Introduction to Business Law

Federal and State Constitutions

Constitutions and Businesses

Federal and state constitutions may limit the activities in which a business may participate or the manner in which it conducts that business.

The U.S. Constitution, or the federal constitution, is the primary governing document of the United States. The supremacy clause in Article 6, Clause 2, provides that the Constitution, federal laws made pursuant to it, and U.S. treaties are the supreme law of the land.

The Constitution contains articles that establish a republic form of government, a government run by representatives elected by the people. It also includes amendments, which have been added to the Constitution over time, many of which define substantive rights.

Checks and Balances

The legislative, executive, and judicial branches each have powers that enable them to check, or limit, the actions of the other branches.
The Constitution provides for checks and balances between the branches of government. Checks and balances means that each branch has certain powers over each of the other branches so that no branch has too much power.

For example, the legislative branch has a check over the executive branch because it can override a presidential veto or vote to impeach the president. It has a check over the judicial branch because it must confirm nominees for federal court judgeships.

The executive branch has a check over Congress in that the president can veto laws. The president also has a check over the judicial branch because he or she appoints nominees to fill federal judgeships.

Finally, the judicial branch has a check over the other two branches in that it can find (by way of judicial decision) that laws passed by Congress or executive actions taken by the president are unconstitutional.

The Bill of Rights is the first 10 amendments to the Constitution. It provides several individual rights, such as free speech, freedom of religion, the right to bear arms, freedom from illegal search and seizure, the right to due process, the right to a speedy trial, and the right to be free from cruel and unusual punishment.

Some of the powers that the Constitution gives the federal government are federal police powers, the power to raise an army, the power to declare war, the power to coin money, and the power to regulate interstate commerce.

The 10th Amendment reserves to the states any powers that are not specifically given to the federal government.

The privileges and immunities clause, Article 4, Section 2, Clause 1, prohibits a state from discriminating against a citizen because that person is from another state. The right of free travel comes from this clause, which both provides equal protection and has been interpreted to bestow a right to individuals.

Overview of State Constitutions

Each state has its own constitution, which differs from the federal constitution.

Each state has adopted its own constitution, which provides rights to its citizens. State constitutions were all adopted at different times depending on when the state joined the union. For example, Georgia adopted its first constitution in 1777, the first of ten constitutions adopted by the state. Montana, on the other hand, did not join the union until 1889, when its constitution was first drafted to prepare for statehood. State constitutions have similar provisions about how the document can be amended. Usually this happens when the state legislature passes an amendment or through a ballot initiative. In a ballot initiative, citizens vote on changes to their state constitution.

Both the federal constitution and state constitutions deal with organizing the state governance structure, bestowing individual rights, and setting up other rules and provisions. However, while the U.S. Constitution sets the law for the entire country, a state constitution's rules apply only to that particular state. State constitutions sometimes include provisions that duplicate provisions in the federal constitution. For example, some state constitutions restate a person's right to due process, even though that right already exists in the U.S. Constitution. Some state constitutions are extremely long. Alabama's constitution is over 300,000 words—about 600 pages long. State constitutions are amended more often than the federal constitution.

If a person's rights are violated, they may file a lawsuit. In some instances, the person may sue under statutes of the U.S. Constitution and similar provisions of their state constitution that may utilize aspects of the U.S. Constitution as well as outline the unique rights of the state.

How State and Federal Constitutions Differ

The federal constitution defines the structure of the national government. It also establishes and limits the scope of the national government's powers. State constitutions tend to be longer and more detailed. They outline the state's structure of government and contain a bill of rights.

While the U.S. Constitution outlines the structure of the national government, the state constitutions outline the structure of state governments. A state government's structure may differ from the federal government's. State constitutions sometimes cover far more areas than the federal constitution because the states have all reserved powers not given to the federal government. Also, state constitutions may have different manners to pass amendments. For example, a state may allow the passing of constitutional amendments either by the legislature or through ballot initiatives.

When it comes to substantive rights, it is important to discuss the concept of preemption. Preemption is the invalidation of a state or local law that conflicts with federal law. Usually, if there is a federal law on a certain topic, then any state or local laws that come into conflict with that law must be amended accordingly. Otherwise, a court would strike down the state law as being preempted by federal law. This ensures that when it comes to areas that fall under federal jurisdiction, federal law is the supreme law of the land. Cases of preemption are not always clearly defined. Determining whether a case is preemptive and, if so, what type of preemption exists can lead to long and expensive lawsuits.