978-0078023866 Chapter 8 Internet Exercise and Supplements Part 2

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Chapter 08 – Government Regulation of Business

Answers to ‘Voyeur Dorm v. City of Tampa’ Questions (p.350)

a. The court pointed out that the owners were not offering adult entertainment to members of the

b. The plain language of the ordinance contained no express statement that “the members of the

c. Generally, Tampa was worried about “secondary effects,” such as increased crime, increased

d. Offered as possibilities, although difficult to prevail on, are obscenity, nuisance or that the

a. Rules are necessary in regulating the consumption of alcohol by the minors. Since consumption

b. The bar is negligent towards the distribution of liquor to the minors. Considering the number of

alcohol-related tickets issued over the period of two years it’s clear that an intervention of some

a. The “sexually oriented business” ordinance as applied to adult businesses purveying speech

b. A badly divided court, filing four separate opinions in 48 pages, found a First Amendment

violation involving prior restraint of protected expression. The ordinance did not provide

adequate procedural safeguards in that it neither required the city to decide on a license

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Chapter 08 – Government Regulation of Business

a. The Los Angeles rules were challenged on First Amendment freedom of speech grounds. The

9th Circuit ruled for Los Angeles. Using the Central Hudson test, the court affirmed the general

right of cities to impose reasonable limitations on signs in the interests of safety and aesthetics.

b. This is an opinion based question. Los Angeles Councilman Ed Reyes noted that some

neighborhoods detest billboards while others welcome them. “There are places that want to feel

5. This can be a discussion based question. Each of the requirements mentioned seem appropriate as

a. This can be a discussion based question. The market can have significant impact on protecting

b. This is an example of imperfect information—particularly useable information in the hands of the

Federal Communications Commission v. Fox Television Stations and Federal

Communications Commission v. ABC 132 S. Ct. 2307 (2012) (p. 359)

Syllabus

This case concerns isolated utterances of the F- and S-words during two live broadcasts aired by Fox

Television Stations, Inc. The FCC upheld indecency findings under existing rules allowing fleeting

expletives to be actionable. The FCC concluded that a lack of repetition of the expletive weighs against

Answers to ‘Federal Communications Commission v. Fox Television Stations and Federal

Communications Commission v. ABC’ Questions (p. 361)

1. The Court found the FCC decision “arbitrary and capricious” in violation of the Administrative

Procedure Act. The Court was concerned that the FCC was changing its prior policy without sufficient

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Chapter 08 – Government Regulation of Business

The Commission’s change in direction was considered “entirely rational” in that the distinction

between literal and non-literal uses of the offensive words “made no sense” and requiring repetitive

use of non-literal words to find indecency likewise “made no sense.” The Commission was following

2. A decision is considered arbitrary and capricious when it is not based on reason, evidence and

3. This is an opinion based question. A recent Pew survey found that 75 percent of adults favor tighter

enforcement of broadcasting indecency rules. The Supreme Court majority opinion in FCC v. Fox did

not reach the First Amendment question associated with the case, but Justice Ginsburg raised the

issue in her dissent by contrasting the fleeting nature of the expletives in the Fox case to the George

4. The Times explained that nearly 90 percent of television viewers subscribe to cable or satellite

Answers to Parts One and Two Questions (p. 351)

1. This can be discussion based question. State panel’s decision of disqualifying Hale because of his

a. Presumably, the city was concerned that ignoring this “nuisance” might open the door to other

more serious nuisances. They would have been concerned about aesthetics and safety.

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Chapter 08 – Government Regulation of Business

b. This is an opinion based question. A makeshift tree house was treated as a nuisance because it

3. This is a discussion based question. Efforts were made to reduce the role of government in big

portions of American life. Once tightly controlled industries, energy, transportation, and

a. Southern Pacific’s claim resides in the Commerce Clause. The argument is that the Arizona

b. Southern Pacific prevailed. The court approved the arguments noted above and concluded that

a. Defects in the harness resulting in the death of the woman from Connecticut shows that

parasailing operators do not maintain standards and are not subjected to stringent safety

b. One should understand that when the parasailing safety is left to the market the odds of the

Answers to Part Three Questions (p. 363)

a. This can be a discussion based question. The agency ruling was that “In context, none of the

segments were patently offensive under contemporary community standards for the broadcast

b. This can be discussion based question.

2. This can be a discussion based question. Both Kia and Castrol pulled their ads. Kia pulled all its ads

on F/X, not just those that ran on The Shield. Student answers will vary.

