McGraw-Hill/Irwin

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The Legal & Regulatory Environment of Business 16e

Chapter 6

The Constitution and Regulation of Business

Reed Pagnattaro Cahoy Shedd Moorhead
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TANK TANK TANK

What is the mechanism through which the states receive their governmental power from the federal government? a. The Tenth Amendment 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.
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Food for thought

The United States Constitution is the oldest constitutional document still in continuous use in the entire world.
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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 Amendments.
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Introduction
The United States Constitution provides the legal framework of our federal government and the authority it has to regulate business activities.
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Strong Centralized Federal Government

3 Key Concepts

Separation of Powers

Supremacy Clause

Contract Clause

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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.

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Supremacy Clause
Constitution Supreme of all Laws Federal Law over State Law Preemption State Law may be invalid for Conflicting with Federal Law
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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
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QUIZ QUIZ QUIZ

Do the protections of the Bill of Rights apply to businesses? a. Yes b. No

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Amendments & Basic Protections

Not absolute Balance with public policy Removes issues from political process Varies during emergencies
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Amendments & Basic Protections

Amendment

1st

Amendment

2nd

Amendment

14th

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Amendments & Basic Protections

Amendment

1st

Freedoms:
Religion Press Speech Assembly

Right To Petition
For Redress
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Amendments & Basic Protections

Amendment

1st

1st Amendment Freedom of Religion

Establishment

Free Exercise Employment Discrimination

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Amendments & Basic Protections

Amendment

st

1st Amendment Freedom of Speech

Symbolic speech

Overbreadth Doctrine Commercial Speech

Protects Corporations Includes Freedom of Information
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Amendments & Basic Protections

Amendment

st

1st Amendment Freedom of Speech Unprotected Speech

Fighting words
Words inciting violence Defamation Obscenity
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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 itcase is not that. --Justice Potter Stewart
Jacobellis v. Ohio, 378 U.S. 184, 197 (1964)
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Amendments & Basic Protections

Amendment

st

1st Amendment Freedom of Press

Organized Scrutiny of Government

Not Absolute Prior Restraints Obscenity Defamation

Public Figure Actual Malice
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Amendments & Basic Protections

Amendment

2nd

Right to Posses Guns

Few Court Opinions 2008 individuals may have handguns in homes for self defense Narrow Opinion

Increased litigation?

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Amendments & Basic Protections

Due Process Procedural- Proper Notice
& Hearing

Amendment

14th

Substantive-

Property/Rights Affected By Govt Action

5th Amendment- Federal 14th Amendment- State

Local

Incorporation Doctrine
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Equal Protection
Minimum rationality Strict scrutiny- compelling

state purpose

Quasi-strict scrutiny

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Equal Protection Issues

1. 2. 3. 4. Legislative Apportionment Real EstateRacial Segregation Rights Of Legitimates & Illegitimates Jury Makeup 5. Voting Requirements 6. Welfare Residency 7. Rights Of Aliens 8. Property Tax To Finance Schools0

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QUIZ QUIZ QUIZ

Is it ever permissible for a law or government regulation to discriminate? a. Yes b. No

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