Quiz 44: Consumer Law

Business

When evaluating agency rules, courts use a "arbitrary and capricious" standard. These include the following aspects: ? whether the agency failed to give a rational explanation for the rule ? if the agency changed a previous rule without justifying it ? if the agency used legally inappropriate factors when making the rule ? if the rule was made contrary to evidence. Furthermore, the agency must give notice of the proposed rules and make it available to the public. Following notice, the agency must give people time to comment on the rule (i.e. more than 30 days). The agency must then review the comments and publish the final rule for the public. If the following procedure has been followed, then the rule will probably be found valid.

SEC is an independent regulatory agency. It regulates the nations stock exchanges in which shares of stock are brought and sold, enforces the securities laws which require full disclosure of the financial profiles of companies that wish to sell stock and bonds to the public.

The Administrative Procedure Act (APA) sets forth procedures in adopting rules. The courts will generally not mandate agencies to follow other procedures, unless they are of the agency's own making. In this case, the FDA has passed additional rules and is failing to follow them. Thus, the court will most likely rule in the food producers' favor.

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