Chapter 5 – The Constitution and the Regulation of Business Copyright © 2011 by Jeffrey Pittman

Chapter 5 – The Constitution and the Regulation of Business

Copyright © 2011 by Jeffrey Pittman

Section 1 – The Constitutional Powers of Government

History of the Constitution After our war of independence, the U.S.

operated under the Articles of Confederation, adopted in 1781

The Articles conferred little power on the federal government For example, the federal government could not

tax or raise an army A convention was held in Philadelphia, in 1787,

to consider amending the Articles of Confederation

The convention delegates eventually proposed a new constitution, a legal document that would need ratification by the states

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History of the Constitution The greatest fear about the proposed

Constitution was the creation of a strong central government

The Constitution debate, as captured in the Federalist Papers, identified protections against a strong central government


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The ConstitutionPreamble - ["We the people...."] Article I - The Legislative Branch Article II -The Presidency Article III -The Judiciary Article IV - The States Article V - The Amendment Process Article VI - Legal Status of the

Constitution Article VII - Ratification


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Proposed Forces Limiting the Federal Government Separation of powers, Articles I to III

Separation of powers is accomplished by dividing powers of government, expecting that each branch of government will act as a check on the other branches


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Proposed Forces Limiting the Federal Government Enumerated legislative powers, Article I,

Section 8 The federal legislature under the Constitution

is “limited” by possessing only powers enumerated in Article I, Section 8

Eventually, the Ninth and Tenth Amendments


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Protecting the States and the People

Amendment IXThe enumeration in the Constitution, of

certain rights, shall not be construed to deny or disparage others retained by the people.

Amendment XThe powers not delegated to the United

States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.


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The ConstitutionThe U.S. Constitution, as ratified in 1789

and amended in 1791, has two functions:

Create a system of government This is accomplished by the Constitution,

Articles I to VII Establish individual rights in relation to

the government This is accomplished by the Bill of Rights

and other amendmentsJeffrey Pittman - Legal Environment of Business

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Commerce Clause The majority of federal power today

over the business community comes from the Article 1, Section 8, the commerce clause “The Congress shall have power to

regulate commerce . . . among the several states”

State control over activities within the state comes in part through the state police powers


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Commerce Clause Note the national expansion of powers

under the commerce clause, state actions and the “dormant” clause


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Constitutional Clauses The Supremacy Clause Full Faith and Credit Clause Privileges and Immunities Clause


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Section 2 – Business and the Bill of Rights

The Role of the Amendments As we examine the Constitutional

Amendments, note that the protections found there only provide protection from the government

Private (nongovernmental) action is not regulated by the Constitution


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The Bill of RightsAmendment I

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.


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First Amendment - Speech“Congress shall make no law . . . abridging the freedom of speech”

The Supreme Court provides political speech the highest level of protection Note the possibility of symbolic speech


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First Amendment - Speech Unprotected speech includes obscenity, child

pornography, and defamation, for example See Lott v. Levitt

Partially protected speech includes commercial speech (advertising) – this is protected but not as highly as political speech Regarding Bad Frog Brewery v. New York, see

the Bad Frog Website) The government may regulate commercial

speech following the test identified in the next slide


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The First Amendment and Commercial Speech


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False or Misleading Commercial

Speech The government

may ban or restrict speech here at the discretion of the government

“True” Commercial Speech

The government may ban or restrict speech here only after showing the ban 1) goes no further than necessary to 2) directly advance 3) a substantial government interest

Freedom of Religion Congress shall make no law respecting an

establishment of religion (establishment clause), or prohibiting the free exercise thereof (free exercise clause). . .

Remember that this only protects religion regarding public (government) action and not private action Religion in private employment is regulated

by the 1964 Civil Rights Act, textbook Chapter 21


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The Bill of RightsAmendment IV

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.


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The Fourth Amendment


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If the searching party is a government employee:

US Constitution – The Fourth Amendment applies, protecting against unreasonable searches and seizures

See U.S. v. Moon

If the searching party is not a government employee:

No federal law is applicable; look to state law

Fifth Amendment The protections against self

incrimination from the Fifth Amendment only apply in criminal cases

Only people are protected by the Fifth, not businesses


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Section 3 – Due Process and Equal Protection

Due ProcessAmendment V

No person shall be . . . deprived of life, liberty, or property, without due process of law . . .

The above language provides protections for procedural due process and substantive due process


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Equal Protection The Fourteenth Amendment provides all

persons “equal protection of the laws.” Note the different levels of scrutiny, that

is, strict, intermediate, and rational basis


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Section 4 – Privacy Rights

Privacy Privacy is not directly mentioned in the

Constitution; the courts have inferred privacy protection from other Constitutional protections Remember that the Constitution only

provides protection from government action

Other privacy laws like HIPPA do apply to the private sector


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Documents

Chapter 5 – The Constitution and the Regulation of Business Copyright © 2011 by Jeffrey Pittman