Q&A Hero

Q: The FTC focuses on _____ when it attacks unfair acts or practices. A. free and fair trade B. antitrust action C. consumer harm D. anticompetitive behavior

Q: Section 5 of the FTC Act normally is NOT violated when sellers make: A. exaggerated sales talk in their advertisements. B. deceptive omissions from their advertisements. C. false or misleading claims of an implied nature. D. claims regarding taste or smell of their products.

Q: Which of the following is most likely to violate Section 5 of the FTC Act? A. "Puffing" statements B. Statements of opinion C. Deceptive omissions D. Sales talk

Q: The Federal Trade Commission recently instituted an adjudicative proceeding against OK Corp., a manufacturer of inflatable dolls. OK is alleged to have made deceptive statements concerning the quality of its product in nationwide advertisements. Which of the following statements is accurate? A. If the statements in the OK ads were material misrepresentation that could mislead reasonable consumers, the FTC's deception standard would require a conclusion that OK did engage in deceptive advertising. B. OK may be held to have engaged in deceptive advertising even if all company employees and executives involved in advertising decisions believed in good faith that false statements in the ads were true. C. If the FTC proves that the intent in OK advertisements was to offend reasonable consumers, then an administrative law judge could order OK to cease making such an advertising claim. D. OK cannot be held to have engaged in deceptive advertising if no consumers have actually been deceived by the OK ads.

Q: EU countries depend more on litigation instituted by private parties as the chief legal means of dealing with misleading advertising. In this sense, the approach taken by EU nations resembles advertising regulation in the United States under: A. Section 5 of the FTC Act. B. Section 4 of the Clayton Act. C. Section 16(c) of the Sherman Act. D. Section 43(a) of the Lanham Act.

Q: Many alleged violations of statutes or trade regulation rules are never adjudicated by the FTC. Instead, they are settled through a _____. A. cease-and-desist order B. standard $16,000 fine per violation C. consent order D. standard $26,000 fine per violation

Q: An advertisement is in violation of the Federal Trade Commission Act only when it: A. is likely to mislead any consumer. B. is likely to mislead a consumer who acts reasonably. C. actually deceives any consumer. D. does not involve a material misrepresentation.

Q: What is the term for the FTC's interpretation of the laws it administers? A. Industry guides B. Advisory appeal C. Executive order D. Legislative act

Q: When the Federal Trade Commission conducts an administrative hearing, the presiding judge in this hearing is a(n): A. administrative law judge. B. federal district court judge. C. arbitration judge. D. FTC commissioner.

Q: The usual penalty resulting from a final decision against the respondent is a: A. fine of $20,000. B. cease-and-desist order. C. fine of $10,000. D. consent order.

Q: A credit card issuer that fails to comply with the Fair Credit Billing Act forfeits its right to collect the disputed amount from the cardholder.

Q: The Consumer Financial Protection Bureau (CFPB) has authority to take regulatory action to prohibit hidden fees charged by a financial institution.

Q: The Fair Debt Collection Practices Act (FDCPA) does not bar debt collectors from contacting third parties such as the debtor's employer, relatives, or friends.

Q: The main federal body concerned with the safety of consumer products is the Consumer Product Safety Commission (CPSC).

Q: The FTC commissioners serve for: A. five-year terms. B. staggered five-year terms. C. fixed seven-year terms. D. staggered seven-year terms.

Q: The Equal Credit Opportunity Act's (ECOA) provisions apply only in the consumer credit setting but not in the commercial credit context.

Q: The TILA specifies that if a home equity plan involves a variable interest rate, the "index rate" to which changes in the APR are pegged must be based on some publicly available rate and must not be under the creditor's control.

Q: Besides imposing duties on consumer reporting agencies, the Fair Credit Reporting Act (FCRA) imposes duties on users of credit reports generated by such agencies.

Q: An in-depth consumer credit report is a credit report that includes information on a person's character, reputation, personal traits, or mode of living and is based on interviews with neighbors, friends, associates, and the like.

Q: The FACT Act was a 2003 amendment to the Fair Credit Reporting Act that created protections for individuals that were the victims of identity theft.

Q: The do-not-call registry is unconstitutional because it discriminates and does not apply to charitable and political callers.

