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Chapter4PP.2019.ppt

ACC 150
THE LEGAL ENVIRONMENT OF BUSINESS

With Doreen Smith, Esquire

Chapter 4

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US CONSTITUTION
AND FEDERAL SYSTEM

  • Constitution
  • Written document that establishes the structure of government, and its relationship to the people.
  • The U.S. Constitution sets forth specific powers for each branch of government (legislative, executive and judicial).
  • The Constitution places limitations on the powers of each branch of the federal government.
  • Constitution creates a federal system with a tripartite (3-part) division of government and a bicameral (2-house) national legislature.

BRANCHES OF FEDERAL GOVERNMENT

JUDICIAL BRANCH

Courts

EXECUTIVE BRANCH

President

ADMINISTRATIVE

AGENCIES

(Created by the executive or legislative branches to carry out a specific function.)

LEGISLATIVE BRANCH

Bicameral Congress

Senate House of

Representatives

CONSTITUTION AND THE STATES

Delegated Powers:

  • powers given to the national government by the states (example: to declare war).

Shared Powers

  • delegated powers that may be shared by states (example: the power to tax).

U.S. Constitution, which reserves some powers for the States, delegates some powers to the Federal government, and allows some powers to be shared, or exercised by both.

Delegation of Powers

Federal Government

State Government

The states, who ratified the…

We, the People give power to…

CONSTITUTION AND THE STATES

  • State--- Police Powers
  • States possess power to adopt laws to protect the general health, safety and welfare of the people.
  • Example: Licensing of businesses.
  • Prohibited Powers
  • The Constitution prohibits both state and federal government from taking certain actions.
  • Example: no ex post facto laws (make an act criminal after the act was committed).

U.S. CONSTITUTION AND THE STATES

Federal Supremacy.

  • Express Federal Regulation
  • Federal law preempts state law which directly conflicts with federal law.
  • Silence of Congress.
  • Sometimes Congress has not addressed an issue. This still may create preemption because Congress wants no state law on the subject
  • Effect of Federal Deregulation
  • Congress sometimes deregulates an industry which would preempt any state law on that industry.

INTERPRETING AND AMENDING
THE CONSTITUTION

  • Conflicting Theories:
  • In the bedrock (also called the strict constructionist) view, the purpose of a constitution is to state certain set principles.
  • In the living-document view, a constitution states goals and is intended to change with time.
  • In recent years the use of the living-document interpretation has expanded the powers of the federal government.

INTERPRETING AND AMENDING
THE CONSTITUTION

The Constitution has been amended, or changed, in three ways:

(c) By Practice –

In a few cases, the actions of government have established accepted practices which depart from the requirements of the Constitution.

(b) Judicial

Interpretation –
The U.S. Supreme Court has been called upon to apply the Constitution to many new situations, unforeseen to the document’s original writers.

(a) Formal

Amendment - Only 27 formal amendments to the Constitution have been completed, though thousands have been proposed.

FEDERAL POWERS

  • The Commerce Clause is Article I, Section 8, Clause 3 of the US Constitution.
  • Commerce clause provides that Congress has the power “to regulate commerce with foreign nations, and among several states, and with the Indian tribes.”
  • The importance is that without this provision Congress would be limited in its ability to impact a business.
  • Initial court cases limited this power to commerce that crossed state lines such as trains. However, the power of Congress to enact legislation has become broader in recent court decisions.

IMPACT ON STATE POWERS

  • Since the Commerce Power has been broadened allowing Congress to enact more laws, this has limited state’s power to regulate the same issues.
  • States cannot pass legislation that interferes with federal regulations or burdens interstate commerce.
  • States cannot discriminate against out of state businesses.
  • Example: State cannot tax at a higher rate goods from another state (from the tax on local businesses).

TAXING POWER

  • Under Article 1, Section 8, Clause 1 of the US Constitution:
  • Congress shall have the power to lay and collect taxes, duties,…”
  • States and local governments may also impose taxes.
  • Taxes must be apportioned so that a business is not taxed for the same revenue in all 50 states.

CONSTITUTIONAL LIMITATIONS
ON GOVERNMENT

Privileges and Immunities.

  • Means that a person going into another state is entitled to make contracts, own property, and engage in business to the same extent as a citizen of that state.

Protection of the Person.

  • Bill of Rights now includes rights not expressly mentioned in U.S. Constitution. That is, judicial interpretation have added rights to the Constitution.

CONSTITUTIONAL LIMITATIONS
ON GOVERNMENT

The Bill of Rights and Businesses as Persons.

  • First Ten Amendments provide protection for individuals and businesses.
  • All rights under the Bill of Rights apply to government action (not action by a business or an individual).
  • Example, a private employer can limit privacy right of employees (if it does not violate state law), but a public employer (government) would not be able to violate privacy rights of employees because of the U.S. Constitution.

CONSTITUTIONAL LIMITATIONS ON GOVERNMENT

  • Due Process
  • This provides for a hearing when there will be a loss of property or rights.
  • First Amendment
  • Businesses enjoy free speech protections under the First Amendment (ex. advertising).
  • Fourth Amendment
  • Businesses cannot be searched without a search warrant.