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Chapter 4 Constitutional Authority to Regulate Business . History. Before the Revolutionary War, States wanted a confederation with weak national government and very limited powers.

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Chapter 4 constitutional authority to regulate business l.jpg

Chapter 4

Constitutional Authority to Regulate Business


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History

Before the Revolutionary War, States wanted a confederation with weak national government and very limited powers.

After the war, in 1787, the States voted to amend Articles of Confederation and create a new, federal government that shared power with States.


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§1: Constitutional Powers of Government

  • Constitution established a federal form of government with checks and balances among three branches: executive, legislative and judicial.

  • National government has limited, enumerated powers delegated from States.

  • Privileges and Immunities Clause (Art. IV §2)

  • Full Faith and Credit Clause (Art. IV §1)


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U.S. Commerce Clause

  • Power to regulate interstate commerce defined in Gibbons v. Ogden (1824).

  • Expansion to private businesses began with Wickard v. Fillburn (1942). Today, the Commerce Clause authorizes the national government to regulate virtually any business enterprise, including the internet-based. Limits: U.S. v. Lopez (1995)

  • Case 4.1:Reno v. Condon (2000)


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State Commerce

  • States possess inherent police powers to regulate health, safety, public order, morals and general welfare.

  • “Dormant” Commerce Clause.

  • Case 4.2:Ferguson v. Friendfinders. Inc. (2002)

  • State laws that substantially interfere with interstate commerce will be struck down.


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U.S. Supremacy Clause

  • Article VI of the Constitution “Supreme Law of the Land.”

  • In case of direct conflict between state and federal law, state law is invalid.

  • Congress can preempt states.

  • Federal Taxing and Spending Powers.


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§2: Business and the Bill of Rights

  • Bill of Rights are not absolute.

  • Originally the Bill of Rights was a limit on the national government’s powers.

  • During the early 1900’s, the Supreme Court applied the Bill of Rights to the States via the “due process” clause of the 14th Amendment.


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Free Speech

  • Afforded highest protection by courts.

  • Symbolic Speech.

    • Texas v. Johnson (1989).

    • R.A.V. vs. City of St.Paul (1992).


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Commercial Speech

  • Advertising is protected speech. Restrictions must:

    • Implement substantial government interest;

    • Directly advance that interest; and

    • Go no further than necessary.

  • Case 4.3: Bad Frog Brewery (1998).


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Corporate Political Speech

Afforded significant protection by the First Amendment but not to the degree of speech of natural persons.

  • First National v. Bellotti (1978).

  • Consolidated Edison v. Public Service Commission (1980).


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Unprotected Speech

  • Certain types of speech are not protected by the First Amendment:

    • Slander.

    • Obscenity (Miller v. California).

    • Fighting Words.

  • Online Obscenity

    • CDA, COPA, Children’s Internet Protection Act.


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Freedom of Religion

  • First Amendment many neither prohibit the “establishment” nor prohibit the “free exercise” of religion.

  • The First Amendment does not require complete “separation of church and state.”

  • First Amendment mandates accommodation of all religions and forbids hostility toward any.

  • Zorach v. Clauson (1952) and Lynch v. Donnelly (1984).


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Freedom of Religion

  • First Amendment guarantees the “free exercise” of religion.

  • Employers must reasonably accommodate beliefs as long as employee has sincerely held beliefs.

    • Frazee v. Illinois(1989).


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Searches and Seizures

  • Fourth Amendment requires warrant with “probable cause.”

  • Warrantless exceptions exist for “evanescent” evidence.

  • Searches of Business: generally business inspectors must have a warrant. Marshall v. Barlow’s(1978).


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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.


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§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.”

  • Procedural and Substantive issues.


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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.


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Substantive Due Process

  • Focuses on the content or substance of legislation.

  • Laws limiting fundamental rights (speech, privacy, religion) must have a “compelling state interest.”

  • Laws limiting non-fundamental rights require only a “rational basis.”


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Equal Protection

  • Strict Scrutiny.

    • Laws that affect the fundamental rights of similarly situated individuals in a different manner are subject to the “strict scrutiny” test.

    • Any “suspect class” (race, national origin) must serve a “compelling state interest” which includes remedying past discrimination.


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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).


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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.


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§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.


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Law on the Web

  • Online Constitution Center

  • See the “Vote-Smart” site on federalism.

  • Federalist Society.com.

  • ACLU.org.

  • Legal Research Exercises on the Web.


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