Chapter 4: Constitutional Authority to Regulate Business Confederal form of government : Form of government created after the Revolutionary War through the Articles of Confederation—gave states authority to govern themselves and limited power to national government U.S. Constitution : created an entirely new form of federal government in which the national government and states share sovereign power o National government has the implied power to undertake actions necessary to carry out enumerated (expressly designated) powers o All other powers reserved to the states sunder the 10 th Amendment o States have police powers : broad right of state governments to regulate private activities to protect or promote the public order, healthy, safety, morals, and general welfare The Privileges and Immunities Clause : Article IV, Section 2 of the US Constitution provides the “Citizens of each state shall be entitled to all privileges and immunities of citizens in the several states o Prevents a states from imposing unreasonable burdens on citizens of another state— especially re: livelihood or doing business o When citizen of one state engages in basic/essential activities in another (“foreign state”) state, the foreign state must have substantial reason for treating nonresident differently than resident Foreign state must also prove discrimination is substantially related to state’s ultimate purpose in adopting the legislation or regulating activity The Full Faith and Credit Clause : Article IV, Section 1 of US Constitution provides “Full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state” o Applies only to civil matters o Ensures that rights established under deeds, wills, contracts, and similar instruments in one state will be honored by other states o Also ensure that any judicial decision with respect to such property rights will be honored and enforced in all states o Has contributed to unity of American citizens because it protects their legal rights as move from state to state Check and balances: Constitution created three branches of government (legislative=makes laws; judicial=interprets laws; executive branch: enforces laws) and allows each branch to limit the actions of the other two branches, thus limiting any one branch from exercising too much power The Commerce Clause : Article 1, Section 8 of US Constitution explicitly permits Congress to regulate interstate commerce—“commerce with foreign nations and among the several states, and with Indian Tribes” o Has had a greater impact on business than any other provision in the constitution o Prevents states from establishing laws and regulations that would interfere with trade and commerce among the states
o Gibbons v. Ogden (1824) : commerce within the states can also be regulated by the national government as long as the commerce substantially affected the commerce involving more than one state o
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