Business Law and the Legal Environment Study Set 1

Business

Quiz 6 :

Administrative Agencies

Quiz 6 :

Administrative Agencies

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New York City's charter authorized the New York City Board of Health to adopt a health code that it declared to have the force and effect of law. The board adopted a code that provided for the fluoridation of the public water supply. A suit was brought to enjoin the carrying out of this program on the grounds that it was unconstitutional and that money could not be spent to carry out such a program in the absence of a statute authorizing the expenditure. It was also claimed that the fluoridation program was unconstitutional because there were other means of reducing tooth decay; fluoridation was discriminatory by benefiting only children; it unlawfully imposed medication on children without their consent; and fluoridation was or may be dangerous to health. Was the code's provision valid? [ Paduano v. City of New York, 257 N.Y.S.2d 531]
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Case Facts:
NYC (defendant_) Board of Health is authorized to adopt health codes with full force and effect of law. The Board proposed fluoridation of public water supply. On the other end, a number of taxpayers (plaintiffs) sued claiming that the Board don't have authority to fund expenses for water fluoridation, and also claimed that they were more efficient means of reducing tooth decay, and fluoridation only benefits children.
Regardless of the Court ruling in favor of the Board of Health, the code's provision was not valid. Fluoridation is a health problem, which falls within the jurisdiction of Board of Health. but adopting such a health code for fluoridation of water is unconstitutional. Most of the developed countries, do not consume fluoridated water. the arguments in support of above points are discussed below:
• Fluoride is a chemical added to water for the purpose of medical treatment. All other water treatments improve the water's quality and make it safe for consumption, except fluoride, which does not do so.
• Unethical practice - state cannot force people to take a medication without their consent. Even doctors cannot force their patients to take a medication or treatment without their consent. So, it is not only unlawful, but unethical as well.
• Side effects of overdose - people drink different amount of water, so the dose of fluoride each individual receives, cannot be controlled by the board of Health. Controlling the dose of a medicine is critical.
• Fluoridated water is consumed by people of all age, health and it may not be advisable for every individual to consume fluoridated water.
• Nowadays people get fluoride from other non-water sources. so, there's actually no need for people to consume fluoridated water.
• Fluoride is not an essential nutrient, so excess consumption of fluoride is of no good use, but there are health risks.
• Fluoride accumulates in the bone, as kidneys are not able to excrete all the fluoride
Hence, one can consider that the provisions adopted in the health code by the board are not only invalid, but unconstitutional and could be harmful for health, rather than helping the cause of public health.

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The FDA was challenged by tobacco companies for its new rules that required the tobacco companies to put one of the FDA's 12 picture labels on its packaging. The tobacco companies argued that their First Amendment rights were violated by the rules, forcing them to speak in a certain way using government-mandated materials. The new labels were promulgated by both the FDA and the Department of Health and Human Services (HHS) pursuant to authority granted by Congress in 2009 under the Family Smoking Prevention and Tobacco Control Act. Under the law, the following nine textual statements were to be included on cigarette labels: WARNING: Cigarettes are addictive. WARNING: Tobacco smoke can harm your children. WARNING: Cigarettes cause fatal lung disease. WARNING: Cigarettes cause cancer. WARNING: Cigarettes cause strokes and heart disease. WARNING: Smoking during pregnancy can harm your baby. WARNING: Smoking can kill you. WARNING: Tobacco smoke causes fatal lung diseases in nonsmokers. WARNING: Quitting smoking now greatly reduces serious risks to your health. The act required that these warnings and graphic labels take up 50 percent of the cigarette package label and 20 percent of all cigarette ads. After publishing the proposed rule and receiving more than 1,700 comments, the FDA published its final rule in June 2011. Explain how the tobacco companies could challenge the rules. Discuss whether the rules will be set aside. [In the case of R.J. Reynolds Tobacco Company et al. v. FDA et al., 696 F.3d 1205 (D.C. Cir.)]
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FDA (Food and Drug Administration) passed a law which mandated the tobacco companies to picture one of the 12 labels proposed by the FDA and the health and human services (HHS) that covers 50 percent of the package label and 20 percent of all ads. The labels include messages which depict the negative and harmful effects of smoking. FDA published its final rules after collecting the comments of 1700 people.
The tobacco companies challenged the FDA that their first amendment rights were violated by the rules that forces them to speak in a way using government mandated materials.
According to the first amendment it is said that congress shall make no law respecting an establishment of religion, promoting a specific religion, or reducing the freedom of speech and expression of an individual, freedom of expression and to petition against the government for a grievance and the implied rights of association and belief.
In the above case the FDA has claimed that the rule will discourage smokers to quit and non-smokers from initiating the interest and has a substantial government interest. However, the tobacco companies can challenge the FDA by stating that the rule violates their freedom of speech to content under first amendment rights. Also there is no clear evidence and studies did not support that the graphic warning message will have an impact on the people and led to a reduction in smokers. Thus, the rules fail to serve the FDA's substantial interest and FDA is using its force to compelled commercial speech.
The rules can be set aside as they are found to be violating the freedom of speech rights under first amendment.

