Business Law Assign 1

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Business Law

Tenth Edition

Chapter 4

Constitutional Law for Business and E-Commerce

Learning Objectives (1 of 3)

4.1 Describe the U.S. Constitution and the concepts of federalism and separation of powers.

4.2 Define and apply the Supremacy Clause of the U.S. Constitution.

4.3 Explain the Commerce Clause and the federal government’s authority to regulate interstate and foreign commerce.

4.4 Describe how the Commerce Clause is applied to e-commerce.

Learning Objectives (2 of 3)

4.5 Describe the Bill of Rights and the process for amending the U.S. Constitution.

4.6 Explain how freedom of speech is protected by the First Amendment.

4.7 Explain how freedom of religion is protected and how the government may not promote religion.

4.8 Explain the equal protection doctrine and how it protects persons from unequal treatment by the government.

Learning Objectives (3 of 3)

4.9 Describe the Due Process Clause and substantive and procedural due process.

4.10 Explain how the government can take private property but must pay just compensation for the taking.

4.11 Explain how the privileges and immunities doctrine protects citizens from unfavorable treatment by the government.

Constitution of the United States of America (1 of 3)

Federalism and delegated powers

The U.S. form of government is federalism

Federal government and fifty state governments share powers

Enumerated powers: Certain powers delegated to the federal government by the states

Reserved powers: Powers not delegated to the federal government by the Constitution and reserved for the state governments

Constitution of the United States of America (2 of 3)

Doctrine of Separation of Powers

Article I – Legislative branch

Part of the government that makes federal laws

Congress – Senate and the House of Representatives

Article II – Executive branch

Part of the U.S. government that enforces the federal law

President and the vice president

Constitution of the United States of America (3 of 3)

Doctrine of Separation of Powers (cont.)

Article III – Judicial branch

Part of the U.S. government that interprets the law

Supreme court and other federal courts

Checks and balances

Built into the Constitution to ensure no one branch of the federal government becomes too powerful

Supremacy Clause

Establishes that the U.S. Constitution, federal treaties, laws, and regulations are the supreme law of the land

State and local laws that conflict with valid federal law are unconstitutional

Preemption doctrine: Doctrine that provides that federal law takes precedence over state or local law

Congress may expressly provide that a federal statute exclusively regulates an area or activity

Or local governments are given concurrent powers

Case 4.1: Supremacy Clause

Case

Mutual Pharmaceutical Company, Inc. v. Bartlett

133 S.Ct. 2466 (2013)

Supreme Court of the United States

Issue

Does the federal drug labeling law preempt a stricter state drug labeling law?

Commerce Clause

Grants Congress the power to regulate commerce with foreign nations, among the several states, and with Indian tribes

Federal government has the power to regulate three types of commerce

Commerce with Native American tribes

Foreign commerce

Interstate commerce

Commerce with Native American Tribes

During the formative years of the United States, federal government regulated commerce with Native American tribes

Federal government entered into treaties with many Native American nations

Native Americans are treated as domestic dependent nations with limited sovereignty

Foreign and Interstate Commerce

Foreign Commerce Clause: Commerce clause grants the federal government the authority to regulate foreign commerce

Direct and indirect regulation by state or local governments that burdens foreign commerce violates the clause and is therefore unconstitutional

Interstate commerce: Commerce that moves between states or that affects commerce between states

Dormant Commerce Clause (1 of 2)

Situation in which the federal government has the Commerce Clause power to regulate an area of commerce but has chosen not to regulate that area of commerce

State can enact laws to regulate that area of commerce with its police power

Police power: Power that permits states and local governments to enact laws to protect or promote the public health, safety, morals, and welfare

Dormant Commerce Clause (2 of 2)

Regulation by state should not unduly burden interstate commerce

Unduly burden interstate commerce: States may enact laws as long as the laws do not burden interstate commerce

E-Commerce and the Constitution

Electronic commerce (e-commerce)

Parties are permitted to obtain website domain names and conduct business electronically

