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C H A P T E R 4
Constitutional Bases for Business Regulation
TRUE-FALSE QUESTIONS
1. The Fifth Amendment contains the “due process” restriction on actions by the federal government.
2. The doctrine of federalism serves to allocate power between the federal government and government by the
states.
3. The U.S. Supreme Court has original jurisdiction over cases affecting ambassadors and cases in which a state
is a party.
4. Under some circumstances a law passed by Congress may be valid even if it violates the U.S. Constitution.
5. The Equal Protection Clause of the Fourteenth Amendment limits the power of the federal government to
regulate commerce.
6. The U.S. Supreme Court struck down as unconstitutional the line-item veto given to the President by
Congress.
7. The U.S. Supreme Court upheld a federal law banning guns near schools as being within Congress’s power
under the Commerce Clause.
CHAPTER 4 CONSTITUTIONAL BASES FOR BUSINESS REGULATION 17
8. The Second Amendment to the U.S. Constitution grants persons the right to bear arms.
9. No provisions of the Bill of Rights have been held to limit the actions of state governments because the Bill
of Rights only applies to federal government actions.
10. Obscene material does not enjoy any protection under the First Amendment.
11. Procedural due process protects fundamental rights.
12. When a governmental action affects a person’s life, liberty, or property, the due process requirement applies,
and some form of notice and hearing is required.
13. Without a constitutional grant of power, the federal government cannot act.
14. The case of Marbury v. Madison gave federal courts the power to review acts of the other two branches of the
federal government to determine the existence of constitutional violations.
15. Members of the U.S. Supreme Court are appointed by Congress with the advice and consent of the President.
18 MANAGERS AND THE LEGAL ENVIRONMENT
16. Executive agreements made by the President require the advice and consent of the U.S. Senate.
17. The executive privilege fails to protect the President during his or her term of office from civil litigation over
events that occurred before he or she took office.
18. In the U.S., racist speech is unprotected by the First Amendment.
19. The Free Exercise Clause prohibits all restrictions on the practice of religion.
20. Over time the U.S. Supreme Court has changed its view of the scope of the Commerce Clause.
MULTIPLE-CHOICE QUESTIONS
1. Which of the following is not one of the three branches of government?
A. The legislative branch
B. The judicial branch
C. The representative branch
D. The executive branch
2. In what year did the U.S. Constitution become effective?
A. 1776
B. 1789
C. 1774
CHAPTER 4 CONSTITUTIONAL BASES FOR BUSINESS REGULATION 19
D. 1790
3. The Bill of Rights consists of which of the following?
A. The first ten amendments to the U.S. Constitution.
B. The first five amendments to the U.S. Constitution.
C. All amendments to the U.S. Constitution.
D. All amendments to the U.S. Constitution after the first ten amendments were passed.
4. The President has a type of immunity known as _________, which protects against the forced disclosure of
Presidential communications made in the exercise of executive power.
A. immunity privilege
B. federal privilege
C. executive privilege
D. mandated privilege
5. The _____________ Clause of Article VI of the U.S. Constitution states that the Constitution, laws, and
treaties of the United States take precedence over state laws and that the judges of the state courts must follow
federal law.
A. Supremacy
B. Federalization
C. Legalism
D. Preemption
6. What did the U.S. Supreme Court decide regarding whether the Violent Crimes Against Women Act was
validly enacted by Congress?
A. That the law was validly enacted under the authority of the due process clause of the U.S. Constitution.
B. That the law was validly enacted under the authority of the equal protection clause of the U.S.
Constitution.
C. That the law was not valid because it discriminated against men.
D. That the law was not valid because Congress exceeded its authority under the Commerce Clause of the
U.S. Constitution.
7. In which of the following cases did the U.S. Supreme Court uphold Title II of the Civil Rights Act of 1964
prohibiting discrimination or segregation on the grounds of race, color, religion or national origin in
any inn, hotel, motel, or other establishment of more than five rooms that provides lodging to transient
guests?
A. Gibbons v. Ogden
B. Reno v. Condon
C. Heart of Atlanta Motel, Inc. v. United States
D. Sweet Dreams Hotel v. United States and State Department
8. Which of the following was the result at the U.S. Supreme Court level in the case of Board of Education of
Independent School District No. 92 of Pottawatomie County v. Earls, the case in the text involving whether a
school system requiring student-athletes to take a drug test without any suspicion of drug use violates the
Fourth Amendment?
A. That individualized suspicion is not a consideration in determining whether a search is reasonable and
that the searches at issue were, therefore, constitutional.
