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Unformatted text preview: Chapter 4:
to Regulate Business Constitutional Law
q Public Law q Deals with rights &
powers of government
powers q Source of power to regulate business §1: Constitutional Powers of the
q Constitution established a federal form
of government with checks and
balances among three branches:
executive, legislative and judicial.
executive, q National government has limited,
enumerated powers delegated from
States. Federal Legislative Powers
(Article I, Section 8) q States have the rest
(Tenth amendment) Exclusive Federal Power
q Bankruptcy q Postal Service q Patents & Copyrights q Currency q Wage War q Treaties Concurrent Power
q Taxation q Spending q Police Power
(regulate public health, safety, & welfare)
(regulate U.S. Commerce Clause
q Power to regulate interstate commerce
defined in Gibbons v. Ogden (1824).
(1824). q Expansion to private businesses began with
Wickard v. Fillburn (1942).
(1942). q Today, Commerce Clause authorizes the
national government to regulate virtually any
business enterprise, including internet. q Limits: U.S. v. Lopez (1995), Alden v. Maine
(1999). This means congress can regulate
even LOCAL business activity IF
such activity directly or indirectly
impacts interstate commerce.
NOTE: Vast Power in Congress State Commerce
q States possess inherent police powers to
regulate health, safety, public order,
morals and general welfare.
morals q State laws that substantially interfere
with interstate commerce will be struck
q Raymond Motor v. Rice (1978). U.S. Supremacy Clause
q Article VI of the Constitution
“Supreme Law of the Land.”
“Supreme q In case of direct conflict between state
and federal law, state law is invalid.
and q Congress can preempt states. Preemption
How to determine congressional intent to
preempt the field?
q Its express statement in legislation q By inference from
Persuasiveness of federal regulation
Need for uniformity
Danger of conflict between concurrent
federal & state Regulations
federal §2: Business and
the Bill of Rights
q Bill of Rights are not absolute.
Bill q Originally the Bill of Rights was a limit
on the national government’s powers.
on q During the early 1900’s, the Supreme
Court applied the Bill of Rights to the
States via the “due process” clause of
the 14th amendment.
the Free Speech
q First limit on governmental power q Symbolic Speech – gestures, movements,
clothing, other forms of expressive conduct
q Texas v. Johnson (1989). (American flag
burning) q R.A.V. vs. City of St.Paul (1992). (bias(1992).
motivated disorderly conduct)
motivated Commercial Speech
q q Advertising is protected speech, but less
q Implement substantial government
interest; q Directly advance that interest; and q Go no further than necessary. q Bad Frog Brewery (1998).
(1998). Corporate Political Speech
Afforded significant protection by the first
amendment but not to the degree of speech of
q First National v. Bellotti (1978) (Corp.
contributions to political referenda)
contributions q Consolidated Edison v. Public Service Commissi
(1980). (bill inserts to express corp.
views) Political Speech Restrictions Are Subject
To Strict Scrutiny
q State must have compelling
legitimate q State must use means that are least
restrictive Unprotected Speech
q Certain types of speech are not
protected by the first amendment:
q Slander. q Pornography, Obscenity. q Fighting Words. Freedom of Religion
Second limit on governmental power
q First amendment prohibits the
“establishment” and guarantees the “free
exercise” of religion.
exercise” q The first amendment does not require
complete “separation of church and state.”
complete q First amendment mandates accommodation
of all religions and forbids hostility toward
any. Freedom of Religion
q First amendment guarantees the “free
exercise” of religion.
exercise” q Employers must reasonably
accommodate beliefs as long as
employee has sincerely held beliefs. Self-Incrimination
Third limit on governmental power
q Fifth amendment guarantees no person
can be compelled to testify against
himself in a criminal proceeding.
himself q Does not apply to corporations or
q Verniero v. Beverly Hills Ltd (1998). Searches and Seizures
Fourth limit on governmental power
q Fourth amendment requires warrant
with “probable cause.” q Warrantless exceptions exist for
“evanescent” q Searches of Business: generally
business inspectors must have a
warrant. Due Process
Fifth limit on governmental power
q 5th and 14th amendments provide “no
person shall be deprived of life, liberty
or property without due process of
law.” q Procedural and Substantive issues. Procedural Due Process
q Procedures depriving an individual of
her rights must be fair and equitable.
her q Constitution requires adequate notice
and a fair and impartial hearing before a
disinterested Procedural Due Process
COURT LOOKS AT:
1. Importance of individual interest involved
2. Adequacy of existing procedural protections
Probable value of additional safeguards
3. Governmental interest in fiscal &
administrative Substantive Due Process
q Focuses on the content or substance of
legislation. q Laws limiting fundamental rights
(speech, privacy, religion) must have a
“compelling state interest.”
“compelling q Laws limiting non-fundamental rights
require only a “rational basis.”
require Equal Protection
Rational Basis Test.
q Applied to matters of economic or
social q Laws will be constitutional if there is
a rational basis relating to legitimate
government interest. q WHS Realty v. Morristown (1999). Equal Protection
q Intermediate Scrutiny.
q Applied to laws involving gender or
legitimacy. q To be constitutional laws must be
substantially related to important
(EXAMPLE: Illegitimate teenage pregnancy). Equal Protection
Laws that affect the fundamental rights of
similarly situated individuals in a different manner
are subject to the “strict scrutiny” test.
q Any “suspect class” (race, national origin) must
serve a “compelling state interest” which includes
remedying past discrimination.
q Equal Protection
1. Economic Test
Gov. action must bear a rational
relationship to a legitimate state
interest 2. Arbitrary
Classification (Gender, Gov. action must bear substantial
relationship to important Gov.
Legitimacy) 3. Fundamental Rights
(Bill of Rights)
Travel, Access to Crim.
OR Suspect Classification
OR Gov. action must promote a
compelling / overriding Gov.
interest (very strict scrutiny)
q Fundamental right not expressly found
in the constitution, but derived from 1st,
5th and 14th amendments. q Laws and policies affecting privacy are
subject to the compelling interest test.
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This note was uploaded on 04/07/2008 for the course BUSINESS 3201 taught by Professor Danos during the Spring '08 term at LSU.
- Spring '08