Transcript Slide 1
F I F T E E N T H E D I T I O N The Legal & Regulatory Environment of Business Chapter 6— The Constitution and Regulation of Business
McGraw-Hill/Irwin
REED SHEDD PAGNATTARO MOREHEAD
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction
The United States Constitution provides the legal framework of our federal government and the authority it has to regulate business activities.
6-2
Learning Objectives
To appreciate the structure of the United States Constitution.
To distinguish between basic concepts and basic protections contained in the Constitution.
To understand how these provisions impact business.
To learn about the constitutional framework granting governments authority to regulate business activities.
To comprehend how this governmental authority is implemented through administrative agencies.
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think think
TANK TANK
think
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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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Strong Centralized Federal Government
3 Key Concepts
Separation of Powers Supremacy Clause Contract Clause 6-5
Separation of Powers
Success of constitutional experiment founded in 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 6-7
Contract Clause
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States cannot pass laws that impact rights and duties under existing contracts
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Does not apply to federal government
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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
1 st Amendment 2nd Amendment 14 th Amendment
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Amendments & Basic Protections
1 st Amendment
Freedoms:
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Religion
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Press
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Speech
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Assembly
Right To Petition For Redress
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Amendments & Basic Protections
1 st Amendment 1 st Amendment – Freedom of Religion
Establishment
Free Exercise
Employment Discrimination
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Amendments & Basic Protections
1 st Amendment 1 st Amendment – Freedom of Press
Organized Scrutiny of Government
Not Absolute – Prior Restraints
Defamation
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Libel
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Public Figure – Actual Malice
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Amendments & Basic Protections
1 st Amendment 1 st Amendment – Freedom of Speech
Symbolic speech
Overbreadth Doctrine
Commercial Speech
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Protects Corporations
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Includes Freedom of Information
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Amendments & Basic Protections
2nd Amendment
Right to Possess 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
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Procedural- Proper Notice & Hearing 14 th Amendment
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Substantive Property/Rights Affected By Gov’t Action
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5 th Amendment- Federal
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14 th Local Amendment- State
Incorporation Doctrine
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Equal Protection
Minimum rationality Strict scrutiny- compelling state purpose Quasi-strict scrutiny 6-18
Equal Protection Issues
1.
2.
3.
4.
Legislative Apportionment Real Estate- Racial Segregation Rights Of Legitimates & Illegitimates Jury Makeup 5.
6.
7.
8.
Voting Requirements Welfare Residency Rights Of Aliens Property Tax To Finance Schools 6-19
pop pop pop
QUIZ QUIZ QUIZ
Is it ever permissible for a law or government regulation to discriminate?
a. Yes b. No
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Commerce Clause
“Congress shall have power . . . to regulate commerce with foreign Nations, and among the several states and with the Indian tribes.”
Art. I, Sec. 8
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Commerce Clause
“Key Areas” Regulation
Foreign Commerce
Interstate Commerce Limitation
State Police Power
State Taxation
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Foreign Commerce
Federal government has exclusive right to regulate foreign commerce State can regulate commerce if occurs entirely within state boundaries 6-23
Interstate Commerce
Persons Engaged In Activities “Affecting”
Power Is Very Broad
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think think
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think
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Who is the ultimate interpreter of the Constitution?
a. Congress b. The President of the United States c. The Supreme Court d. The general public
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Police Powers
Definition
State Legislation And Regulation To Protect The Public’s Health, Safety, Morals, And General Welfare.
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Dormant Commerce Clause: Limits State Police Powers
Arbitrary, Capricious Or Unreasonable Limits (Dormant Commerce Clause) Federal Commerce Clause
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Exclusively Federal Exclusively State
Areas of Regulation of Commerce
Dual Regulation Federal Preemption Regulation But No Preemption Irreconcilable Conflicts Undue Burden No Federal Regulation No Discrimination 6-28
State Taxation
Form Of Regulation Limited By Commerce Clause Apportionment Must Be Sufficient Tie Nexus Or
Taxable Situs
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Regulatory Process – Administrative Agencies Authority of government to regulate professional and personal lives is founded in constitutional principles of: Commerce Clause Police Powers Performed by administrative agencies
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Administrative Agencies Examples
Federal Trade Commission
National Labor Relations Board
Equal Employment Opportunity Commission
Securities & Exchange Commission
Environmental Protection Agency
Federal Aviation Administration
Consumer Product Safety Commission
Federal Communications Commission
Federal Energy Regulatory Commission
Federal Reserve Board
Food & Drug Administration
Nuclear Regulatory Commission
Occupational Safety & Health Administration
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Regulatory Authority
Quasi-Legislative (to issue rules or regulations with impact of law) Quasi-Judicial (to make decisions like a court)
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Judicial Review Of Agency Rule Making
Rules & Regs Must Be Within Legislative Grant Of Power Delegation Valid?
Definite - Violate Due Process?
Agency’s Power Limited To Certain Areas Broad Language Authority Exceeded?
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Review Of Adjudications: Procedural Aspects Judicial Review Is Limited Agency Authority Limited Delegated From Legislature Develop Rules Of Procedure Courts Lack Authority To Substitute For Agency Doctrines Exhaustion Of Remedies Primary Jurisdiction Equal Access To Justice Act 6-34
Review Of Factual Determinations
Court Does
Presume Findings Of Fact Correct Analyze Agency Proceedings
Court Does Not
Reweigh Evidence Make Independent Determination Substitute Its View For Agency’s 6-35
Growth of Government
“All levels of government are larger and more complex in the first decade of the 21 st century than 25 years ago.” 6-36