Administrative Agency

An official governmental body empowered with the authority to direct and supervise the implementation of particular legislative acts. In addition to agency, such governmental bodies may be called commissions, corporations (e.g., FEDERAL DEPOSIT INSURANCE CORPORATION), boards, departments, or divisions.

Administrative agencies are created by the federal Constitution, the U.S. Congress, state legislatures, and local lawmaking bodies to manage crises, redress serious social problems, or oversee complex matters of governmental concern beyond the expertise of legislators. Although Article I, Section 1, of the federal Constitution plainly states that "[a]ll legislative Powers herein granted shall be vested in a Congress of the United States," the "necessary-and-proper" clause, in the eighth section of the same article, states that Congress shall have power "[t]o make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers … in any Department or Officer thereof." With this language, many have argued that the Framers of the Constitution expected, indeed encouraged, the creation of powerful administrative agencies. This argument prevailed, and courts therefore have allowed the U.S. Congress—and other legislative bodies—to make laws that delegate limited lawmaking authority to administrative agencies. The substance of an administrative agency's powers must be intelligible, and a system of controls must be in place to limit those powers, but courts almost always find that administrative agencies meet these requirements.

Administrative agency rules and regulations often have the force of law against individuals. This tendency has led many critics to charge that the creation of agencies circumvents the constitutional directive that laws are to be created by elected officials. According to these critics, administrative agencies constitute an unconstitutional, bureaucratic fourth branch of government with powers that exceed those of the three recognized branches (the legislative, executive, and judiciary). In response, supporters of administrative agencies note that agencies are created and overseen by elected officials or the president. Agencies are created by an enabling statute, which is a state or federal law that gives birth to the agency and outlines the procedures for the agency's rule making. Furthermore, agencies include the public in their rule-making processes. Thus, by proxy, agencies are the will of the electorate.

Supporters of administrative agencies note also that agencies are able to adjudicate relatively minor or exceedingly complex disputes more quickly or more flexibly than can state and federal courts, which helps preserve judicial resources and promotes swift resolutions. Opponents argue that swiftness and ease at the expense of fairness are no virtues, but while the debate continues, administrative agencies thrive.

Governmental representation in an administrative capacity of any kind can be considered administrative agency. The president is an administrative agent whose enabling statute is the federal Constitution. The thirteen executive departments reporting to the president are administrative agencies. For example, the DEPARTMENT OF JUSTICE is a cabinet-level executive department, but it functions as the administrative agency that addresses the legal concerns of the U.S. government and its people. The departments housed within the Department of Justice, such as the DRUG ENFORCEMENT ADMINISTRATION and the FEDERAL BUREAU OF INVESTIGATION, are also administrative agencies, and they have procedures and rules of their own.

An administrative agency that falls under the direction of the EXECUTIVE BRANCH is referred to as an executive agency. However, an enabling statute may establish an independent agency, commission, or board, which does not fall under the direction of the president. The primary distinction between an executive agency and an independent agency is that the statute creating an independent agency typically precludes the president from removing the head of the agency without cause. By contrast, a head of an executive agency generally serves at the pleasure of the president. The U.S. Supreme Court on several occasions has considered whether independent agencies are constitutional. In Humphrey's Executor v. United States, 295 U.S. 602, 55 S. Ct. 869, 79 L. Ed. 1611 (1935), the Court held the President FRANKLIN D. ROOSEVELT could not remove the commissioner of the FEDERAL TRADE COMMISSION (FTC) without cause. The statute that created the commission permitted removal of the commissioner only for inefficiency, neglect of duty, or malfeasance of office. Roosevelt purported to remove FTC Commissioner William E. Humphrey, who had been nominated by President HERBERT C. HOOVER to a seven-year term in 1931, in order to replace Humphrey with an individual of Roosevelt's own selection. The Court held that because Humphrey was not an executive officer, the president could not remove him from office except for the causes set forth in the statute.

Many of the administrative agencies that affect everyday activities are independent agencies. Among the numerous examples of independent agencies are the CENTRAL INTELLIGENCE AGENCY, ENVIRONMENTAL PROTECTION AGENCY, the NATIONAL LABOR RELATIONS BOARD, and the SECURITIES AND EXCHANGE COMMISSION. Because the president is generally able to appoint the chairs or fill vacancies within these agencies, the president is often able to influence their activities, notwithstanding the limitation on the removal of the heads of the agencies.

The National Recovery Administration was created in the 1930s to ensure fair market competition. It was one of numerous agencies created by Congress during the Great Depression in an effort to regulate the production and marketing of goods.
AP/WIDE WORLD PHOTOS

Administrative agencies are made up of experts in the field in which the agency operates. For example, the Maritime Administration employs experts in the areas of sea commerce and navigation to set its rules on merchant marine activities. Many agencies have the power to assess fines or otherwise deprive persons of liberty in hearings conducted by their own judicial bodies, or administrative boards. Given the specialized knowledge within administrative agencies, ADMINISTRATIVE LAW judges (ALJs), who hear agency claims and disputes, are loath to overturn the legal conclusions reached by administrative boards. Determinations and sanctions made by ALJs are subject to review by state or federal courts, but a party must exhaust all appeals within the agency before suing in civil court.

An agency's actions must be in accordance with its enabling statute, and courts will examine the agency records to determine whether the agency exceeded its lawmaking or judicial powers. Rigorous judicial oversight of agencies would defeat a cherished feature of administrative agency by eliminating agency flexibility in resolving conflicts. To avoid this outcome, most enabling statutes are worded vaguely, in such a way as to allow the agencies broad discretion in determining their rules and procedures. To keep agencies from wielding unbridled power, the ADMINISTRATIVE PROCEDURE ACT OF 1946 (APA) (5 U.S.C.A. § 551 [1982]) sets standards for the activities and rule making of all federal regulatory agencies. The APA provides federal courts with a framework for reviewing the rules made and procedures used by administrative agencies. Individual states have similar statutes to guide their own courts.