Q: According to the Magnuson-Moss Warranty Act of 1975, a consumer is a buyer or transferee who either uses the product himself or sells it to another consumer.

Q: If a $100 replacement part for a piece of manufacturing equipment is sold to a manufacturing plant, the Magnuson-Moss Act does not apply to the sale.

Q: Much of the information contained in a typical monthly credit card statement sent to a consumer is compulsorily required by the Truth in Lending Act.

Q: The TILA also deals in consumer credit advertising and thus prevents a creditor from "baiting" customers.

Q: Under the FTC section 5, in proving deception of a consumer it is not important if the consumer was acting reasonably when they were taken advantage of.

Q: Corrective advertising is a requirement from the FTC for a seller to use advertisements to correct false impressions from past advertising. TRUE A remedy from the FTC is corrective advertising which requires the seller's future advertisements to correct false impressions created by past advertising.

Q: The obligations imposed on telemarketers by the FTC's Telemarketing Sales Rule do not apply to sellers that solicit sales through mailed catalogs and then receive consumers' orders by telephone.

Q: Joe has recently learnt about the Privacy Act of 1974 from his friend Shawn. That has reassured him that his personal tax documents available with the Internal Revenue Service are unlikely to be disclosed by IRS to third parties without his written consent. Is Joe right?

Q: The Federal Trade Commission is a state agency.

Q: The Federal Trade Commission's (FTC) principal mission is to ensure that the economy is free and fair.

Q: An order telling the respondent to cease engaging in the deceptive or unfair conduct is the usual penalty resulting, from a successful FTC adjudicative proceeding.

Q: The Securities and Exchange Commission (SEC) is investigating Bob DeSlob for possible violations of federal securities laws. If the violations occurred, DeSlob could be subjected to adverse civil consequences. As part of this investigation, the SEC has issued a subpoena duces tecum calling for DeSlob to produce copies of his federal income tax returns for the years 2000 through 2002. Assume that the investigation is of the sort authorized by law and is being conducted for a proper purpose. Also assume that it is plausible for the SEC to believe that the tax return copies could contain information relevant to the investigation. DeSlob wishes to have the subpoena duces tecum quashed (i.e., invalidated by court order). What would be the strongest argument for DeSlob to make to the court?

Q: Assume that sellers of alcohol for consumption on the premises (i.e., bars, taverns, and the like) are heavily regulated under Montana law. The state's statutes and regulations impose a licensing requirement, mandate the posting of signs (in open-to-the-public portions of the bar) concerning the minimum drinking age and the possible hazards of alcohol consumption, and establish numerous other requirements that bar owners must meet. Montana law also authorizes the Montana Liquor Control Commission (MLCC), a state agency that administers the statutes and regulations on sellers of alcohol, to conduct administrative inspections of bars and taverns in order to determine whether the required signs are posted and the other legal requirements are being met. The statute providing for these inspections states that the MLCC need not obtain any sort of warrant before conducting such an inspection. MLCC investigators recently conducted a warrantless inspection of the Pink Elephant Lounge, a Butte, Montana tavern owned by Edna Sternwallow. The inspection revealed the absence of the required drinking age and warning signs. Following a hearing, the five MLCC commissioners suspended the Pink Elephant's liquor license for a year (a penalty allowed by Montana law for a violation of the sign-posting requirement). Sternwallow appealed to an appropriate Montana court, which is conducting a de novo review according to state law. Sternwallow argues that the evidence obtained through the warrantless inspection should be excluded because the inspection violated the Fourth Amendment. Will Sternwallow succeed with this argument? Explain.

Q: Sleazeco, Inc. was the respondent in an adjudicative proceeding initiated against it by the Federal Trade Commission. Dissatisfied with the decision rendered by the administrative law judge, Sleazeco wishes to appeal. Where does Sleazeco take its appeal? What is the nature of the review in such an appeal?

Q: Investigative reporter Maxine McRaker filed a Freedom of Information Act (FOIA) request that the Food and Drug Administration (FDA) provide her copies of certain documents in its possession. A private citizen, Al Kaseltzer, became concerned when he learned that the FDA was likely to give McRaker the requested copies. Kaseltzer was disturbed because he believed that the documents contained medical information about him that, if disclosed, would constitute an invasion of his privacy. Alleging that the reason just mentioned made the requested documents exempt from disclosure under the FOIA, Kaseltzer sued the FDA in an effort to obtain a court order barring it from giving McRaker access to the documents. Assuming that Kaseltzer proves his allegation about the documents' references to him, should he win the case? Why or why not?

