The U.S. Constitution is quite explicit when it comes to the powers of government. In the document, the powers of the federal government are enumerated, or listed, and the document then states that those powers not enumerated are reserved to the states and local governments. (Chemerinsky, 1998) This provision was put in place to limit the Federal Government’s involvement in day-to-day issues. (Chemerinsky, 1998)
The Federal government, despite the intent of the framers of the constitution to separate state and federal powers, has been encroaching steadily on those powers since the constitution was ratified. (Chemerinsky, 1998) One way in which the courts have allowed such encroachment is though liberal application of the Commerce Clause. (Chemerinsky, 1998) This clause states that Congress has the power to regulate interstate commerce. (Chemerinsky, 1998)
This has been interpreted in ways that make the Federal regulation of virtually all businesses that conduct their work across state lines constitutionally legitimate. (Chemerinsky, 1998) Even businesses who opperate only in one state but either ship items over statelines, or import from across state lines, have been interpreted to be governed by the federal government from this clause. It is for this reason that Federal regulatory agencies have such broad-based power under the constitution. (Chemerinsky, 1998) Even if the business does not conduct interactions across State lines the Supreme Court has states that the Federal Government can act upon that business if its actions affect interstate commerce. (Chemerinsky, 1998)This provision and its loose interpretation have allowed federal government agencies relatively free reign to regulate as they see fit. (Chemerinsky, 1998)
There are conflicts to this interpretation since it can clash with the existing understandings and interpretation of other amendments to the constitution. The one limitation to this regulation can be found in the Fifth Amendment in the Bill of rights. (Lawson, 1994) This states that due processed is guaranteed to any individual (or business) before punitive actions against persons or property can be taken. (Lawson, 1994) This has been expanded under the doctrine of Substantive due process, which indicates that federal laws that deny entities of property (such as money) must be clear and not overbroad. (Lawson, 1994)
It is this provision that comes into play in the scenario suggested in the hypothetical. In the hypothetical, a government agency, invoking a law that does not exist in writing has fined a business for the purpose of padding the agency’s budget. (Lawson, 1994) Under the concept of Substantive due process, unclear federal laws that do no exist in writing are not valid under the Constitution (Lawson, 1994). Hypothetical situations do not just exist as a thought exercise, but are important. Laws should not conflict with other laws. When they do one, it generally is an indicated that they are mutually exclusive and legislative or executive action in tandem with the courts must be taken in order to keep the rules straightforward.
The federal rule-making process is fairly formalized and straightforward. The methodology is outlined in the Administration Procedure Act. (APA) (Lawson, 1994) In order to become and enforceable federal regulation, a rule must go through a number of discrete steps. (Lawson, 1994) The APA defines a rule or regulation as
“[T]he whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency.” (Lawson, 1994)
Furthermore, the APA defines rulemaking as:
"[A]gency action which regulates the future conduct of either groups of persons or a single person(Lawson, 1994); it is essentially legislative in nature, not only because it operates in the future but because it is primarily concerned with policy considerations." (Lawson, 1994)
Given these definitions, it is clear that an agency head is not free to “make up” a law or regulation or impose a fine based on the made up law. (Lawson, 1994)
Furthermore, under the APA, all regulations have to be published in the Federal Register at least 30 days before they take effect. (Lawson, 1994) As the business owners “never heard” of the law, one can assume that it was unpublished, and therefore a violation of the APA. (Lawson, 1994) Also, many regulations have further requirements of public hearings before they take effect.
Federal regulations must pass muster in both Congress and the White House. Presidential oversight of regulation was established by executive order in 1993 by then-president Bill Clinton. (Lawson, 1994) Under this order, all regulations must be examined by the office of budget management to ensure that they are cost-effective. (Lawson, 1994) The Congressional Review Act places all federal regulations as subject to a 60-day review by Congress (Lawson, 1994)
The best way to challenge such a fine would be in the Federal court system. (Rabin, 1986) The business could bring action against the federal government arguing that the law under which the fine was levied violates the provisional due process clause of the fifth amendment of the United States Constitution. (Rabin, 1986) The plaintiff can point out that this provision calls for federal laws to be clear and well-articulated, and that the law that was imposed on the business did not meet this criteria because it was “made up” by the head of the agency imposing the fine. (Rabin, 1986)
If the case fails at the level of the federal courts, it can be appealed to the federal circuit court of appeals. (Rabin, 1986) This court will hear questions about the procedures and decisions made at the lower level. (Rabin, 1986) If they find reversible error, they may send the case back to the original jurisdiction to be re-tried or for them to be reviewed by the original courts. (Rabin, 1986)
If the business fails to gain a reversal on appeal, they can attempt to have the case reviewed by the US Supreme Court. (Rabin, 1986) They would do this by requesting a writ of certiorari, which is a request for the materials tendered by the Supreme Court to the lesser court. This would be practicle, if the supreme court weighed in on more decisions. In practice, very few cases that people desire to be heard before the supreme court actually end up there. (Rabin, 1986) Unfortunately, the US Supreme Court grants certiorari in only about 6% of the cases where it is requested. (Rabin, 1986) The US Supreme Court only takes cases that address issues of great public importance, or of particular interest to the public or the court. (Rabin, 1986) If the U.S. Supreme Court fails to grant a request, then the decision of the appeals court is considered to be upheld, and the business would have to pay. (Rabin, 1986)
Chemerinsky, Erwin, 1998 “Substantive Due Process” 15 Touro L. Rev. 1501
Lawson, Gary, 1994 “The Rise and Rise of the Administrative State” 107 Harvard Law Review 1231.
Rabin, Robert , 1986, “Federal Regulation in Historical Perspective” Stanford Law Review Vol. 38, No. 5 May, 1986