Chapter 5 Constitutional Law

1. EIGHTH EDITION Chapter 5Constitutional Law Text and Cases The Legal Environment of Business Cross Miller Ethical, Regulatory, Global, and Corporate Issues

2. §1: The Constitutional Powers of Government • Before the Revolutionary War, States wanted a confederation with weak national government and very limited powers. After the war ended, the States voted to create a new, federal government that shared power with States. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

3. The Constitutional Powers of Government • Federal Form of Government: • Shares power between national and state governments. • National government has limited, enumerated powers delegated from States. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

4. The Constitutional Powers of Government • Federal Form of Government (cont’d). • 10th Amendment. • Police Powers: order, safety, morals. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

5. Relations Among States • Privileges and Immunities Clause. (Art. IV §2). • Prevents state from imposing unreasonable burdens on citizens – particularly with regard to basic and essential activities. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

6. Relations Among States • Full Faith and Credit Clause (Art. IV §1). • Applies only to civil matters. • Ensures that any judicial decision with respect to such property rights will be honored and enforced in all states. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

7. Separation of the National Government’s Powers • Three branches that provide checks and balances: • Legislative (Congress): Creates laws. • Executive (President/Agencies): Enforce laws. • Judicial (Federal Courts): Interprets laws. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

8. The Commerce Clause • Power to regulate interstate commerce defined in Gibbons v. Ogden (1824): activities that “substantially affect interstate commerce.” © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

9. The Commerce Clause • Expansion of National Powers. • In 1942, Supreme Court expanded commerce clause to purely interstate businesses (Wickardv. Fillburn). • In 1964, Supreme Court prohibited racial discrimination in interstate commerce (Heart of Atlanta Motel v. U.S.). © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

10. The Commerce Clause • Commerce Clause Today. • National government can regulate virtually any business enterprise, including those that are internet-based. Limits: U.S. v. Lopez (1995). • What about medical marijuana and the commerce clause? © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

11. The “Dormant” Commerce Clause • Generally, federal government has exclusive authority to regulate commerce that substantially affects trade among the states. • States possess inherent police powers to regulate health, safety, public order, morals and general welfare.  © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

12. The “Dormant” Commerce Clause • State police powers or regulations that substantially interfere with interstate commerce will be struck down. • CASE 4.1 Family Winemakers of California v. Jenkins (2010). Did the State of Massachusetts discriminate against out-of-state wineries? © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

13. The Supremacy Clause and Federal Preemption • In case of direct conflict between state and federal law, state law is invalid. • A valid federal statute or regulation will take precedence over a conflicting state or local statute.  © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

14. The Supremacy Clause and Federal Preemption • Preemption occurs when Congress chooses to act exclusively when national and state governments have concurrent powers. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

15. Taxing and Spending Powers • Article I, § 8: Congress has the “Power to lay and collect Taxes, Duties, Imposts, and Excises” which shall be “uniform” among the states. • Expansion of commerce clause gives taxing power as well. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

16. §2: Business and the Bill of Rights • First Ten Amendments to the United States Constitution are called the Bill of Rights. • All apply to natural persons and most apply to business entities as well. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

17. The Bill of Rights © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

18. Business and the Bill of Rights • Limits on Federal and State Government Actions. • Bill of Rights was originally intended as a limit on national government powers. • Today, Bill of Rights is applied to States via the “due process” clause of the 14th Amendment. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

19. Freedom of Speech • Afforded highest protection by courts. • Symbolic Speech. • Texas v. Johnson (1989), the “flag burning” case. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

20. Freedom of Speech • Reasonable Restrictions. • Balance must be struck between a government’s obligation to protect its citizens versus a citizen’s right to speech. • If restriction is content neutral, restrictions must target some societal problem – not to primarily suppress the message. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

21. Freedom of Speech • Corporate Political Speech. • Political speech by corporations is protected by the First Amendment. • In Citizens United v. Federal Election Commission (2010) the Supreme Court ruled that corporations can spend freely to support or oppose candidates for President and Congress. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

22. Freedom of Speech • Commercial Speech. • Courts give substantial protection to commercial speech (advertising). • Restrictions must: Implement substantial government interest; directly advance that interest; and go no further than necessary.  © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

23. Freedom of Speech • Commercial Speech (cont’d). • CASE 5.2: Bad Frog Brewery, Inc. v. New York State Liquor Authority(2003). Did the State unconstitutionally restrict commercial speech when it prohibited a certain gesture (illustration) on beer labels? © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

24. Freedom of Speech • Unprotected Speech. Certain types of speech are not protected by the First Amendment: slander, fighting words, pornography. • Obscenity (see Miller v. California). • Online Obscenity: CDA, COPA, Children’s Internet Protection Act, Children’s Internet Protection Act (2000). © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

25. Freedom of Religion • First Amendment may not “establish” a religion or prohibit the “free exercise” of religion. • The Establishment Clause: • Prohibits government from establishing a state-sponsored religion, or passing laws that favor one over the other.  © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

26. Freedom of Religion • Establishment Clause (cont’d). • CASE 4.3 In Re Episcopal Church Cases (2009). Can a secular court resolve an internal dispute about church property without becoming impermissibly entangled with religion? © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

27. Freedom of Religion • Free Exercise Clause: First Amendment guarantees the “free exercise” of religion. • Employers must reasonably accommodate beliefs as long as employee has sincerely held beliefs. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

28. Searches and Seizures • The Fourth Amendment requires search warrants to have “probable cause.” • General searches through personal belongings are illegal. • Search warrants must be specific. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

29. Searches and Seizures • Searches and Seizures in Business Context: generally business inspectors must have a warrant. • However, a warrantless search is permissible for seizure of spoiled or contaminated food. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

30. Self-Incrimination • Fifth Amendment guarantees no person can be compelled to testify against himself in a criminal proceeding. • Does not apply to corporations or partnerships. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

31. §3: Due Process and Equal Protection • Fifth and Fourteenth Amendments provide “no person shall be deprived of life, liberty or property without due process of law.” • Due Process: Procedural and Substantive issues.  © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

32. Due Process • Procedural Due Process. • Procedures depriving an individual of her rights must be fair and equitable. • Constitution requires adequate notice and a fair and impartial hearing before a disinterested magistrate. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

33. Due Process • Substantive Due Process. • Focuses on content or substance of legislation. • Laws limiting fundamental rights (speech, privacy, religion) must have a “compelling state interest.” • Laws limiting non-fundamental rights require a “rational basis.” © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

34. Equal Protection • Strict Scrutiny Test. • Laws that affect fundamental rights of similarly situated individuals differently are subject to the “strict scrutiny” test. • Any “suspect class” (race, national origin) must serve a “compelling state interest” which includes remedying past discrimination. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

35. Equal Protection • Intermediate Scrutiny. • Applied to laws involving gender or legitimacy. • To be constitutional laws must be substantially related to important government objectives. • (EXAMPLE: Illegitimate teenage pregnancy). © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

36. Equal Protection • “Rational Basis” Test. • Applied to matters of economic or social welfare. • Laws will be constitutional if there is a rational basis relating to legitimate government interest. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

37. §4: Privacy Rights • Fundamental right not expressly found in the constitution, but derived from First, Fifth and Fourteenth Amendments. • Laws and policies affecting privacy are subject to the compelling interest test. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

38. Privacy Rights • Federal Statutes Affecting Privacy Rights. • “Pretexting” for financial information is illegal under Gramm-Leach-Bliley. • Privacy Act of 1974. • HIPAA of 1996. • USA PATRIOT Act of 2001. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.