25
CHAPTER 4
CONSTITUTIONAL AUTHORITY
TO REGULATE BUSINESS
ANSWER TO CRITICAL ANALYSIS
QUESTION IN THE FEATURE
INSIGHT INTO ETHICS—CRITICAL THINKING—INSIGHT INTO THE LEGAL ENVIRONMENT (PAGE 83)
Why should it be illegal to “pander” virtual child pornography when it is not illegal to possess it? This is a
question of social policy and political belief. Those who believe that the First Amendment protects all
speech might argue that neither the possession nor the pandering of pornography of any kind should be
restricted. The purpose for the prohibition of child pornography is the protection of children. Those who
believe that children should be as protected as possible from exposure to pornography of all kinds might
argue that possession should be as illegal as pandering. Between these extremes are the difficulties of
defining, perceiving, and weighing the competing interests of individuals, society, and government.
Currently, the balance has been struck at allowing possession—on the reasoning that the images are not
real—and banning pandering—with the goal of limiting distribution.
ANSWERS TO QUESTIONS
AT THE ENDS OF THE CASES
CASE 4.1—QUESTIONS (PAGE 78)
1A. The court held that the Massachusetts statute discriminated against out-of–state wineries “by
design” (intentionally). How can a court determine legislative intent? Courts often look to legislative
proceedings (transcriptions of meeting minutes, hearings, floor debates, and the like) to determine
legislative intent. In this case, for example, the court cited comments during floor debate made by
several Massachusetts legislators about the new winery-regulating law. One senator acknowledged that
26 UNIT ONE: THE LEGAL ENVIRONMENT OF BUSINESS
Shortly afterward, the draft of the law was amended to exempt nongrape fruit wine production from the
30,000 cap. The courts also can make an inference of discriminatory intent, or purpose, based on the
effects of the law. For example, in this case the court noted that Massachusetts’s definition of “small”
wineries as those producing less than 30,000 gallons of wine per year departed considerably from the
wine industry’s definition of “small” wineries. The wine industry defined “small” wineries as those
2A. Suppose that most “small” wineries, as defined by the 2006 Massachusetts law, existed out of
state. How could the law be discriminatory in that situation? This was one of Massachusetts’s
CASE 4.2—QUESTIONS (PAGE 82)
WHAT IF THE FACTS WERE DIFFERENT?
If Bad Frog had sought to use the offensive label to market toys instead of beer, would the court’s ruling
likely have been the same? Why or why not? Probably not. The reasoning underlying the court’s decision
in the case was, in part, that “the State’s prohibition of the labels . . . does not materially advance its
asserted interests in insulating children from vulgarity . . . and is not narrowly tailored to the interest
concerning children.” The court’s reasoning was supported in part by the fact that children cannot buy
beer. If the labels advertised toys, however, the court’s reasoning might have been different.
THE LEGAL ENVIRONMENT DIMENSION
Whose interests are advanced by the banning of certain types of advertising? The government’s
CASE 4.3—QUESTIONS (PAGE 85)
THE LEGAL ENVIRONMENT DIMENSION
Should the court have considered whether the Episcopal Church abandoned or departed from the tenets
of faith and practice that it held at the time of St, James’s affiliation? Why or why not? No. The First
CHAPTER 4: CONSTITUTIONAL AUTHORITY TO REGULATE BUSINESS 27
WHAT IF THE FACTS WERE DIFFERENT?
Suppose that before this property dispute was finally resolved, the church’s general convention had
been changed to declare that “all property is held in trust for the local churches.” Would the result in
this case have been different? Explain. The result most likely would have been different. As the court in
the Episcopal case explained, “under the neutral-principles approach, the outcome of a church property
dispute is not foreordained. At any time before the dispute erupts, the parties can ensure, if they so
ANSWERS TO QUESTIONS IN THE REVIEWING FEATURE
AT THE END OF THE CHAPTER
1A. Equal protection
When a law or action limits the liberty of some persons but not others, it may violate the equal
protection clause. Here, because the law applies only to motorcycle operators and passengers, it raises
equal protection issues.
2A. Levels
The three levels of scrutiny that courts apply to determine whether the law or action violates equal
protection are strict scrutiny (if fundamental rights are at stake), intermediate scrutiny (in cases
involving discrimination based on gender or legitimacy), and the rational basis test (in matters of
economic or social welfare).
