Bài giảng Business Law - Chapter 3: Business and the Constitution

Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin1The Nature of LawThe Resolution of Private DisputesBusiness and The ConstitutionBusiness Ethics, Corporate Social Responsibility, Corporate Governance, and Critical ThinkingFoundations of American LawPARTBusiness and the ConstitutionPAETRHC3“The very idea of the power and the right of the People to establish government presupposes the duty of every Individual to obey the established Government. George Washington Farewell AddressSeptember 19, 1796Understand basics of the Constitution and principles of federalismExplain importance of certain clauses: Supremacy Clause, Commerce Clause, First Amendment, due process clausesDiscuss important constitutional issues: determining constitutionality, federal preemption, guarantees and limitations Learning ObjectivesOverview of the ConstitutionEstablishes a tripartite government to ensure a separation of powers:Article I sets forth the legislative powers of Senate and Congress Article II gives executive power to execute legislation, command armed forces, make treatiesArticle III provides judicial power to the Supreme Court and subsidiary courtsJudicial ReviewIn Marbury v. Madison (1803), the Supreme Court interpreted the Constitution to grant federal courts the power of judicial review – power to declare statute or governmental action unconstitutional and voidIrony: statute in question gave the Supreme Court special powersA System of Checks & BalancesNo single branch may control governmentSupreme Court has power of judicial reviewStates reserve certain powersFederal powers are limitedThe Power to RegulateFederal government has exclusive power to administer certain national concerns, such as war and currencySome powers are shared with the statesExample: power to tax, power to spendStates possess exclusive power to enact laws to protect general welfare, health, and safetyFederal SupremacyThe Constitution and statutes enacted by Congress, including treaties, are supreme law of the land Article VI, Clause 2Federal PreemptionArticle I, Section 8 lists issues on which Congress may pass statutes Thus, if Congress enacts a law on a certain issue, then Congress preempts state regulation of that issueExample: Congress enacted the Civil Rights Act of 1964, thus a state cannot enact a law allowing discrimination based on race, religion, or genderTesting ConstitutionalityCourts apply a means-ends test to review allegedly unconstitutional statuteRational basis test (minimal scrutiny)If law has rational basis, it will standIntermediate scrutinyLaw must substantially relate to important governmental objectives to standStrict scrutinyLaw presumed invalid if, on its face, it is based on race, ethnicity, and religionThe Commerce PowerCommerce clause literally applies to interstate commerceArticle I, Section 8, Clause 3Supreme Court has applied the power to intrastate commerce when the activity affects interstate commerceGonzales v. Raich emphasizes the far reach of the commerce powerThe First AmendmentFirst Amendment guarantees freedoms of religion, speech, press, assembly, and petition to individualsAnd to corporationsProtection has never been afforded to certain classes of speechFalse, lewd, obscene, profane, libelous, and insulting speech is not protectedCommercial SpeechSpeech proposing a commercial transactionNeither noncommercial expression nor political, thus commercial speech not fully protectedA restriction on commercial speech is valid if it:(1) seeks to implement a substantial gov’t interest, (2) directly advances the interest, and (3) is the least restrictive method of achieving the interestIssue: Compelled AdvertisingWhen government requires producers to pay for generic industry advertisementsU.S. Supreme Court concluded in Johanns v. Livestock Marketing Association that the beef assessment funding was for government speech, thus the promotional program is not subject to a First Amendment compelled-subsidy challenge Constitutional LimitationsFifth Amendment prohibits federal government from depriving “any person of life, liberty, or property without due process of law”Known as the due process clauseApplied to states through Fourteenth Amendment by process of incorporationDue process clause interpreted liberally to be guarantee of protection fromUnreasonable procedures Procedural due processUnreasonable laws Substantive due processProtection from government actionFederal funding may create “government” nexusConstitutional LimitationsEqual protection clause of Fourteenth Amendment applies to states and federal government when classifying peopleBasic test: rational basis (minimal)Compare tests applied in:Fitzgerald v. Racing Association of Central IowaBush v. GoreConstitutional LimitationsEqual protection clause prohibits government from treating one person differently than another without reasonable grounds for classifying differently“Suspect” classifications (race, gender, ethnicity) require higher level of scrutinyExamples: Gratz v. Bollinger, Grutter v. BollingerConstitutional LimitationsFederal PreemptionSupremacy Clause: principle of federal supremacy establishes that when state law conflicts with federal law, federal law is supreme and preempts state lawIn Chamber of Commerce v. Whiting, Supreme Court declared that federal immigration law preempted an Arizona state law attempting to impose sanctions on employers for employing unauthorized aliensThe Takings ClausePhrase “depriving a person of property” known as the takings clauseInterpreted to require government to pay property owner just compensation in exchange for taking property by eminent domain; public use purpose required“Takings” for economic development purpose satisfies public use requirementKelo v. City of New LondonThought QuestionWhat constitutional issues are important to you?