Q: _____ allows individuals to inspect files that agencies maintain on them and to request that erroneous or incomplete records be corrected. A. The Privacy Act of 1974 B. The Disclosure act C. The Government in the Sunshine Act of 1976 D. The Freedom of Information Act

Q: While preparing his tax returns for 2010 year, Harry discovers that his 2008 tax returns has errors. Those errors led him to pay more income tax that year than he would have otherwise paid. Harry wants to inspect his 2008 tax files that IRS has and request them to be corrected. Under which Act can he place this request? A. The Freedom of Information Act B. The Disclosure act C. The Government in the Sunshine Act of 1976 D. The Privacy Act of 1974

Q: Which of the following is an accurate statement about the Privacy Act of 1974? A. It bars administrative agencies from gathering information about private citizens unless the agencies have obtained a court order justifying the information gathering. B. It is frequently used by public interest groups to obtain information useful to the advancement of their public causes. C. It ensures that every portion of every meeting of an agency shall be open to public observation. D. It allows persons to inspect files kept on them by administrative agencies and to request corrections of erroneous or incomplete information.

Q: The Government in the Sunshine Act had what as its purpose? A. That meetings of government agencies are open to public observation B. To enable the government to operate for profit corporations C. To regulate International owned corporations D. To regulate healthcare industry

Q: When courts review formal agency adjudications or formal rulemaking, the APA calls for the application of a(n): A. substantial evidence test. B. beyond reasonable doubt review. C. de novo review. D. arbitrary and capricious test.

Q: The judicial standard of review often used in cases involving informal agency adjudications or rulemaking is the: A. substantial evidence test. B. beyond reasonable doubt review. C. de novo review. D. arbitrary and capricious test.

Q: When an agency is asked to release documents that are exempted from disclosure under the Freedom of Information Act, the agency: A. has a statutory obligation to refuse disclosure of the exempted documents. B. may refuse disclosure but does not have an affirmative duty to do so. C. can be compelled by individuals named in exempted documents to deny a request of disclosure of those documents. D. is liable for punitive damages if it discloses the exempted documents.

Q: Under the Freedom of Information Act (FOIA), administrative agencies must normally respond to public requests for documents within _____ after such a request has been received. A. 30 days B. 20 days C. 10 days D. 40 days

Q: The term ripeness in reference to a lawsuit arising out of administrative decisions means: A. The plaintiff has been victorious in their actions against the agency B. The plaintiff has exhausted all necessary administrative remedies before engaging in judicial remedies C. The plaintiff is pro-se, meaning they have no attorney and represent themselves D. The action is against an international agency

Q: The Equal Employment Opportunity Commission (EEOC) was formed to regulate on a variety of issues pertaining to discrimination in employment-related contexts. If the EEOC were to promulgate a regulation specifying safety standards for chainsaws in workplaces, this action could best be attacked as being: A. obiter dictum. B. inter alia. C. nonobstante veredicto. D. ultra vires.

Q: In order for a party to successfully bring a lawsuit in federal court challenging a federal administrative agency decision, that party must first: A. sue in state court, and only then in federal court. B. exhaust all necessary administrative remedies. C. obtain a writ of certiorari. D. submit the challenge to the Inspector General's office for review.

Q: Which of the following is the most rigorous standard of judicial review of agency factual judgments as provided by the APA? A. Beyond reasonable doubt review B. Substantial evidence test C. De novo review D. Arbitrary and capricious test

Q: _____ legislation ensures periodic congressional review of the initial decision to delegate legislative authority to an administrative agency. A. Conditional B. Sunset C. Class D. Subordinate

Q: The _____ exercise(s) the greatest control over agency behavior. A. President B. states C. Congress D. courts

Q: An individual or organization seeking judicial review of an agency action must first demonstrate that: A. the agency action being challenged is reviewable. B. the required consent orders have been signed. C. other administrative remedies have not been used. D. the individual or organization has no standing to sue.