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Congress adopted a law to provide insurance to protect wheat farmers. The agency in charge of the program adopted regulations to govern applications for this insurance. These regulations were published in the Federal Register. Merrill applied for insurance, but his application did not comply with the regulations. He claimed that he was not bound by the regulations because he never knew they had been adopted. Is he bound by the regulations? [ Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380]
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Case summary
The Federal Crop Insurance Corp (FCIC) (petitioner) is an insurance company owned by the government, and in-charge of providing insurance to farmers. The petitioner set regulations governing applications for insurance and published it in the Federal Register. This is a publication detailing all current agency rules and proposed rules.
M (the respondent) applied for insurance which was accepted. When M's farms crops were destroyed, he requested insurance but, was denied by the FCIC, as he had reseed his land. M was unaware of that he was not supposed to reseed his land and thus sued to recover.
Case analysis
Ignorance to regulation is not an excuse to get rid of it. FCIC has mentioned about the regulation in the federal register to which M was unknown. Thus, FCIC is not liable to make up the loss to M. M is also covered under the Federal Crop Insurance Act and thus he is bounded by all the laws and regulations of the Act.

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Following the events of September 11, 2001, in which four airplanes crashed as a result of the presence of terrorists on those flights, the FAA concluded that it needed to implement new procedures for airports and flights. The new procedures for security and flights took effect when the airports reopened five days later. Why did the FAA not need to go through the promulgation and public comment processes and time periods to have the new rules take effect?
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What is the Federal Register? What role does it play in rulemaking? What is the difference between the Federal Register and the Code of Federal Regulations?
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Santa Monica adopted a rent control ordinance authorizing the Rent Control Board to set the amount of rents that could be charged. At a hearing before it, the board determined that McHugh was charging his tenants a rent higher than the maximum allowed. McHugh claimed that the action of the board was improper because there was no jury trial. Is McHugh correct? Why or why not? [ McHugh v. Santa Monica Rent Control Board, 777 P.2d 911 (Cal.)]
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The Federal Register contained the following provision from the Environmental Protection Agency on January 14, 2002: We, the U.S. Fish and Wildlife Service (Service), announce the re-opening of the comment period on the proposed listing of Lomatium cookii (Cook ' s lomatium) and Limnanthes floccosa ssp. grandiflora (large-flowered wooly meadowfoam) as endangered species under the Endangered Species Act of 1973, as amended (Act). We are re-opening the comment period to provide the public an opportunity to review additional information on the status, abundance, and distribution of these plants, and to request additional information and comments from the public regarding the proposed rule. Comments previously submitted need not be resubmitted as they will be incorporated into the public record as part of this extended comment period; all comments will be fully considered in the final rule. DATES: We will accept public comments until March 15, 2002. What was the EPA doing and why? What could those who had concerns do at that point?
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The Department of Health and Human Services has proposed new guidelines for the interpretation of federal statutes on gifts, incentives, and other benefits bestowed on physicians by pharmaceutical companies. The areas on which the interpretation focused follow: • Paying doctors to act as consultants or market researchers for prescription drugs • Paying pharmacies fees to switch patients to new drugs • Providing grants, scholarships, and anything more than nominal gifts to physicians for time, information sessions, and so on, on new drugs 35 The Office of Inspector General is handling the new rules interpretation and has established a public comment period of 60 days. Explain the purpose of the public comment period. What ethical issues do the regulations attempt to address?