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Chapter 08 – Government Regulation of Business

3. The Supreme Court held that 505 violated the Free Speech Clause because it was an attempt to

Answers to Chapter Questions (p. 373)

1. The Commerce Clause does not give the federal government the authority to regulate the

noncommercial cultivation and personal, medical use of marijuana that does not cross state lines. If

intrastate use of marijuana has a substantial effect on interstate commerce in marijuana than it would

a. Government intervention in a free enterprise economy would be justified only when the market

is unable to serve the public interest that is, in instances of market failure. Market failure is

attributed to certain inherent imperfections in the market itself. The government not only targets

b. This is an opinion based question. The rules and regulation of either government or the free

market or both might not yield successful regulation. People tend to trust the one whose

c. For 30 years prior to the meltdown, the government gradually diminished its oversight of the

banking industry in an effort to allow the market a greater voice and to render American banks

One should also understand that regulation, particularly in the banking sector, is an increasingly

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Chapter 08 – Government Regulation of Business

a. Advocates of legalizing and regulating Internet gambling point to the confusion in current law,

the inability to effectively enforce the law, personal freedom, one’s willingness to allow gambling

b. This is an opinion based question. Students’ answers will vary.

a. Economic Freedom exists when individuals are free to work, produce, consume, and invest—

b. To measure a nation’s level of overall economic freedom one can include factors such as: Trade

c. A higher level of economic freedom is associated with a higher level of per capita Gross

5. Reich gives a number of examples of increased litigation—all of the tobacco lawsuits (from both

government and consumers), suits against gun manufacturers and companies supporting sweatshop

a. Coaches might not support the idea of deregulating. The proposal for the reduction of the

current rules—allowing schools to make an unrestricted number of phone calls and texts to

recruits, allowing any staff member to contact recruits, and permitting schools to send unlimited

b. This is an opinion based question. Deregulation might result in unofficial and undocumented

favors to better players during the process of recruiting. It would also be difficult for the coaches

c. This is an opinion based question. In raising children of high school age, a mix of heavy rules

and lenience depending on the situations at a particular time would be a favourable parental

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Chapter 08 – Government Regulation of Business

approach.

7. Marriage is a private and personal affair. Regulation would be necessary when:

The married couple is getting divorced

8. The indirect cost of compliance. Meeting pollution requirements, job safety standards, EEOC

guidelines, and so on requires expenditures which are ordinarily passed on to the consumer via

9. Private litigation would certainly increase. Presumably the free market would replace former

10.

a. A portion of Schlesinger’s argument says:

The know-nothing crusade against government springs from a conviction that, if people

get government off their backs, their problems will solve themselves. But, far from

b. This can be a discussion based question. Schlesinger doesn’t think that people have much in

the way of economic fairness. He points to a study by Professor Edward N. Wolff indicating that

11. The “pure numbers” is one place to start. Between January 1990 and January 1992, U.S. nonfarm

12.

a. Objections that would arise due to the increased taxes on junk food include:

Nanny state diminishing personal freedom

Taxes being ineffective in achieving the desired goal

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Chapter 08 – Government Regulation of Business

Taxes hitting low income citizens the hardest

b. This is an opinion. According to a 2009 Kaiser Family Foundation poll, 55 percent of

c. A Department of Agriculture study found that reducing the price of fruits and vegetables by 10

13. On the one hand, cost-benefit analysis reduces health care costs. On the other hand, such analysis

14. Stiglitz pointed to the Internet as a government-initiated program that was kept alive in the Pentagon

until it caught on. That successful federal investment, Mr. Stiglitz contends, is the latest in a long

15. The FAA might allocate slots. Slots might be sold by the government. (Note that the richer carriers

16. This argument was made by James B. MacRae, Jr., of the Office of Information and Regulatory

Affairs about a proposed regulation from the Occupational Safety and Health Administration. He

17. On one hand, tanning beds are hazardous, similar to drinking alcohol, and other activities in which

18. This is an opinion based question. Kristof said, “[G]uns are far more deadly in America, (then other

countries), not least because there are so many of them. There are about 85 guns per 100 people in

Supplementary Cases

I. Carbone v. Town of Clarkstown, 114 S.Ct. 1677 (1994) (See State and Local

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Chapter 08 – Government Regulation of Business

Regulation of Interstate Commerce, p. 342)

Syllabus

The New York State Dept. of Environmental Conservation wanted Clarkstown to build a solid

waste transfer station that would separate recyclable from non-recyclable wastes. Clarkstown

negotiated with a local contractor to build and operate such a facility. The town guaranteed to the

contractor receipt of a minimum tonnage of waste per year (thus earning a minimum gross

revenue), with the town making up the deficit annually if the minimum tonnage was not received.

Then, to assure sufficient use of the facility, the town adopted an ordinance requiring all

nonhazardous solid waste within the town to be sent to the new facility. Carbone Inc. operated a

recycling center in Clarkstown. In order to avoid the use fee at the new facility, it shipped its

non-recyclable waste out of state. The town then sought a court order requiring Carbone to use

the new facility.

The Supreme Court held that the town’s ordinance did regulate interstate commerce, in part by

depriving out-of-state facilities access to the local market for waste disposal. The ordinance would

nevertheless be valid unless it failed either one of two tests: (1) whether the ordinance

discriminates against interstate commerce or (2) whether the ordinance imposes a burden that is

“clearly excessive in relation to the putative local benefits.” Because the ordinance failed the first

of these tests, it was unenforceable. Specifically, the “ordinance at issue here squelches

competition in the waste-processing service altogether, leaving no room for investment from

outside.”

Selected Bibliography

Associated Press, “Domestic Partner Rule Worries Business,” Cedar Falls—Waterloo Courier, Dec. 30,

1996, p. C5.

