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Constitutional Authority to Regulate Business
• 1787 US Constitution creates federal form of government
• Delegated powers
• Partnership w/exceptions
• 3 Branches = Checks and balances
Constitutional Authority to Regulate Business
• The Commerce Clause– Art. I Sect. 8 – Gibbons v. Ogden Broad Interpretation– US v. Lopez only limiting case
• Regulatory Powers of States– Police powers- protect or promote the public order,
health, safety, morals, general welfare– Presumed valid when conflict occurs– Raymond Motor & Oregon Waste Systems
Constitutional Authority to Regulate Business
• The Supremacy Clause– Art. VI and Preemption– Pervasive, comprehensive, detailed
• Taxing and Spending Powers– Art. I Sec. 8– Reasonable relationship test to sustain tax– Policy choices
Constitutional Authority to Regulate Business
• Business and the Bill of Rights– Adopted in 1791– Legal person status– Supremes interpret (so Vote!)
Constitutional Authority to Regulate Business
• First Amendment– Freedom of Speech
• Political speech, symbolic speech McIntyre v. Ohio Elections Commission
– Commercial Speech• Valid if it seeks to implement a substantial
government interest, directly advances that interest, and goes no further than necessary to accomplish its objective Rubin v. Coors
Constitutional Authority to Regulate Business
• First Amendment– Corporate Political Speech
• First National Bank of Boston v. Bellotti
– Unprotected Speech• Defamatory speech
• Threatening speech
• Pornography
• Fighting words
• Obscene speech Robinson v. Jacksonville Shipyards
Constitutional Authority to Regulate Business
• First Amendment– Freedom of religion
• Separation of church and state/Establishment Clause– No state sponsored religions
– No endorsement or preference
– Secular purpose of rest days?
– Accommodate all, hostility toward none
• Free exercise of religion – Compelling state interest test
Constitutional Authority to Regulate Business
• Fourth Amendment– The right of the people to be secure in their
persons, houses, papers and effects. • Search warrants based on reasonable
grounds/probable cause must be obtained from neutral third party
• Requires a particular description
• Exceptions: highly regulated businesses
Constitutional Authority to Regulate Business
• Fifth Amendment
– No person shall be compelled in any criminal case to be a witness against himself
– Does not apply to corporations or partnerships
Constitutional Authority to Regulate Business
• Other Constitutional Protections– The Privileges and Immunities Clause
Art.IV Sec. 2• Discrimination against nonresidents must pass
substantial relationship test
• Fourteenth Amendment protects against state, rather than federal government
Constitutional Authority to Regulate Business
• Other Constitutional Protections– The Full Faith and Credit Clause Art. IV Sec 1
• Legal rights established in one state are honored in every other state
• Deeds, contracts, wills, judicial decisions
• Not stare decisis or binding precedent
Constitutional Authority to Regulate Business
• Other Constitutional Protections– Due Process 5th and 14th Amendments
• Procedural Due Process– Neutral decision maker
– Notice and a hearing
Constitutional Authority to Regulate Business
• Other Constitutional Protections– Due Process 5th and 14th Amendments
• Substantive Due Process– If legislation affects a fundamental right it must be
justified by a compelling or overriding state interest when challenged in court – a very difficult swtandard
– Voting, speech, privacy
– Speed limits
– Rational basis test
Constitutional Authority to Regulate Business
• Other Constitutional Protections – Equal Protection
• 14th and 5th Amendment– It is legal to treat some people differently than others,
however, the government’s reason for the grouping the people differently – into different classifications – must pass
• Strict scrutiny or
• Intermediate scrutiny or
• The rational basis test
Constitutional Authority to Regulate Business
• Other Constitutional Protections – Equal Protection
• Strict Scrutiny– Generally, government loses its argument that grouping
people into these categories promotes a compelling state interest
– Race, national origin, citizen or alien
Constitutional Authority to Regulate Business
• Other Constitutional Protections – Equal Protection
• Intermediate Scrutiny– Grouping must be substantially related to important
government objectives
• Gender, illegitimacy
Constitutional Authority to Regulate Business
• Other Constitutional Protections– Equal Protection
• The Rational Basis Test– Government generally wins because grouping only has to
have a reasonable relationship to any legitimate government objective
• Red hair, height
Constitutional Authority to Regulate Business
• Other Constitutional Protections
– Right to Privacy• No such thing in the U.S. Constitution
– Made it up from the 1st, 3rd, 4th 5th and 9th Amendments
• Tort under state law
• Abortion, birth control, gay/lesbian relationships, assisted suicide
Constitutional Authority to Regulate Business
• Constitutional Law in Cyberspace
– Regulating online obscenity• 1st Amendment issues
• Communications Decency Act
• No patently offensive “speech” to minors
• Community Standards usually govern
• ACLU v. Reno
Constitutional Authority to Regulate Business
• Cyberspace
– Cryptography and the Constitution• Encrypted data and Crim law
– 4th amendment Search and seizure questions
– 5th amendment questions
• Encryption Source Codes and Free Speech– Bernstein v. U.S. Department of State
– ITAR
Constitutional Authority to Regulate Business
• Cyberspace– Free Speech and Unwanted Electronic Mail
• Governments can restrict the time, place or manner of distribution of materials
– However, the legislation must be
• Content neutral
• Narrowly tailored
• Leave open alternative channels of communications
– Your email address?