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BUSINESS LAW HOMEWORK NUMBER 4 ADMINISTRATIVE REGULATIONS 4-1. Rulemaking Procedures. The Atomic Energy Commission (AEC) was engaged in rulemaking proceedings for nuclear reactor safety. An environmental group sued the commission, arguing that its proceedings were inadequate. The commission had carefully complied with all requirements of the Administrative Procedure Act. The environmentalists argued, however, that the very hazardous and technical nature of the reactor safety issue required elaborate procedures above and beyond those set forth in the act. A federal court of appeals agreed and overturned the AEC rules. The commission appealed the case to the United States Supreme Court. How should the Court rule? Discuss. Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., 435 U.S. 519, 98 S. Ct. 1197, 55 L.Ed.2d 460 (1978) 4.2. Agency Investigations. A state statute required vehicle dismantlers—persons whose business includes dismantling automobiles and selling the parts—to be licensed and to keep records regarding the vehicles and parts in their possession. The statute also authorized warrantless administrative inspections; that is, without first obtaining a warrant, agents of the state department of motor vehicles or police officers could inspect a vehicle dismantler's license and records, as well as vehicles on the premises. Pursuant to this statute, police officers entered an automobile junkyard and asked to see the owner's license and records. The owner replied that he did not have the documents. The officers inspected the premises and discovered stolen vehicles and parts. Charged with possession of stolen property and unregistered operation as a vehicle dismantler, the junkyard owner argued that the warrantless inspection statute was unconstitutional under the Fourth Amendment. The trial court disagreed, reasoning that the junkyard business was a highly regulated industry. On appeal, the highest state court concluded that the statute had no true administrative purpose and impermissibly authorized searches whose only purpose was to discover stolen property. The state appealed to the United States Supreme Court. Should the Court uphold the statute? Discuss. New York v. Burger, 482 U.S. 691, 107 S.Ct. 2636, 96 L.Ed.2d 601 (1987)] 4.3 Arbitrary and Capricious Test. In 1977, the Department of Transportation (DOT) adopted a passive-restraint standard (known as Standard 208) that required new cars to have either air bags or automatic seat belts. By 1981, it had become clear that all of the major auto manufacturers would install automatic seat belts to comply with this rule. The DOT determined that most purchasers of cars would detach their automatic seat belts, rendering them ineffective. Consequently, the department repealed the regulation. State Farm Mutual Automobile Insurance Co. and other insurance companies sued in the District of Columbia Circuit Court of Appeals for a review of the DOT's repeal of the regulation. That court held that the repeal was arbitrary and capricious because the DOT had reversed its rule without sufficient support. The motor vehicle manufacturers, which initially had wanted to avoid the costs associated with implementing Standard 208, then appealed this decision to the United States Supreme Court. What will result? Motor Vehicle Manufacturers Association v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29, 103 S. Ct. 2856, 77 L.Ed.2d 443 (1983) 4.4 Judicial Review. American Message Centers (AMC) provides answering services to retailers. Calls are automatically forwarded to AMC, which pays for the calls. AMC obtains telephone service at a discount from major carriers, including Sprint. Sprint's tariff (a public document setting out rates and rules relating to Sprint's services) states that the "subscriber shall be responsible for the payment of all charges for service." When AMC learned that computer hackers had obtained the access code for its lines and had made nearly $160,000 worth of long-distance calls, it asked Sprint to absorb the cost. Sprint refused. AMC filed a complaint with the Federal Communications Commission (FCC), claiming in part that Sprint's tariff was vague and ambiguous, in violation of the Communications Act of 1934 and FCC rules. These laws require that a carrier's tariff "clearly and definitely" specify any "exceptions or conditions which in any way affect the rates named in the tariff." The FCC rejected AMC's complaint. AMC appealed the FCC's decision to a federal appellate court, claiming that the FCC's decision to reject AMC's complaint was arbitrary and capricious. What should the court decide? Discuss fully. American Message Centers v. Federal Communications Commission, 50 F.3d 35 (D.C. Cir. 1995)

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