Associated Press, “Airline Competition Beneficial, Study Finds,” The Des Moines Register, February 15,

1990, p. 4A.

Associated Press, “What’s a Government to Do? Is That Thing Really a Pizza?” Des Moines Register,

Dec. 1, 1996, p. 5A.

“Banning Liquor Ads Futile Attempt to Protect Kids,” USA Today, Dec. 31, 1996, p. 8A.

Gary S. Becker, “The Results Are In: Overregulation Kills Growth,” Business Week, June 22, 1987, p. 24.

Brent Bowers, “FDA Regulatory Tide Swallows Up McCurdy Fish Co.,” Wall Street Journal, May 18, 1993,

p. B2.

John Carey, “Snap, Crackle, Stop – States Crack Down on Misleading Food Claims,” Business Week,

September 25, 1989, p. 42.

Jill Schachner Chanen, “Menu for Success,” ABA Journal, October 1998, p. 49.

Paul Stephen Dempsey, “The Disaster of Airline Deregulation,” The Wall Street Journal, May 9, 1991, p.

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Chapter 08 – Government Regulation of Business

A15.

Paul Stephen Dempsey, “Life Since Deregulation: It Means Paying Much More for Much Less,” The Des

Moines Register, December 30, 1987, p. 7A.

Paul Stephen Dempsey, “U.S. Airlines Are Ravaged by Deregulation,” Des Moines Register, December

26, 1990, p. 9A.

“Safety Labels for Cars?” Des Moines Register, July 5, 1996, p. 8A.

Jennifer Dukes, “Rules Cut Down on Number of Tanning Beds,” Waterloo Courier, June 10, 1992, p. C1.

Editorial, “Ads Target Teens; FDA Regulation of Tobacco Is Sorely Needed,” Columbus Dispatch, March 8,

2002, p. 12A.

Editorial, “The Assault on Deregulation,” The Wall Street Journal, January 2, 1990, p. A6.

Editorial, “The Games Drugmakers Play,” Des Moines Register, June 3, 2002, p. 4A.

John Emshwiller, “Don’t Tell Mort Diamond You Can’t Fight City Hall,” The Wall Street Journal, March 12,

1991, p. B2.

Amitai Etzioni, “Corporations on the Government Gravy Train,” Business and Society Review, Summer,

1987, p. 4.

Ellen J. Flannery, “Should It Be Easier or Harder to Use Unapproved Drugs and Devices?,” Hastings

Center Report, February, 1986, p.17.

Alexandra Harney, “Japan Split on Whether to Open Economy,” Financial Times Limited, July 12, 1999,

Asia-Pacific section, p. 6.

Philip J. Hilts, Protecting America’s Health: The FDA, Business, and One Hundred Years of Regulation

(Knopf; 2003).Iowa Dept. of Pub. Health, “Tanning Rules; Possible Hazards,” Waterloo Courier, April 14,

1991, pp. C1, C3.

Scott Kilman, “Why the Price of Milk Depends on Distance from Eau Claire, Wis.,” The Wall Street

Journal, May 20, 1991, p. A1.

Barbara Marsh and Timothy D. Schellhardt, “Turf Battle over Regulation of Franchises Intensifies,” The

Wall Street Journal, November 15, 1989, p. B2.

Rebecca Mowbray, “Small Business; Bureaucracy; Unraveling the Red Tape,” Houston Chronicle, March

21, 1999, Business Section, p. 4

Asra Q. Nomani, “One Sure Result of Airline Deregulation: Controversy About Its Impact on Fares,” The

Wall Street Journal, April 19, 1990, p. B1.

Bill Richards, “Deregulation Raises Prices, Cuts Services in Many Rural Areas,” The Wall Street Journal,

October 5, 1987, p. 1.

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Chapter 08 – Government Regulation of Business

Martin Shapiro, “A Golden Anniversary? The Administrative Procedures Act of 1946,” Regulation 19, no. 3

(1996).Stuart Taylor, Jr., “Court Disallows Taxes by 2 States on Business,” New York Times, June 24,

1987, p.27.

Neal Templin, “Auto Shoulder Belts for Rear Seats Came Too Late for Many,” The Wall Street Journal,

August 24, 1990, p. A1.

Bob Twig, “Village Council Approves Plan to Ban All Smoking Outdoors,” USA Today, Oct. 17, 1996, p.

3A.

Paul R. Verkuil, “Welcome to the Constantly Evolving Field of Administrative Law,” Administrative Law

Review 42, No. 1, (Winter 1990), p. 1.

Stephen Wermiel, “Battle Over States Rights is Still Being Waged 200 Years After the Signing of the

Constitution,” The Wall Street Journal, June 10, 1987, p. 52.

David Wessel, “States Enlarge Roles as Congress Is Unable to Solve Problems,” The Wall Street Journal,

June 28, 1988, p. 1.

Nicholas Wolfson, The Modern Corporation: Free Markets vs. Regulation (New York: Free Press, 1984).

S. David Young, The Rule of Experts: Occupational Licensing in America (Washington, D.C.: Cato

Institute, 1987).

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