978-0134004006 Chapter 4 Lecture Note Part 1

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Constitutional Law for Business and E-Commerce
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I. Teacher to Teacher Dialogue
survey course.
Because of these time limitations, teaching efforts might best be concentrated on two main
objectives:
often-competing sovereigns of federal and state government.
2. The enumeration of key individual civil liberties protections listed in the Bill of Rights
with an extrapolation of those same theories to business.
The most impressive fact that surfaces in the study of the Constitution is that the Constitution
itself, but through rare Amendments, never changes itself but its interpretation is always in
II. Chapter Objectives
1. Describe the concept of federalism and the doctrine of separation of powers.
2. Define and apply the Supremacy Clause of the US Constitution.
foreign commerce.
5. Explain the doctrines of equal protection and due process.
CONSTITUTIONAL LAW FOR
BUSINESS AND E-COMMERCE
4
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Chapter 4
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III. Key Question Checklist
Is this business activity one that is specifically addressed in the U.S. Constitution?
What general direction of control may be taken by the appropriate government entity?
Are there checks and balances or power sharing?
What are a business’s courses of action if it chooses to resist the governmental action
taken against it?
Do any constitutional rights apply?
IV. Text Materials
The key objective of this chapter is to introduce students to the role of the U.S. Constitution and
its pivotal role in the ultimate distribution of powers between the federal government and the
Constitution of the United States of America
In 1778, the Continental Congress formed a federal government, adopting the Articles of
Confederation. The Constitutional Convention in 1787 agreed to a U.S. Constitution, which was
Federalism and Delegated Powers The U.S. operates in federalism, which means power is
Doctrine of Separation of Powers Articles 1, 2, and 3 establish the legislative, executive, and
Checks and Balances A system of checks and balances are built into the Constitution,
Supremacy Clause
The Supremacy Clause establishes that the federal Constitution, treaties, laws, and regulations are
the supreme law in the U.S., and take precedence over state and local law. This concept of federal
Congress can expressly provide that federal statutes will exclusively regulate an activity or area,
Case 4.1 Supremacy Clause: Mutual Pharmaceutical Company, Inc. v. Bartlett
133 S.Ct. 2466, 2013 U.S. Lexis 4702 (2013), Supreme Court of the United States
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Constitutional Law for Business and E-Commerce
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regarding state standards for drug labeling.
Critical Legal Thinking Without the Supremacy Clause, the union of states would be far weaker
and it would be difficult in today’s world for the United States to conduct business on an
Commerce Clause
that affect interstate commerce.
Native Americans Many tribes of the indigenous people of the United States entered into
treaties with the federal government, often under great pressure. They usually relinquished their
claim on the native land and were relocated to reservations. Most of the treaties were eventually
dependent.
Indian Gaming Regulatory Act This Act authorized the individual tribes to operate gaming
facilities.
with foreign nations.
Direct and indirect regulation of foreign commerce by state or local federal governments that
discriminates against foreign commerce is a violation of the Foreign Commerce Clause and is
therefore illegal.
commerce.
Landmark U.S. Supreme Court Case: Heart of Atlanta Motel V. United States
The Heart of Atlanta motel solicited clients from outside the state through various forms of
media. It refused to rent to blacks, even after the passage of the Civil Rights Act of 1964. The
power to regulate commerce “among the several states,” i.e., interstate commerce. Originally, the
Supreme Court interpreted the Commerce Clause to mean that the federal government could only
regulate commerce that moved in interstate commerce. The modern rule, however, allows the
federal government to regulate activities that affect interstate commerce.
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Chapter 4
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State and Police Power The states have the right to regulate commerce within their borders,
under the authority of the states’ police power. They also have the right to enact laws that
promote public health, safety, morals, and general welfare, provided that they do not unduly
burden interstate commerce.
interstate commerce.
E-Commerce and the Constitution
The Internet and other computer networks permit parties to obtain website domain names and
Digital Law: E-Commerce and the Commerce Clause
Michigan law prohibits out-of-state wineries from selling directly to customers through any
medium, instead requiring them to sell to Michigan wholesalers, which will handle the instate
distribution of the products.
violated the Commerce Clause.
Critical Legal Thinking The law has kept up with every change in American society to date. I
think it will be able to keep pace with e-commerce. Other issues, such as human cloning for
example, might be tougher to address in the future. The principles of the Constitution are
Bill of Rights and Other Amendments to the U.S. Constitution
The Bill of Rights consists of ten Amendments to the Constitution ratified in 1791, which limit
actions of the federal government. There have been seventeen other Amendments since then.
governments.
Freedom of Speech
The First Amendment protects only speech, not conduct.
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Constitutional Law for Business and E-Commerce
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Case 4.2 Free Speech and Violent Video Games: Brown, Governor of California v.
Entertainment Merchants Association
131 S.Ct 2729, 2011 US Lexis 4802 (2011), Supreme Court of the United States
Facts: The state of California enacted a state statute (“Act”) that prohibits the sale or rental of
Constitution.
Reason: California has singled out the purveyors of video games for disfavored treatmentat
least when compared to booksellers, cartoonists, and movie producersand has given no
persuasive reason why.
Limited Protected Speech Speech which the government cannot prohibit, but can regulate as
to time and place, including offensive and commercial speech.
4.3 Free Speech: McCullen v. Coakley, Attorney General of Massachusetts
134 S.Ct. 2518, 2014 U.S. Lexis 4999 (2014), Supreme Court of the United States
Massachusetts, in an effort to protect abortion clinics and those seeking abortions, attempted to
create a barrier through statute between protesters and right to lifers and those attempting to enter
Critical Legal Thinking The public safety and the rights of the many must be balanced against
the individual’s freedom of speech. The harm which may occur from certain speech is so far
greater than the right to very isolated and certain limitations on freedom of speech, that the
words and speech.
Case 4.4 Free Speech: Snyder v. Phelps
131 S.Ct. 1207, 2011 US Lexis 1903 (2011), Supreme Court of the United States
Facts: Snyder filed a lawsuit against Phelps, Phelps’s daughters, and the Westboro Baptist
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Chapter 4
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Supreme Court.
Issue: Does the Free Speech Clause of the First Amendment shield church members from tort
liability for their funeral picketing speech?
Decision: The U.S. Supreme Court held that the First Amendment protected Westboro’s speech
in this case. The U.S. Supreme Court held that Mr. Snyder could not recover tort damages for the
Amendment.
Ethics Questions: Public streets have been referred to as the archetype of a traditional public
forum, noting that “time out of mind” public streets and sidewalks have been used for public
assembly and debate. People have the right to be where they wish to be. Even then, public and
private concerns are not really the right way to determine whether the First Amendment shields
that occurred in this case.
Freedom of Religion
The U.S. Constitution requires religious neutrality by the government. The First Amendment
respectively.
Case 4.5 Freedom of Religion: Burwell v. Hobby Lobby Stores, Inc.
134 S.Ct. 2751, 2014 U.S. Lexis 4505 (2014), Supreme Court of the United States
Facts: Hobby Lobby is a privately held business owned by Christians with 13,000 employees.
the company.
Issue: Does the owner of a privately held corporate have to provide Obamacare coverage,
including contraception to its employees in light of the owners’ sincerely held religious beliefs?
Decision: No, this business does not have to provide such care since it conflicts with religious
beliefs.
The Equal Protection Clause
The Fourteenth Amendment, passed in 1868, prohibits discriminatory or unfair action by the
government.

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