McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All Right Reserved The Legal & Regulatory Environment of Business 16e Chapter 6 The Constitution and Regulation of Business Reed Pagnattaro Cahoy Shedd Moorhead 6-2 think think think TANK TANK TANK What is the mechanism through which the states receive their governmental power from the federal government? a. The Tenth of the US Constitution. b. Article VI of the US Constitution. c. The Federal States Power-Sharing Act of 1791. d. States do not receive their power from the Federal government. 6-3 1
Food for thought The United States Constitution is the oldest constitutional document still in continuous use in the entire world. 6-4 Learning Objectives To appreciate how the structure of the U. S. Constitution provides the framework for our federal government. To understand the importance of the supremacy clause and the contracts clause for business. To recognize the major amendments to the U.S. Constitution. To analyze the basic protections created by the First, Second and Fourteenth s. 6-5 Introduction The United States Constitution provides the legal framework of our federal government and the authority it has to regulate business activities. 6-6 2
Strong Centralized Federal Government 3 Key Concepts Separation of Powers Supremacy Clause Contract Clause 6-7 Separation of Powers The success of the constitutional experiment was founded in the division of powers Checks and balances Federalism separate and distinct roles of levels of government. 6-8 Supremacy Clause Constitution Supreme of all Laws Federal Law over State Law Preemption State Law may be invalid for Conflicting with Federal Law 6-9 3
Contract Clause States cannot pass laws that impact rights and duties under existing contracts Does not apply to federal government May not apply in emergencies 6-10 QUIZ QUIZ QUIZ Do the protections of the Bill of Rights apply to businesses? a. Yes b. No 6-11 s & Basic Protections Not absolute Balance with public policy Removes issues from political process Varies during emergencies 6-12 4
s & Basic Protections 2nd 14 th 6-13 s & Basic Protections Freedoms: Religion Press Speech Assembly Right To Petition For Redress 6-14 s & Basic Protections Freedom of Religion Establishment Free Exercise Employment Discrimination 6-15 5
s & Basic Protections Freedom of Speech Symbolic speech Overbreadth Doctrine Commercial Speech Protects Corporations Includes Freedom of Information 6-16 s & Basic Protections Freedom of Speech Unprotected Speech Fighting words Words inciting violence Defamation Obscenity 6-17 Food for thought I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description [obscenity]; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it case is not that. --Justice Potter Stewart Jacobellis v. Ohio, 378 U.S. 184, 197 (1964) 6-18 6
s & Basic Protections Freedom of Press Organized Scrutiny of Government Not Absolute Prior Restraints Obscenity Defamation Public Figure Actual Malice 6-19 s & Basic Protections 2nd Right to Posses Guns 2008 individuals may have handguns in homes for self defense Narrow Opinion Few Court Opinions Increased litigation? 6-20 s & Basic Protections Due Process Procedural- Proper Notice & Hearing Substantive- Property/Rights Affected By Gov t Action 5 th - Federal 14 th - State Local Incorporation Doctrine 14 th 6-21 7
Equal Protection Minimum rationality Strict scrutiny- compelling state purpose Quasi-strict scrutiny 6-22 Equal Protection Issues 1. Legislative Apportionment 2. Real Estate- Racial Segregation 3. Rights Of Legitimates & Illegitimates 4. Jury Makeup 5. Voting Requirements 6. Welfare Residency 7. Rights Of Aliens 8. Property Tax To Finance Schools0 6-23 QUIZ QUIZ QUIZ Is it ever permissible for a law or government regulation to discriminate? a. Yes b. No 6-24 8