Constitutional Law for Business and E-Commerce
CONSTITUTIONAL LAW FOR
BUSINESS AND E-COMMERCE
Why can you not run into a crowded theater and yell “fire” when there is no fire?
The scales of justice have long been one of the key symbols of our judicial system.
the system’s effort to show evenhandedness and give fair weight to the evidence presented by competing
This symbol can also be used to illustrate the key learning objective of this chapter.
founding fathers struggled long and hard to create a balance of power among the three branches of
government in much the same way as the justice system attempts to weigh the evidence.
This process of
balancing among the competing sovereignties of federal, state, and local governments is a process of
constant evolution and, like the scale, will constantly shift with the addition and deletion of new political,
social, and demographic weights.
What makes this constitutional balancing both fascinating and yet sometimes traumatic is that
business people and their entities, represented by all sorts of firms from the smallest sole proprietorship
to the largest multinational corporation, are caught in the middle of these sovereign "turf wars."
today's legal environment, there is little doubt about the power of the government to create, regulate,
control, and even ban business activities.
The real question appears to be which flag to salute--the federal
government, the state, the local government, or some combination of all of the above?
Where the rules
of the game seem to shift almost daily between competing referees, it becomes most difficult for
businesses to play the game.
The basic ground rules for business are set out in the U.S. constitutional provisions directly
addressed to business, such as the Commerce Clause, and in larger protections accorded to all persons in
the Bill of Rights and other key amendments.
Many business entities are classified as
(law created entities which are given a limited and controlled legal existence) such as corporations or
Subsequent chapters will go into more detail on how and when these forms of doing business may
In the context of constitutional allocation of control over business activity, the most important
provision is the Supremacy Clause.
Under this clause, the national sovereign can preempt control over
any particular form of business it chooses to.
This clause, combined with very broad judicial
interpretation of the Commerce Clause, has been a part of the process which attempts to create an even
playing field for business, i.e., the federal sovereign has long believed that a states power to control
commerce under its constitutional police power should be harnessed if it encumbers the national flow of
commerce or if it somehow unduly favors local business at the cost of competing political entities such
as other cities, states, or even regional interests.
The balancing of the scale continues.