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The Tacoma-Pierce County Health Department conducted an investigation into the quality of care provided by ambulance service providers in its jurisdiction. On the basis of that investigation, the department issued a set of temporary rules and regulations that established minimum requirements for equipment, drugs, and service availability for ambulance service providers in Pierce County. The Tacoma News wanted to publish an article on the matter and sought discovery of everything that had led to the adoption of the regulations, including all details of the investigation made by the health department. The health department objected to disclosing the names of the persons who had volunteered information on which the department had based its action and the names of the ambulance companies. Were the names subject to a Freedom of Information Act (FOIA) request? [ Tacoma News, Inc. v. Tacoma-Pierce County Health Dept., 778 P.2d 1066 (Wash. App.)]
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The planning commissioner and a real estate developer planned to meet to discuss rezoning certain land that would permit the real estate developer to construct certain buildings not allowed under the then-existing zoning law. A homeowners association claimed it had the right to be present at the meeting. This claim was objected to on the theory that the state's Open Meetings Act applied only to meetings of specified government units and did not extend to a meeting between one of them and an outsider. Was this objection valid?
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The Consumer Product Safety Commission is reconsidering a rule it first proposed in 1997 that would require child-resistant caps on household products, including cosmetics. When the rule was first proposed in 1997, it was resisted by the cosmetics industry and abandoned. However, in May 2001, a 16-month-old baby died after drinking baby oil from a bottle with a pulltab cap. The proposed rule would cover products such as baby oil and suntan lotion and any products containing hydrocarbons such as cleansers and spot removers. The danger, according to the commission, is simply the inhalation by children, not necessarily the actual ingestion of the products. Five children have died from inhaling such fumes since 1993, and 6,400 children under the age of five were brought into emergency rooms and/or hospitalized for treatment after breathing in hydrocarbons. There is no medical treatment for the inhalation of hydrocarbons. Several companies in the suntan oil/lotion industry have supported the new regulations. The head of a consumer group has said, "We know these products cause death and injury. That is all we need to know." 34 What process must the CPSC follow to promulgate the rules? What do you think of the consumer group head's statement? Will that statement alone justify the rulemaking?
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The Michigan Freedom of Information Act declares that it is the state's policy to give all persons full information about the actions of the government and that "the people shall be informed so that they may participate in the democratic process." The union of clerical workers at Michigan State University requested the trustees of the university to give them the names and addresses of persons making monetary donations to the university. Michigan State objected because the disclosure of addresses was a violation of the right of privacy. Decide. [ Clerical-Technical Union of Michigan State University v. Board of Trustees of Michigan State University, 475 N.W.2d 373 (Mich.)]
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The Endangered Species Act (ESA) charges the National Marine Fisheries Service (a federal agency) with the duty to "ensure" that any proposed action by the Council does not "jeopardize" any threatened or endangered species. The Steller sea lion is on the list of endangered species. The agency developed a North Pacific marine fishery plan that permitted significant harvest of fish by commercial fisheries in the area. Greenpeace, an environmental group, challenged the agency on the grounds that the plan was not based on a sufficient number of biological studies on the impact of the allowed fishing on the Steller sea lion. Greenpeace's biologic opinion concluded that the fishery plan would reduce the level of food for the sea lions by about 40 percent to 60 percent, if the juvenile fish were not counted in that figure. Greenpeace's expert maintained that counting juvenile fish was misleading because they were not capable of reproducing and the government agency's figure was, as a result, much lower at 22 percent. What would Greenpeace need to show to be successful in challenging the agency's fishery plan? [ Greenpeace, American Oceans Campaign v. National Marine Fisheries Service, 237 F. Supp. 2d 1181 (W.D. Wash.)]
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Macon County Landfill Corp. applied for permission to expand the boundaries of its landfill. Tate and others opposed the application. After a number of hearings, the appropriate agency granted the requested permission to expand. Tate appealed and claimed that the agency had made a wrong decision on the basis of the evidence presented. Will the court determine whether the correct decision was made? [ Tate v. Illinois Pollution Control Board, 544 N.E.2d 1176 (Ill. App.)]
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