Q: _____ rulemaking procedures provide limited rights to interested parties to cross-examine agency witnesses. A. Formal B. Executive C. Informal D. Hybrid

Q: Who, among the following, is NOT present during administrative adjudications? A. Respondent B. Jury C. Complainant D. Judge

Q: Cases in administrative proceedings are heard by a(n): A. adjudicating chairperson. B. administrative law judge. C. executive judge. D. judicial commissioner.

Q: Respondents who sign consent orders: A. agree to discontinue the business practice that triggered the agency action. B. admit to their wrongdoing. C. retain all rights to judicial review. D. need not accept sanctions imposed by the agency.

Q: _____ agencies are required to prepare cost-benefit and least-cost analyses for all major proposed rules and to submit this information to the Office of Management and Budget (OMB) for review prior to seeking public comments. A. Independent B. State C. Public interest D. Executive

Q: The process by which agency _____ rules are promulgated is highly regulated by the APA and closely scrutinized by the courts. A. procedural B. interpretive C. administrative D. legislative

Q: A rule made by an agency through the informal rulemaking method can become effective only: A. 45 days after the publication of the rule in its final form in the Federal Register. B. 45 days after the publication of a "Notice of Proposed Rulemaking" in the Federal Register. C. 30 days after the publication of the rule in its final form in the Federal Register. D. 30 days after the publication of a "Notice of Proposed Rulemaking" in the Federal Register.

Q: An agency rule created through a(n) _____ rulemaking method reduces the chances of voluntary compliance. A. informal B. executive C. democratic D. hybrid

Q: An agency's legislative rules are considered as binding in nature and carry the full force and effect of law, provided: A. they are in consonance with the Administrative Procedure Act only. B. they are in consonance with the Constitution but not necessarily in consonance with the enabling legislation. C. they are in consonance with the enabling legislation, but not necessarily with the Constitution. D. they are in consonance with the enabling legislation, the APA as well as the Constitution.

Q: The Internal Revenue Service (IRS) has recently issued a subpoena duces tecum to Values Corp. The IRS wants access to the last five year's tax returns and related documents of Values to ensure that Values has met all its tax liabilities. Values claims that all its tax papers are in order and IRS's motive is to harass political opponents of the incumbent administration (Values was one of the top 100 donors during the last election year). The strongest argument that Values may make concerning the subpoena is that the subpoena: A. is invalid because the IRS investigation is not being conducted for a legitimate purpose. B. need not be obeyed because it violates Values' Fifth Amendment privilege against compulsory testimonial self-incrimination. C. need not be obeyed to its fullest extent because it is not sufficiently specific and is unreasonably burdensome. D. is invalid unless the IRS satisfies the "probable cause" standard required by the Fourth Amendment for the issuance of a search warrant.

Q: Agencies that invoke a power to search and seize evidence as part of an effort to prove a regulatory violation are subject to what constitutional prohibitions? A. First Amendment Freedom of Press B. Fourth Amendment Protection against Unreasonable Searches C. Tenth Amendment State Powers D. Second Amendment Right to Bear Arms

Q: All agency rules are compiled and published in the: A. Code of State Regulations. B. Code of Corporation Regulations. C. Code of Specific Regulations. D. Code of Federal Regulations.

Q: An agency's interpretive rules: A. have the full force and effect of law. B. specify how the agency will conduct its hearings. C. are not binding on businesses and the courts. D. are seldom heeded by business because of their advisory nature.

Q: Acme Corp. asserted in a magazine advertisement that its electric-powered bunion sander will remove bunions from users' feet twice as fast as any other bunion sander on the market today. As part of an investigation into whether this advertising claim was deceptive, the Federal Trade Commission (FTC) issued a subpoena demanding that Acme produce all of its records regarding tests it has performed to substantiate the performance claim for the bunion sander. The subpoena also demanded production of all records of tests to substantiate any performance claims made by Acme during the past four years regarding each of the 32 other products manufactured by Acme. Four of these other products were electric-powered products in the personal care category. The remaining products were either lawn care products or nonelectric tools. The strongest argument that Acme may make concerning the subpoena is that the subpoena: A. is invalid because the FTC investigation is not being conducted for a legitimate purpose. B. need not be obeyed because it violates Acme's Fifth Amendment privilege against compulsory testimonial self-incrimination. C. need not be obeyed to its fullest extent because the portion dealing with records on most of Acme's other products is not sufficiently specific and is unreasonably burdensome. D. is invalid unless the FTC satisfies the "probable cause" standard required by the Fourth Amendment for the issuance of a search warrant.