B. That the searches were unconstitutional because no individual suspicion was present.
C. That the searches were unconstitutional because minors were involved regardless of whether or not
individual suspicion was present.
D. That individualized suspicion is not always required and that the searches in the case were constitutional.
9. The _____test is applied to determine if laws impacting speech violate the U.S. Constitution.
A. incitement of violence
B. Brandenburg v. Ohio
C. espionage and sedition
D. clear and present danger
10. Which of the following was the result at the U.S. Supreme Court level in Brown v. Entertainment Merchants
Association, the case in the text involving the issue of whether the state of California could prohibit the sale
or rental of graphically violent video games to minors?
A. That the law was valid because the video games did not qualify for First Amendment protection.
B. That the law was valid because minors are not entitled to First Amendment protection.
C. That the law was invalid because the state could not establish a rational basis for it.
D. That the law was invalid because the state could not satisfy the strict scrutiny test applied.
11. Laws that punish actions that were not illegal when performed are known as
CHAPTER 4 CONSTITUTIONAL BASES FOR BUSINESS REGULATION 21
A. Bills of attainder
B. Proscriptive laws
C. Ex post facto laws
D. Criminal laws
12. A law enacted to punish a specific individual would be an example of a(n)
A. Bill of attainder
B. Ex post facto law
C. Proscriptive law
D. Per se law
13. The Fifth Amendment does not contain the
A. Self incrimination provision
B. Grand jury requirement
C. Jury trial requirement
D. Double jeopardy prohibition
14. In order to hold a media defendant liable for statements made about a public figure, _____ must be
established on the part of the media defendant.
A. actual malice
B. negligence
C. only inaccuracy
D. intent to inflict monetary harm
15. Under Supreme Court rulings, certain provisions granted in the Bill of Rights are applied to the States by the
________ Amendment.
A. Tenth
B. Eleventh
C. Thirteenth
D. Fourteenth
16. Which of the following ws the result at the U.S. Supreme Court level in Citizens United v. Federal Election
Commission in regard to the constitutionality of corporate political expenditures?
A. The Court upheld federal law banning corporate independent expenditures on political candidates and also
upheld the federal prohibition on the use of corporate treasury funds for electioneering communications or
express advocacy.
B. The Court upheld federal law banning corporate independent expenditures on political candidates but
struck as unconstitutional the federal prohibition on the use of corporate treasury funds for electioneering
communications or express advocacy.
C. The Court struck as unconstitutional federal law banning corporate independent expenditures on political
candidates but upheld the federal prohibition on the use of corporate treasury funds for electioneering
communications or express advocacy.
D. The Court struck as unconstitutional federal law banning corporate independent expenditures on political
candidates and also struck as unconstitutional the federal prohibition on the use of corporate treasury funds
for electioneering communications or express advocacy.
17. Which of the following was the result at the U.S. Supreme Court level in Citizens United v. Federal Election
Commission regarding the constitutionality of the federal law providing that televised electioneering
communications funded by anyone other than a candidate must include a disclaimer setting forth identifying
information as to sponsorship?
A. That the law was unconstitutional only if a corporate entity, not an individual, sponsored the
communication.
B. That the law was unconstitutional only if an individual, not a corporate entity, sponsored the
communication.
C. That the law was unconstitutional in that it involved small expenditures as well as larger ones.
D. That the law was constitutional.
18. The division of power among the executive, legislative and judicial branches of government is typically
referred to as
A. Federalism
B. Judicial review
C. Separation of powers
D. The Supremacy clause
19. Which of the following was the result in the case in the text challenging regulations involving the posting to a
website of human readable source code of an encryption software program?
A. That computer source code is not protected by the First Amendment.
B. That computer source code is protected by the First Amendment and that restrictions involving restrictions
to such code are reviewed under a rational basis standard.
C. That computer source code is protected by the First Amendment and that restrictions involving restrictions
to such code are reviewed under the substantially related test.
CHAPTER 4 CONSTITUTIONAL BASES FOR BUSINESS REGULATION 23
D. That computer source code is protected by the First Amendment and that restrictions involving
restrictions to such code are reviewed under a strict scrutiny standard.
20. Congress can override a President’s veto by a _________ vote of both the House of Representatives and the
Senate.
