.

This terminates a trial and postpones it to a later date.

Commonly entered when evidence has been of a highly prejudicial character, or when a juror or attorney has been guilty of misconduct.

After summation, the court gives the jurors instructions.

Instructions are summary of the law given to the jurors by the judge before deliberation begins., and to apply the facts presented to the law.

The jury then deliberates and renders its verdict.

After the jury verdict, the court enters a judgment.

If the jury is deadlocked and unable to reach a verdict, the case is reset for a new trial at some future date.

Motion for New Trial; Motion for Judgment N.O.V.

Judgment N.O.V. (non obstante verdicto, or not withstanding the verdict) is where the court sets aside the verdict of the jury in favor of the other party if the verdict is clearly wrong as a matter of law.

Prevailing party is usually awarded costs, including filing fees, service-of-process fees, witness fees, deposition transcript costs, and jury fees.

Costs do not include compensation for time spent preparing the case or being present at trial, including time spent away from work.

Lost wages from an injury are generally part of damages.

Attorney fees are not included in costs either.

Attorney fees may be recovered if a statute permits the recovery of attorney fees or if the complaint involves a claim for breach of contract, and the contract contains a clause for providing for recovery of attorney fees.

After judgment has been entered and all appeals have been exhausted, losing party must pay that judgment.

Execution of the judgment is the carrying out of a judgment of a court generally directing that property owned by the defendant be sold and the proceeds first be used to pay the execution or judgment creditor.

This is done by the seizure and sale of the property by the sheriff according to a writ of execution or a writ of possession.

Garnishment is the name given in some states to attachment proceedings.

When the judgment debtor is an employee, the judicial authority may garnish, by written notice to the employer, a portion of the employee's wages on a regular basis until the judgment is paid.

Alternative Dispute Resolution (ADR) – Means other than litigation to resolve disagreements or disputes.

Arbitration
The settlement of disputed questions whether of law or fact by one or more arbitrators by whose decision the parties agree to be bound.
Arbitrators are disinterested persons selected by the parties to the dispute.
A number of states have adopted the Uniform Arbitration Act

Parties to a contract may agree in advance that all disputes arising under it will be submitted to arbitration.

The uniform act requires a written agreement to arbitrate.

The Federal Arbitration Act provides tha an arbitration clause in a contract related to interstate transaction is valid, irrevocable, and enforceable.

Mandatory Arbitration – Some statutes require that certain types of disputes be submitted to arbitration.

Scope of Arbitration – When it is required by statute, the terms of the statute will define the scope of the arbitration.
When parties agree to arbitration, their agreement will control the scope of the dispute..

Most parties agree that the decision of the arbitrator will be final.

If arbitration is mandatory under statute or rule, the losing party may appeal such arbitration in court.

A trial (trial de novo) is required to preserve the constitutional right to a jury trial by allowing an appeal to proceed as though there never had been any prior hearing or decision.

The settlement of a dispute through the use of a messenger who carries to each side of the dispute the issues and offers in the case.

The mediator has no authority to render a decision, but in some cases, may make suggestions that might be accepted by the disputing parties.

Medarb - In this form of ADR, the arbitrator is also empowered to act as a mediator.

Reference To A Third Person - Settlement that allows a nonparty (third person or committee) to resolve the dispute.
The third person makes an out-of-court determination of the rights of persons.

Association Tribunals - A court created by a trade association or group for the resolution of disputes among its members.

Summary jury trial is a mock or dry-run trial for parties to get a feel of how their cases will play to a jury.

Object is to get the reaction of a sample jury.

No evidence is presented, and it bases its opinion solely on what the lawyers state.

When the lawyers and their clients see how the sample jury reacts, they may moderate their positions and reach a settlement.

Rent-A-Judge
Dispute resolution through private courts with judges paid to be referees for the case.
The judges decision is binding unless reversed on appeal if such an appeal is permitted under the parties' agreement.

Minitrial - A trial held on portions of the case or certain issues in the case.
Occurs when only part of a case is disputed.
Example is when there is no real dispute over the liability of the defendant but the parties disagree as to the damages, the issue of damages only may be submitted to the jury.

Judicial Triage - A court management tool used by judges to expedite certain cases in which time is of the essence, such as asbestos cases in which the plaintiffs are gravely ill.

Contracts may contain clauses requiring the parties to use one of the procedures already described.

Contracts may state that no action may be taken until after a specified cooling-off period.

Contracts may state that parties should continue performance of their contract even though a dispute still exists.

There are procedures aimed at removing the grounds for a complaint before it develops into a dispute that requires resolution.
An example of this would be the complaint department in a department store.
An ombudsman is a government official designated by a statute to examine citizen complaints and make recommendations for improvements.

Administrative Agencies

Nature of the Administrative Agency – Government body charged with administering and implementing legislation - may be a department, commission, board or bureau – example is the FTC.

Administrative Agencies carry out general policies specified by Congress.

Administrative law is the law governing these agencies.

State agencies may exist with jurisdiction over areas of law affecting business, such as worker’s compensation claims and licensing.

Members of agencies are appointed rather than elected

Combine legislative, executive, and judicial powers.

Subject to strict procedural rules and disclosure requirements.

Administrative Procedure Act is federal law that establishes the operating rules for administrative agencies.

Freedom of Information Act is federal law permitting citizens to request documents and records from administrative agencies.