E-commerce can be used for:

Sales of goods

Licensing of intellectual property

Sales of services

Bill of Rights and other Amendments to the U.S. Constitution

Bill of Rights

First ten amendments to the U.S. Constitution

Guarantees certain fundamental rights to natural persons

Protects from intrusive government action by:

Federal government

State governments (Incorporation doctrine)

Freedom of Speech (1 of 2)

The right to engage in oral, written, and symbolic speech protected by the First Amendment

Fully protected speech

Limited protected speech

Unprotected speech

Fully protected speech

Cannot be regulated or prohibited by government

Can be oral, written, or symbolic

Example – Criticizing the President, burning the U.S. flag as protest

Case 4.2: Free Speech Rights and the Internet

Case

Packingham v. North Carolina

2017 U.S. Lexis 3871 (2017)

Supreme Court of the United States

Issue

Does the North Carolina statute that prohibits registered sex offenders from using social media websites violate the First Amendment?

Freedom of Speech (2 of 2)

Limited protected speech: Speech that the government may not prohibit but that is subject to time, place, and manner restrictions

Offensive speech: Speech that is offensive to many members of society

Commercial speech: Speech used by businesses, such as advertising

Unprotected speech: Speech not protected by the First Amendment and may be forbidden totally

Ex. Dangerous speech, child pornography, etc.

Freedom of Religion

Establishment Clause: First Amendment clause prohibiting the government from either establishing a state religion or promoting one religion over another

Free Exercise Clause: First Amendment clause that prohibits the government from interfering with the free exercise of religion in the United States

Equal Protection

Equal protection clause: A clause that provides that a state cannot deny to any person within its jurisdiction the equal protection of the laws

Laws cannot classify and treat similarly situated persons differently

Artificial persons, such as corporations, are also protected

Does not make the classification of individuals unlawful

Standards of Review (1 of 2)

Strict scrutiny test: Test that is applied to determine constitutionality of classifications by the government based on:

Suspect class (e.g., race)

Fundamental rights (e.g., voting)

Intermediate scrutiny test: Applied to classifications based on protected classes (e.g., gender)

Standards of Review (2 of 2)

Rational basis test: Applied to classifications not involving a suspect or protected class (e.g., age)

Court will uphold government regulation so long as there is a justifiable reason for it

Permits much of the government regulation of business

Case 4.3: Due Process and Equal Protection Clauses

Case

Obergefell v. Hodges

135 S.Ct. 2584 (2015)

Supreme Court of the United States

Issue

Do the challenged state laws that do not permit or recognize same-sex marriage violate the Due Process Clause and Equal Protection Clause of the Fourteenth Amendment to the U.S. Constitution?

Due Process (1 of 2)

Due process clause: No person shall be deprived of life, liberty, or property without due process of the law

Fifth Amendment – Federal government action

Fourteenth Amendment: State and local government action

The government is not prohibited from taking a person’s life, liberty, or property

Must follow due process in order to do so

Due Process (2 of 2)

Substantive due process

Requires government statutes, ordinances, regulations, or other laws to be clear on their face and not overly broad in scope

Tested using a reasonable person’s understanding of the law

Laws failing the test are declared void for vagueness

Procedural due process

Requires the government to give a person proper notice and hearing of legal action before depriving that person of life, liberty, or property

Government Taking of Property

Takings clause

A clause that allows the government to take property for public use.

Requires:

Public use

Just compensation

Case 4.4: Takings Clause and Just Compensation

Horne v. Department of Agriculture

135 S.Ct. 2419

Supreme Court of the United States

Issue:

Does the government’s action constitute a taking of personal property under the Takings Clause of the Fifth Amendment that requires the payment of just compensation?

Privileges and Immunities

Privileges and Immunities Clause

“The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several states”

No state shall make or enforce any law that shall abridge the privileges or immunities of the citizens of the United States

The clauses prohibit states from enacting laws that unduly discriminate in favor of their residents

The clauses apply only to citizens and do not protect corporations or aliens