A. majority
B. two-thirds
C. three-quarters
D. unanimous
21. The President has the power to make treaties
A. with the advice and consent of the House of Representatives.
B. with the advice and consent of the Senate.
C. with the advice and consent of both the House of Representatives and the Senate.
D. without the advice and consent of either the House of Representatives or the Senate.
22. The ______ constitutional provision forbids trying a person twice for the same crime.
A. Ex post facto
B. Bill of attainder
C. Double jeopardy
D. Privileges and immunities
23. The Seventh Amendment gives the right to a jury trial in civil cases when the value in dispute is greater than
______.
A. $20
B. $40
C. $1,000
D. $5,000
24. Preemption of state law when it directly conflicts with federal law is known as ______ preemption whereas
preemption of state law when Congress has manifested intent to regulate an entire area without state
participation is known as ______ preemption.
A. absolute, implied
B. express, absolute
C. express, field
D. absolute, field
25. Which of the following was the result in Florida v. U.S. Department of Health and Human Services, the
case in the text in which the Eleventh Circuit reviewed provisions of the Patient Protection and Affordable
Care Act containing as one of its provisions that Americans or their employers purchase health care
insurance?
A. The court ruled that the act was constitutional in its entirety.
B. The court ruled that the act was unconstitutional in its entirety.
C. The court ruled that the section of the act requiring the purchase of health insurance was constitutional but
that other provisions of the act rendered the entire law unconstitutional.
D. The court ruled that the section of the act requiring the purchase of health insurance was unconstitutional
but that the unconstitutional section could be severed leaving other sections of the law intact.
26. The _________ Amendment provides that no state shall “deprive any person of life, liberty, or property,
without due process of law.”
A. Seventh
B. Tenth
C. Eleventh
D. Fourteenth
27. The general power retained by the states to protect the health, safety, welfare, and morals of state residents is
often referred to as ______ power.
A. police
B. regulatory
C. protective
D. community
28. When equal protection is concerned, classifications based on gender are subject to a[n] ____________ test.
A. rational basis
B. strict scrutiny
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C. substantially related
D. gender-based
29. When equal protection is concerned, classifications based on race are subject to a[n] ____________ test.
A. rational basis
B. strict scrutiny
C. substantially related
D. race-based
30. Even when Congress has taken no action in regard to a matter, the _____ or ______Commerce Clause may
impose restrictions on state action.
A. Dormant or negative
B. Dormant or positive
C. Relative or positive
D. Relative or negative
Fact Pattern 4-1 (Questions 31-32 apply)
Martin is a legal secretary for Allison, a partner in a large law firm in Knoxville. Allison finds Martin quite
annoying. The last straw occurs when Martin tells Allison that she looks pale and appears to have been
partying a bit too hard. Allison fires Martin on the spot. Martin tells Allison that he has been studying
constitutional law, and that she is guilty of violating not only his due process rights but his equal protection
rights as well. Martin says that he was entitled to a hearing before any disciplinary action was taken, and that
the firm’s practice is that all secretaries are entitled to tell attorneys when they do not appear to be functioning
at their best. Martin says that he is filing suit tomorrow.
?31. Refer to fact pattern 4-1. Which of the following is true regarding Martin’s ability to win on a claim alleging
violation of the due process clause of the U.S. Constitution?
A. Martin will win only if he can establish that the law firm has at least one governmental client.
B. Martin will win if he can establish that all other secretaries fired within at least the last year were given a
hearing before termination.
C. Martin will win if he can establish that at least one secretary fired within the last year was given a hearing
before termination.
D. Martin will lose because no governmental action was involved.
26 MANAGERS AND THE LEGAL ENVIRONMENT
?32. Refer to fact pattern 4-1. Which of the following is true regarding Martin’s ability to win on a claim alleging
violation of the equal protection clause of the fourteenth amendment to the U.S. Constitution?
A. Martin will lose because no statute or other action involving the government was involved.
B. Martin will lose only if other female secretaries have been fired under similar circumstances.
C. Martin will lose only if other female and male secretaries have been fired under similar circumstances.
D. Whether Martin will lose or win depends on whether the judge decides to apply a rational basis test or a
strict scrutiny test to his claims.
Fact Pattern 4-2 (Questions 33-35 apply)
Wally, a law school student, is an intern for Rebecca, an assistant professor who is attempting to get tenure at
Imperial Law School in part by getting an article published on the right to a jury trial. Rebecca asks Wally to
explain to her the right to a jury trial under the U. S. Constitution as applied to jury trials involving state law.
33. Refer to fact pattern 4-2. Which of the following sections of the U.S. Constitution should Wally reference
when discussing the matter of the right to a jury trial with Rebecca?
A. The First Amendment
B. The Fifth Amendment
C. The Seventh Amendment
D. Article One, Section Eight
34. Refer to fact pattern 4-2. What should Wally tell Rebecca regarding whether the U.S. Constitution requires
that jury trials be held in state court civil cases?