FOIA provides that each agency publish in the Federal Register guidance for the public to obtain information.

Limitations on what can be requested prevent invasion of privacy by preventing obtaining information not necessary to legitimate interests, and may harm the person or company whose information is being sought.

Under Sunshine Act of 1976, federal government requires most meetings of major administrative agencies to be open to the public.

Called the Open Meeting Law.

To inform the public of how the agencies operate, the APA requires that each federal agency publish the rules, principles and procedures that it follows.

Agency may adopt regulations within the scope of its authority.

If the regulation is not authorized by the law creating the agency, anyone affected can challenge on the basis that the agency has exceeded its authority.

Authority of the agency is not limited to the technology in existence at the time it was created.

Congressional Enabling Act – Before an agency can begin rulemaking proceedings, it must be given jurisdiction by congressional enactment in the form of a statute.

Agency Research of the Problem – After jurisdiction has been established, the agency researches the issues and various avenues of regulation for implementing the statutory framework.
Study determines the cost and benefit of the problem.
May be done by the agency, or someone hired by the agency.
Proposed Regulations – Following the study, the agency proposes regulations which must be published.

Federal Register Act is a federal law requiring agencies to make public disclosure of proposed rules, passed rules, and activities.

Federal Register is a government publication issued five days a week that lists all administrative regulations, all presidential proclamations and executive orders, and other documents and classes of documents that the president of Congress direct to be published.

Regulatory Flexibility Act states that in addition to the Federal Register announcements must also be in trade magazines.

Public Comment Period – Following publication of the proposed rules, public has time (at least 30 days) to comment.

Options After Public Comment – After receiving the public input, an agency can decide to pass, or promulgate, the rule.

Agency can also withdraw the rule.

Agency can decide to modify the rule based on the input. >Agencies have the power to investigate, require persons to appear as witnesses, require witnesses to produce relevant papers and records, and bring proceedings against those who violate the law (regulations adopted by the agency, as well as statutes and court decisions).

Persons have the same protection against unreasonable search and seizure from agencies as they do from police.

A search warrant is never required when the subject matter can be seen from a public place, including from the air.

Constitutional guarantee against unreasonable search and seizure does not afford much protection for papers and records investigated by an agency
Protection against self-incrimination is likewise narrow.

Administrative agency may require proof of compliance.

May require regulated person or enterprise to file reports in a specified form.

Although not a court by law, the agency can sit as a court to determine if any violations of the law or agency regulations have occurred.
Beginning Enforcement-Preliminary Steps
Written complaint alleging violation of law or regulation within the agency's jurisdiction is filed.
Pleadings by both sides are filed.

To satisfy due process, an agency must give notice, and hold a hearing where all persons affected may be present.

There is no right to trial in an agency hearing – an administrative law judge hears the complaint.

An agency may be authorized to make an initial determination without holding a hearing.

If conclusion is challenged, agency then holds a hearing.

Party objecting has the burden of proof.

Streamlined Procedure: Consent Decrees

Informal settlements are negotiated disposition of a matter before an administrative agency, generally without public sanctions.

Consent decrees are informal settlements of enforcements actions brought by agencies.

Administrative Dispute Resolution Act of 1990 encourages sreamlining of the regulatory process.

A matter that has already gone into formal hearing may be terminated by agreement and stipulation or consent decree may be filed setting forth the terms of the agreement.

After the administration makes a decision, it files an opinion that sets forth the findings of facts and reasons on which the decision is based.

Agencies can impose penalties and issue orders that are binding on a regulated party.

Cease-And-Desist Order - Order issued by a court or administrative agency to stop a practice that it decides is improper.

Exhaustion of Administrative Remedies - Requirement that an agency make its final decision before the parties can go to court
No appeal to a court is possible until the agency has acted on the party's matter before it
Exceptions are:
Available remedies that provide no genuine opportunity for adequate relief
Irreparable injury that could occur if immediate judicial relief is not provided
An appeal to the administrative agency that would be useless
A substantial constitutional question that the plaintiff has raised.

Appeal From Administrative Action and Finality of Administrative Determination
Statute creating the modern administrative agency generally provides that an appeal may be taken to a particular court.
Judicial precedent holds that courts may review administrative agency decisions on the bases cover next:

If the procedure that an agency is to follow is specified, a decision that was made without following the procedures will be set aside and the matter sent back tot he agency to proceed according to the required law.

When the question decided is a question of law, the court on appeal will reverse the decision if it does not agree with the interpretations of the agency.

When the question is a question of fact, or mix of law and fact, courts accept the agency's decision if it is supported by substantial evidence.

A court will not reverse an agency's decision merely because it would have made a different decision.

When the question is whether an administrative action is in harmony with the policy of the statute creating the agency, an appellate court sustains the action if substantial evidence supports it.

When an agency changes a prior decision, it must give reasons.

In the absence of explanation, a reviewing court cannot tell if the agency changed interpretation of the law for a valid reason, or made a mistake.

As a practical rule, agencies are rarely found to be arbitrary or capricious.

Because of limited funding and staff, agencies must choose which cases it should handle.

Courts will not override an agency's decision to do nothing.

Decision of an agency may cause substantial loss to a business by increasing its operating costs or making a decision that later is shown to be harmful to the economy

Agencies are not liable for such loss when it has acted in good faith.