PAYMENT OF ATTORNEYS' FEES

Federal regulation of the private sector has burdened small business in particular with paperwork, increasing costs, and general frustration with seemingly frivolous regulations and guidelines. More importantly, though, the small business community has found itself the object of increasing abuse by regulatory agencies which use their statutory authority to seek rulings against small firms which, unlike the large corporations, haven't adequate resources to sustain a protracted legal battle with the government. This statutory abuse by certain agencies not only establishes precedents for rulings against larger firms, but builds the "batting averages” of the agency to justify its very existence and additional appropriations from Congress. Thus, the agency, its staff, and the regulatory process are further entrenched in the government.

A decision, right or wrong, by an official of the regulatory agency has caused more than just a few companies to go out of business. And even if the ruling has been proven wrong, a bankrupt company has no recourse to suing the government or righting the case through the appellate procedures-it simply cannot afford the cost.

The Equal Access to Justice Act of 1980 provides redress for small business. It is imperative that this legislation be implemented to the fullest degree possible, with the Small Business Committees of the House and Senate assuming an oversight function.

RESOLVED

The Small Business Legislative Council belleves that legislation providing for the payment of attorneys' fees to individuals and small businesses prevailing in civil or administrative cases against the federal government was a first step toward restraining arbitrary regulatory proceedings. Since many cases result in a bureaucratic or administrative denial of Justice to those unable to afford the extraordinary legal costs involved, the legislation providing for attorney fee reimbursement can restore to those abused their right to seek legal redress for damages done.

Model implementation regulations of the Equal Access to Justice Act should be drafted only after Congressional hearings, with extensive input from federal agencies and the private sector.

CURBING REGULATORY ABUSE BY CONGRESSIONAL VETO

As part of its oversight function, Congress has the duty to determine whether the agencies it has created are issuing rules and regulations contrary to law, inconsistent with legislative intent, and going beyond the statute it is supposed to implement.

When an agency does commit abuse, the damage to small business subject to such rule or regulation may be irrevocable. Therefore a review period of 60 days or longer is essential.

Here are some of the reasons why Congress should exercise veto power over proposed regulations:

• In spite of the fact that the Congress of the United States has ordered the FTC to afford opportunity for oral presentations to all parties desiring to testify in Rulemaking proceedings (P.L. 93-636), the Commission continually ignores the law.

• In another area, the FTC allows staff reports, assumably stating facts, to be entered into the Rulemaking record, yet refuses to allow those staff members to be cross-examined concerning those statements. This practice is being carried on despite a clear legislative imperative opposing the practice (Cong. Record, December 19, 1974, pp.41405-41408).

• The Magnuson-Moss FTC Improvement Act authorized the FTC to designate those acts or practices which would be henceforth deemed unfair or deceptive on an industry-by-industry basis.

There are now many Rulemaking proceedings being conducted by the FTC in various stages of completion. Uniformly, these Rulemaking proceedings are directed at small business and its customers. The impact of these Rules when enacted will create unfair

RESOLVED

and unnecessary economic hardships to countless small business enterprises which lack the resources to represent themselves effectively against the institutional attack that tends to undermine their very existence. Congress has warned the Commission concerning this very eventuality, and had built into the text of the law a requirement that the FTC promulgate a "statement as to the economic effect of the rule, taking into account as to the economic effect on small business and consumers." This statement of the competitive impact of the proposed Rule on small scale enterprise should be made when the promulgation of the Rule is initially proposed. Such competitive impact statements should also be subject to administrative fact finding and require a full opportunity for judicial review as an essential pre-condition to the adoption of such a Rule.

The need for overseeing the bureaucracy and its regulatory activities and for action to curb abuses of such activities is widely recognized. President Carter named a Regulatory Council for the express purpose of reforming regulatory procedures, and eliminating areas of duplication, overlap and inconsistency. President Reagan has continued and expanded this effort.

However, more needs to be done. The Regulatory group, Chaired by Vice President Bush, is composed of representatives of the Executive branch regulatory agencies and departments, but has no authority, power or relevancy to the regulatory activities of the independent regulatory agencies which are not a part of the Executive branch of the government, and are not subject to oversight, supervision or direction from the President or any of the departments under his control. Consequently these independent regulatory agencies, as arms of the Congress, have only one overseer: The Congress.

Small Business Legislative Council supports, IN
PRINCIPLE, the establishment of a uniform proce-
dure for Congressional review of the activities and
regulations of "Independent regulatory" agencies
(those agencies which are not in the Executive branch
but are arms of Congress, such as the ICC, FTC,
FCC, SEC, CAB, and FRB) which may be contrary
to law or inconsistent with Congressional intent, and
permitting either the House of Representatives or the
Senate to prevent an objectionable regulation from
going into effect by passage of a simple regulation.

AGENCY FOR CONSUMER ADVOCACY

The Small Business Legislative Council opposes the establishment of any agency purporting to represent consumers and having the power to intervene in proceedings before other federal agencies and in the courts. SBLC does support a more adequate functioning of consumer interest sections in existing agencies. SBLC decries attempts at placating small businesses by any "so-called" exemptions. By Executive Order, the President's Consumer Advisor has been granted oversight authority over consumer programs in all agencies of government, thus negating the need for a separate agency.

The Small Business Legislative Council supports
legislation authorizing a small business to petition a
district court for a magistrate to review a fine, cita-
tion or order of an Agency within 30 days of the rul-
ing, where the direct dollar value of such fine, cita-
tion or order, or any part thereof, is $2,500 or less
and such review does not require invalidation of
statute. If the magistrate determines that the citation,
order or fine is inappropriate to the alleged offense,
inconsistent with previous interpretation of pertinent
regulations or inequitable, he may order the Agency
to rescind or modify the citation, order or fine.
Where a small business has petitioned a district court
for a magistrate to conduct pending proceedings, the
fine, citation or order shall not be enforceable until a
decision has been rendered, except when failure to
enforce the fine, citation or order would result in im-
minent danger to the health or safety of any person.