A. That there is no federal constitutional requirement that jury trials be held in state court civil cases.
B. That the federal constitution requires that jury trials be held in state court civil cases only if the
controversy involved exceeds the amount of $75,000.
C. That the federal constitution requires that jury trials be held in state court civil cases only if the
controversy involved exceeds the amount of $20.
D. That in all state court civil cases the federal constitution gives any party the right to demand a jury trial.
35. Refer to fact pattern 4-2. What should Wally tell Rebecca regarding whether the U.S. Constitution requires
that jury trials be held in federal civil court cases involving diversity jurisdiction and applying state law?
A. That the U.S. Constitution requires that a jury trial be held only if the controversy exceeds the amount of
$75,000, and the parties involved are all residents of the same state.
B. That the U.S. Constitution requires that a jury trial be held in all such trials.
C. That the U.S. Constitution does not provide the right to a jury in such situations.
D. That the U.S. Constitution provides that when a federal court has jurisdiction in a case based solely on
diversity of citizenship, the federal court should require a jury trial only if a state court in that state would
require a jury trial.
CHAPTER 4 CONSTITUTIONAL BASES FOR BUSINESS REGULATION 27
Fact Pattern 4-3 (Questions 36-37 apply)
Polly owns a restaurant seating 150 people. She just learns of a newly enacted regulation in her city requiring
that larger restaurants seating over 100 people be inspected by the health department on a monthly basis
whereas smaller restaurants would only be inspected twice per year. She also learned that Frank, the local
mayor, who recently went through a nasty divorce, was able to get passed a law requiring that restaurants
owned by women pay a higher fee to receive a business license than those owned by men. Polly is angry
about both laws and wants to take action to have them struck down.
36. Refer to fact pattern 4-3. Which of the following would be the city’s best argument that the law pertaining to
more frequent inspections of larger restaurants should be upheld?
A. That under the rational basis test, inspections by the health department are needed in order to guard
against food-borne illnesses.
B. That under the strict scrutiny test, larger restaurants are important to the tax basis of the community and
should, therefore, be inspected more often to guard against illness and resulting lawsuits that could impact the
ability of the restaurants to remain in business.
C. That under the substantially related test, owners of larger restaurants should expect to be inspected more
often because products used in interstate commerce are invariably involved.
D. That under the common good test, large restaurants should be inspected more often in order to protect the
community’s tax base.
37. Refer to fact pattern 4-3. Which of the following is the city’s best argument that the law imposing a higher
fee on female restaurant owners should be upheld?
A. That under the rational basis test, females should pay higher taxes so long as it can be shown that they
have a higher rate of business failure.
B. That under the intermediate level test, distinctions involving gender are examined in the same way as
distinctions based on guarantees in the Bill of Rights, and that the Bill of Rights allows gender–based
classifications.
C. That under the strict scrutiny test, gender is a legitimate method by which to delineate differences between
categories of citizens.
D. The city does not have a good argument because there is no justification for the distinction under the
substantially related test.
ESSAY QUESTIONS
1. The Tiny Motel is located in State X. It is not readily accessible from any major highway. Few, if any of their
guests are from out of state. The motel has filed suit in federal court to be exempt from the anti-discrimination
provisions of the Civil Rights Act of 1964. What are the arguments for and against exemption?
28 MANAGERS AND THE LEGAL ENVIRONMENT
2. State X has passed legislation to limit the amount of out–of-state widgets sold in the state. You are asked by
an out-of-state manufacturer to file a complaint in federal court to fight the law. What is your best argument?
3. In an effort to promote family time, State X passes a law prohibiting the advertisement in the state of movies
rated “restricted.” The law is challenged by a coalition of state newspapers on the basis that it violates the
First Amendment of the U.S. Constitution. Set forth the test the court should apply in order to determine
whether the law is constitutional and how the court would likely rule.
4. State Y is planning a new superhighway. The traffic in state Y does not require any new roads. However, the
state wishes to be the first in the U.S. to have a wild animal park running down the center of its highway. This
will require 40% more land than ordinary superhighways. Claiming the power of eminent domain, the State
has attempted to take Greg’s house. Greg has filed suit to prevent this. How will the court decide this case
and why?
5. Bruce is in charge of the library for a local public school and asks you if he is required to take any action to
prevent students from viewing obscene material. What would you tell him?
6. Under what circumstances is state law preempted in favor of federal law?
7. State X passes a law restricting the right of citizens to vacation in foreign countries because the state prefers
that its citizens spend their vacation dollars in the U.S. A group of state citizens challenge the law. Set forth
the standard a court would apply in reviewing the law and the likely outcome of the case.