Roger LeRoy Miller

BUSINESS LAW TODAY

STANDARD EDITION
TEXT & SUMMARIZED CASES, 11E

Copyright
Copyright 2017 Cengage 2017
Learning. All Cengage Learning. All Rights Reserved.
Rights Reserved.
 Constitutional Law
Chapter 2

Chapter Outline
2-1 The Constitutional Powers of Government
2-2 Business and the Bill of Rights
2-3 Due Process and Equal Protection
2-4 Privacy Rights

Copyright 2017 Cengage Learning. All Rights Reserved.

 Learning Objectives (slide 1 of 2)

1. What is the basic structure of the U.S.

government?
2. What constitutional clause gives the
federal government the power to
regulate commercial activities among the
various states?
3. What constitutional clause allows laws
enacted by the federal government to
take priority over conflicting state laws?
Copyright 2017 Cengage Learning. All Rights Reserved.
 Learning Objectives (slide 2 of 2)

4. What is the Bill of Rights? What

freedoms does the First Amendment
guarantee?
5. Where in the Constitution can the due
process clause be found?

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-1 The Constitutional Powers of
Government
2-1a A Federal Form of Government
The federal constitution was a political
compromise between advocates of state
sovereignty and central government.

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-1b The Separation of Powers

1. Legislative branch can enact a law but executive

branch can veto
2. Executive branch is responsible for foreign affairs
but treaties require consent from Senate
3. Congress determines jurisdiction of federal courts;
president appoints federal judges (with
advice/consent of Senate) but judicial branch has
power to hold actions of other two branches
unconstitutional

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-1c The Commerce Clause

U.S. Constitution gives Congress the power

to: regulate Commerce with foreign
Nations, and among the several States, and
with the Indian tribes. (Art. 1 8)
Greatest impact on business than any other
Constitutional provision

Copyright 2017 Cengage Learning. All Rights Reserved.

 Landmark in the Law

Gibbons v. Ogden (1824)

To Chief Justice Marshall, commerce
meant all business dealings that
substantially affected more than one state.
The national government had the
exclusive power to regulate interstate
commerce.

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-1c The Commerce Clause

The Commerce Clause and the Expansion of

National Powers
Case Example 2.1 Wickard v. Filburn (1942)
Purely local production, sale and consumption of
wheat was subject to federal regulation.

Copyright 2017 Cengage Learning. All Rights Reserved.

 Classic Case 2.1

Heart of Atlanta Motel v. United States

(1964)
Owner of the HoA motel
unconstitutionally refused to rent to
blacks. The Civil Rights Act of 1964 did
not violate the interstate commerce
clause.

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-1c The Commerce Clause (slide 1 of 3)

The Commerce Clause Today

Theoretically, the commerce clause applies to
virtually all commercial transactions.
Case Example 2.2 Gonzales v. Raich (2005)

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-1c The Commerce Clause (slide 2 of 3)

The Regulatory Powers of the States

Tenth Amendment reserves all powers to the
states that have not been expressly delegated to
the national government.
States have inherent police powers including right
to regulate health, safety, morals and general
welfare, licensing, building codes, parking
regulations, and zoning restrictions.
Police powers: powers possessed by the states as part
of their inherent sovereignty. These powers may be
exercised to protect or promote the public order,
health, safety, morals, and general welfare.

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-1c The Commerce Clause (slide 3 of 3)

The Dormant Commerce Clause

National government has exclusive power to
regulate interstate commerce.
States only have a dormant (negative) power to
regulate interstate commerce.
Courts balance states interest vs. national
interest.
Case Example 2.3 Tri-M Group, LLC v. Sharp
(2011)

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-1d The Supremacy Clause

Article VI of the Constitution provides that

Constitution, laws and treaties of the United
States are the supreme law of the land.
Preemption: A doctrine under which certain
federal laws preempt, or take precedence
over, conflicting state or local laws.
Congressional Intent
Case Example 2.4 Riegel v. Medtronic, Inc. (2008)

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-2 Business and the Bill of Rights

Bill of Rights: The first ten amendments to the U.S.

Constitution
1. First Amendment freedom of religion
2. Second Amendment right to keep and bear arms
3. Third Amendment prohibits lodging of soldiers in any house
without owners consent during peactime
4. Fourth Amendment unreasonable search and seizure
5. Fifth Amendment rights to indictment by grand jury
6. Sixth Amendment right to speedy and public trial
7. Seventh Amendment right to trial by jury in civil cases
8. Eighth Amendment prohibits excessive bail/fines and cruel/unusual
punishment
9. Ninth Amendment establishes people have rights in addition to
those specified in Constitution
10. Tenth Amendment establishes powers reserved for states
Copyright 2017 Cengage Learning. All Rights Reserved.
 2-2a Limits on Federal and State
Governmental Actions
Originally, Bill of Rights only applied to the
federal government.
Later, the Bill of Rights was incorporated
and applied to the States as well.
Some protections also apply to businesses.

