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CHAPTER 4. CONSTITUTIAL LAW FOR BUSINESS AND E-COMMERCE. © 2010 Pearson Education, Inc., publishing as Prentice-Hall. Functions of U.S. Constitution. Creates three branches of government ( executive , legislative , and judicial ) and allocates powers to these branches.

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chapter 4




© 2010 Pearson Education, Inc., publishing as Prentice-Hall

functions of u s constitution
Functions of U.S. Constitution

Creates three branches of government (executive, legislative, and judicial) and allocates powers to these branches.

Protects individual rights by limiting government’s ability to restrict those rights.

basic constitutional concepts
Basic Constitutional Concepts

Federalism and Delegated Powers

Separation of Powers

Checks and Balances

federalism and delegated powers
Federalism and Delegated Powers

U.S. form of government is federalism.

Federal government and state governments share powers.

Certain powers—the “enumerated powers”—delegated to the federal government by the states.

E.g., federal government deals with international affairs.

federalism and delegated powers continued
Federalism and Delegated Powers(continued)

Any powers not specifically delegated to the federal government by the Constitution are reserved to the states.

State governments are empowered to deal with local affairs.

E.g., states handle education, local public safety issues.


Separation of Powers

The federal government is separated into three branches.

separation of powers continued
Separation of Powers(continued)

Article I of the Constitution establishes the legislative branch of government.

Bicameral legislature


House of Representatives

Role to make federal law.

separation of powers continued8
Separation of Powers(continued)

Article II of the Constitution establishes the executive branch of government.

Provides for the election of President and Vice President

Establishes Electoral College

Role to interpret federal law.

separation of powers continued9
Separation of Powers(continued)

Article III of the Constitution establishes the judicial branch of the government.

Supreme Court

Other federal courts that may be created by the Congress

Role to interpret federal law.


Checks and Balances

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

checks and balances continued
Checks and Balances(continued)

Judicial branch has authority to examine the acts of the other two branches of government and determine whether these acts are constitutional.

checks and balances continued12
Checks and Balances(continued)

Executive branch can enter into treaties with foreign governments only with the advice and consent of the Senate.

checks and balances continued13
Checks and Balances(continued)

Legislative branch is authorized to create federal courts and determine their jurisdiction and to enact statutes that change judicially made law.

supremacy clause
Supremacy Clause

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

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


Preemption Doctrine

The concept that federal law takes precedence over state or local law.

preemption doctrine continued
Preemption Doctrine(continued)

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

More frequently, federal, state, and local governments have concurrent power.


Commerce Clause

Congress has power:

“to regulate commerce with foreign nations, and among the several states, and with Indian tribes.”

commerce clause continued
Commerce Clause(continued)

Federal government has exclusive power to regulate commerce with foreign nations.

Direct or indirect regulation by states that unduly burdens foreign commerce is unconstitutional.

E.g., Massachusetts’ anti-Myanmar statute.

commerce clause continued19
Commerce Clause (continued)

The federal government may regulate:

Interstate commerce that crosses state borders.

Intrastate commerce that affects interstate commerce.

commerce clause continued20
Commerce Clause(continued)

Interstate commerce very broadly defined.

E.g., wheat grown for home consumption or refusing to rent motel rooms based on race both tied to interstate commerce so that federal regulation proper.

Broad interpretation gives federal government great power to regulate, so that this clause has greater impact on business than any other constitutional clause.

commerce clause continued21
Commerce Clause(continued)

States have power to regulate private and business activity within their borders (“police powers”).

States may enact laws that protect or promote the public health, safety, morals, and general welfare as long as the laws do not unduly burden interstate commerce.

dormant commerce clause
Dormant Commerce Clause

State and local governments may regulate:

Intrastate commerce

Interstate commerce not exclusively regulated by the federal government

dormant commerce clause continued
Dormant Commerce Clause(continued)

Examples of state laws regulating business include zoning ordinances, state environmental laws, corporation and partnership laws, property laws.

Area of considerable current litigation.

E.g., Granholm v. Heald (Michigan’s interstate wine ban found to be unconstitutional)

bill of rights
Bill of Rights

Ten amendments added in 1791.

Guarantees certain fundamental rights to natural persons.

Protects persons from intrusive government action.

By federal government

By state governments (“Incorporation doctrine”)

freedom of speech
Freedom of Speech

Freedom of Speech– the right to engage in oral, written, and symbolic speech.

Fully Protected Speech

Limited Protected Speech

Unprotected Speech

freedom of speech continued
Freedom of Speech(continued)

Political speech is fully protected.

Cannot be regulated or prohibited by government.

Can be oral, written, or symbolic.

E.g., writing editorial criticizing President, or flag burning as protest.

freedom of speech continued28
Freedom of Speech(continued)

Speech with limited protection – can enact time, place, and manner restrictions.

Offensive speech

E.g., offensive language on television may be restricted to late-night hours.

Commercial speech

E.g., billboards may be limited to certain locations, telemarketing calls may be restricted by Do-Not-Call registry.

freedom of speech continued29
Freedom of Speech(continued)

Unprotected speech

May be forbidden

Dangerous speech (“Fire” in crowded theater)

Fighting words intended to provoke violent reactions

Speech that incites the violent overthrow of the government

Defamatory speech

Child pornography

Obscene speech (limited exception)


Freedom of Religion – the U.S. Constitution requires federal, state, and local governments to be neutral toward religion.

freedom of religion
Freedom of Religion

The Establishment Clause

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

The Free Exercise Clause

First Amendment clause that prohibits the government from interfering with the free exercise of religion.

equal protection clause
Equal Protection Clause

Fourteenth Amendment

Added to Constitution in 1868.

To guarantee equal rights to all persons after Civil War.

Prohibits discriminatory and unfair action by the government.

equal protection clause continued
Equal Protection Clause(continued)

Provides that state cannot “deny to any person within its jurisdiction the equal protection of the laws.”

equal protection clause continued34
Equal Protection Clause(continued)

State, local, and federal governments are prohibited from enacting laws that classify and treat “similarly situated” persons differently.

Artificial persons, such as corporations, are also protected.

equal protection clause continued35
Equal Protection Clause(continued)

Three standards for reviewing equal protection cases.

Strict Scrutiny Test – applied to classifications based on race.

E.g., affirmative action law

Intermediate Scrutiny Test – applied to classifications based on protected classes other than race (e.g., sex or age).

equal protection clause continued36
Equal Protection Clause(continued)

Rational Basis Test – Classifications not involving a suspect or protected class.

Applies to most laws.

Court will uphold law so long as there is a justifiable reason for it.

E.g., providing government subsidies to farmers but not those in other occupations is constitutional.

due process clause
Due Process Clause

Under Fifth and Fourteenth Amendments, no person shall be deprived of “life, liberty, or property” without due process of the law.

substantive due process
Substantive Due Process

Requires laws to be clear and not overly broad.

Test is whether a reasonable person could understand the law.

Laws failing test are declared void for vagueness.

procedural due process
Procedural Due Process

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

E.g., criminal defendant must receive fair trial.

privileges and immunities clause
Privileges and Immunities Clause

In Article IV and Fourteenth Amendment

To promote nationalism

States prohibited from enacting laws that unduly discriminate in favor of their residents.

E.g., cannot enact a law prohibiting nonresidents from owning property or businesses.

States have sufficient reason in certain cases to treat nonresidents differently—e.g., out-of-state college tuition.

Applies only to citizens, not corporations.