3A. Standard
4A. Application
The statute is probably constitutional, because requiring helmets is rationally related to a legitimate
government objective (public health and safety). Under the rational basis test, courts rarely strike down
28 UNIT ONE: THE LEGAL ENVIRONMENT OF BUSINESS
ANSWER TO DEBATE THIS QUESTION IN THE REVIEWING FEATURE AT THE END OF THE
CHAPTER
Legislation aimed at “protecting people from themselves” concerns the individual as well as the
public in general. Protective helmet laws are just one example of such legislation. Should individuals be
allowed to engage in unsafe activities if they choose to do so? Certainly many will argue in favor of
individual rights. If certain people wish to engage in risky activities such as riding motorcycles without a
ANSWERS TO QUESTIONS AND CASE PROBLEMS
AT THE END OF THE CHAPTER
4-1A. Commerce clause
(Chapter 4—Pages 76–78)
A Georgia statute that requires the use of contoured rear-fender mudguards on trucks and trailers
4-2A. QUESTION WITH SAMPLE ANSWER: Freedom of religion
As the text points out, Thomas has a constitutionally protected right to his religion and the free exercise
of it. In denying his unemployment benefits, the state violated these rights. Employers are obligated to
make reasonable accommodations for their employees’ beliefs, right or wrong, that are openly and
4–3A Equal protection
(Chapter 4—Pages 87–88)
According to the standards applied to determine compliance with the equal protection clause, this
ordinance’s classification—a gender-based distinction—is subject to intermediate scrutiny. Under this
4-4A. Freedom of speech
(Chapter 4—Pages 81–82)
The court issued an injunction against Mishkoff’s use of the names. He appealed to the U.S. Court of
Appeals for the Sixth Circuit, which reversed the lower court’s order, holding that “ ’taubmansucks.com’
4-5A. CASE PROBLEM WITH SAMPLE ANSWER: Privacy
This case involves the privacy rights of an individual. As noted in the chapter, the U.S. Constitution
protects, by inference, individual privacy rights. In addition, both state and federal statutes, as well as
most state constitutions, protect privacy. Here, statutory law applies, and the relevant statute is the
Privacy Act of 1974. That act was designed to protect individuals against the disclosure of private
information collected about them by the government. The key, then, to answering this question lies in
the statutory language of the 1974 act, as quoted in the case problem. Essentially, you need to ask two
30 UNIT ONE: THE LEGAL ENVIRONMENT OF BUSINESS
questions. First, did the plaintiff (Doe) sustain any “actual damages”? Second, were the damages
sustained caused by the government’s “intentional and willful actions”? The answer to the first
4-6A. Supremacy clause
(Chapter 4—Pages 78–79)
In support of the plaintiff’s position in this case is the principle of preemption under the Constitution’s
supremacy clause. “Preemption occurs when Congress, in enacting a federal statute, expresses a clear
4-7A. Freedom of speech
(Chapter 4—Pages 81–82)
The court issued an injunction to prohibit the enforcement of the regulations at issue against young
adults between eighteen and twenty-one. The defendants appealed to the U.S. Court of Appeals for the
Second Circuit, which affirmed the lower court’s issuance of the injunction on the basis of the plaintiffs’
First Amendment claims. Applying an “intermediate level of scrutiny” to examine the regulations and
consider the propriety of the injunction, the appellate court explained that this meant the rules must
further “an important or substantial governmental interest,” which must be “unrelated to the sup–
4–8A Due process
(Chapter 4—Page 87)
To adequately claim a due process violation, a plaintiff must allege that he was deprived of “life, liberty,
or property” without due process of law. A faculty member’s academic reputation is a protected
4–9A. Commerce clause
(Chapter 4—Pages 75–76)
As the text notes, the Lopez case struck down the Gun-Free School Zones Act as unconstitutional
because the possession of guns near a school had nothing to do with interstate commerce. This was the
4-10A. A QUESTION OF ETHICS: Defamation
(a) The answers to these questions begin with the protection of the freedom of speech under
the First Amendment. The freedom to express an opinion is a fundamental aspect of liberty. But this
right and its protection are not absolute. Some statements are not protected because, as explained in
the Balboa decision, “they are no essential part of any exposition of ideas, and are of such slight social
under the Constitution because it was a “prior restraint”—an attempt to restrain Lemen’s speech before
she spoke. On further appeal, the California Supreme Court phrased “the precise question before us [to
be] whether an injunction prohibiting the repetition of statements found at trial to be defamatory
violates the First Amendment.” The court held it could enjoin the repetition of such statements without
infringing Lemen’s right to free speech. Quoting from a different case, the court reasoned, “The special
Under the former approach, a pre-established set of moral values founded on religious beliefs
can be taken as absolute with regard to behavior. Thus, if these values proscribed Lemen’s name-calling
as wrong, it would be construed as wrong, regardless of the truth of what she said or any effect that it
had. Similarly, if the values prescribed Lemen’s conduct as correct, it might be unethical not to engage in
it. A different duty-based approach grounded on philosophical, rather than religious, principles would