Q: Which of the following is true about an agency's informal power? A. An agency's informal powers enjoy the full force and effect of law. B. An agency's informal powers have the same legal force of formal agency regulations. C. An agency's informal powers and its formal actions are subject to similar constraints. D. An agency's informal powers play a major role in shaping the behavior of regulated industries.

Q: An administrative agency is most likely to use a subpoena to compel information from: A. public interest groups. B. businesses subject to regulation. C. customers or competitors. D. other regulatory agencies.

Q: Assume that the Federal Trade Commission (FTC) is conducting a hearing. In order to obtain certain documents relevant to its investigation, the FTC need not: A. ensure that the investigation is being conducted for a legitimate purpose. B. confirm that the information it seeks is relevant to its purpose. C. possess "probable cause" in support of regular search warrants. D. ensure that the subpoena it issues adequately describes the information it seeks.

Q: Which of the following agencies is an executive agency? A. The Environmental Protection Agency B. The Consumer Product Safety Commission C. The National Labor Relations Board D. The Internal Revenue Service

Q: Which of the following is an accurate statement about powers delegated to and possessed by administrative agencies? A. The most important administrative agencies typically possess rulemaking powers but lack adjudicatory powers. B. An agency's rulemaking power would be classified as discretionary power rather than ministerial. C. Modern courts tend not to uphold the validity of broad delegations of power by Congress to administrative agencies. D. Most administrative agencies are given restricted powers to comply with the constitutional principle of separation of powers.

Q: Which of the following powers of administrative agencies is largely ministerial in nature? A. Performing routine duties that are imposed by law. B. Conducting proceedings to determine regulatory violations. C. Creating rules that specify how the agency will conduct itself. D. Gathering information about business practices and activities.

Q: One of the founding principles of our government is separation of powers. How do administrative agencies tend to conform to, or violate this principle? A. They tend to violate this principle because they perform all three functions of government. B. They tend to conform to this principle because most commissioners or board members are appointed by the President. C. They tend to conform to this principle because they only follow the law, and do not make any law. D. They tend to violate this principle because they are created by Congress through passing of enabling legislations.

Q: The Department of Homeland Security: A. is an executive administrative agency. B. is a non-profit organization. C. is a cabinet-level department. D. has no effect on governmental organization.

Q: Commissioners or board members of which of the following can be removed only for cause? A. The Occupational Safety and Health Administration B. The Food and Drug Administration C. The Internal Revenue Service D. The Interstate Commerce Commission

Q: Which of the following is an executive administrative agency? A. The National Labor Relations Board B. The Equal Employment Opportunity Commission C. The Internal Revenue Service D. The Interstate Commerce Commission

Q: The difference between executive agencies and independent agencies is that: A. independent agency heads are appointed by Congress. B. independent agency heads serve fixed terms in office. C. executive agency heads are appointed by executives of corporations. D. executive agency heads can be removed by Congress.

Q: The _____ was the first administrative agency created by Congress. A. Interstate Commerce Commission B. Occupational Safety and Health Administration C. Food and Drug Administration D. Internal Revenue Service

Q: Administrative agencies are what kind of bodies? A. Commercial B. Government C. International D. Corporate

Q: Courts tend to approve broad delegations of power by Congress to an administrative agency when Congress has: A. effectively isolated the judicial powers of the agency. B. changed the enabling legislation appropriately. C. expressed an intelligible principle to guide the agency's actions. D. received approval of the President for such delegation of power.

Q: Which of the following is true regarding the principle of separation of powers? A. The Constitution seeks to ensure that governmental power remains accountable to the public will. B. The congressional delegation of legislative power to an agency in its enabling legislation may never be challenged. C. Congress is allowed to create an administrative agency only if Congress, rather than the President, will appoint the commissioners or board members of the agency. D. The President can allow the Supreme Court to overturn very broad delegation of power to administrative agencies.