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-2b The First Amendment
Freedom of Speech (slide 1 of 3)

Right to Free Speech is the basis for our

democratic government.
Free speech also includes symbolic speech,
including gestures, movements, articles of
clothing.
Reasonable Restrictions
Content-Neutral Laws
Case Example 2.6 Commonwealth v. Ora (2008)
Laws That Restrict the Content of Speech
Case Example 2.7 Morse v. Frederick (2007)

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-2b The First Amendment
Freedom of Speech (slide 2 of 3)

Corporate Political Speech

Political speech by corporations is protected by
the First Amendment.
Case Example 2.8 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.

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-2b The First Amendment
Freedom of Speech (slide 3 of 3)

Commercial Speech
Case Example 2.9 Caf Erotica v. Florida
Department of Transportation (2002)
Courts give substantial protection to commercial
speech (advertising).
Restrictions must: Implement substantial government
interest; directly advance that interest; and go no
further than necessary.

Copyright 2017 Cengage Learning. All Rights Reserved.

 Spotlight on Beer Labels: Case 2.2

Bad Frog Brewery, Inc. v. New York State

Liquor Authority (1998)
Did the State unconstitutionally restrict
commercial speech when it prohibited a
certain gesture (illustration) on beer
labels?

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-2b The First Amendment
Freedom of Speech
Unprotected Speech
Obscenity
It is a crime to disseminate and possess obscene
materials, including child pornography.
Defining obscene speech has proved difficult.
It is difficult to prohibit the dissemination of obscenity
and pornography online.
Virtual Child Pornography
It is a crime to intentionally distribute virtual child
pornographywhich uses computer-generated
images, not actual peoplewithout indicating that it is
computer-generated.

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-2c The First Amendment
Freedom of Religion (slide 1 of 3)

First Amendment may not establish a

religion or prohibit the free exercise of
religion.
The Establishment Clause
Establishment clause: Prohibits government
from establishing a state-sponsored religion,
or passing laws that favor one over the other.

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-2c The First Amendment
Freedom of Religion (slide 2 of 3)

Applicable Standard
Federal or state laws that do not promote or
place a significant burden on religion are
constitutional even if they have some impact on
religion.
Religious Displays
Case Example 2.10 Trunk v. City of San Diego
(2011)

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-2c The First Amendment
Freedom of Religion (slide 3 of 3)

The Free Exercise Clause

Free exercise clause: The provision in the First
Amendment that prohibits the government from
interfering with peoples religious practices or
forms of worship.
Employers must reasonably accommodate beliefs
as long as employee has sincerely held beliefs.
Case Example 2.11 Mitchell County v.
Zimmerman (2012)

Copyright 2017 Cengage Learning. All Rights Reserved.

 Case 2.3

Holt v. Hobbs (2015)

United States Supreme Court decision on
the free exercise clause and how
restrictions must be necessary

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-2c The First Amendment
Freedom of Religion
Public Welfare Exception
When religious practices work against public
policy and the public welfare, the government
can act.

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-3 Due Process and Equal
Protection
2-3a Due Process
Procedural Due Process
Any government decision to take life, liberty, or
property must be fair.
Requires: Notice and Fair Hearing
Substantive Due Process
Focuses on the content or the legislation (the
right itself)

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-3b Equal Protection

Government must treat similarly situated

individuals (or businesses) in the same
manner. Courts apply different tests:
Strict Scrutiny fundamental rights
Intermediate Scrutiny
Applied in cases involving discrimination based
on gender or legitimacy
The Rational Basis Test - economic rights
Case Example 2.18 Maxwells Pic-Pac, Inc. v.
Dehner (2014)

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-4 Privacy Rights

Constitutional Protection of Privacy

Rights
Olmstead v. United States (1928)
Griswold v. Connecticut (1965) found a right
to personal privacy implied in constitution,
expanded in Roe v. Wade (1973).

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-4a Federal Privacy Legislation

Freedom of Information Act (1966)

Privacy Act (1974)
Health Insurance Portability and
Accountability Act (HIPAA) (1996)

Copyright 2017 Cengage Learning. All Rights Reserved.

 2-4b The USA Patriot Act

Passed by Congress in the wake of the

terrorist attacks of September 11, 2001, and
then reauthorized twice (2006) and (2011)

Copyright 2017 Cengage Learning. All Rights Reserved.