The Historical and Constitutional Foundations. Chapter 1. BUSINESS LAW TODAY Essentials 9 th Ed. Roger LeRoy Miller - Institute for University Studies, Arlington, Texas Gaylord A. Jentz - University of Texas at Austin, Emeritus. Learning Objectives. - PowerPoint PPT Presentation
BUSINESS LAW TODAYBUSINESS LAW TODAY Essentials 9Essentials 9thth Ed. Ed.Roger LeRoy Miller - Institute for University Studies, Arlington, TexasRoger LeRoy Miller - Institute for University Studies, Arlington, TexasGaylord A. Jentz - University of Texas at Austin, EmeritusGaylord A. Jentz - University of Texas at Austin, Emeritus
Learning ObjectivesLearning Objectives What are the four primary sources of law in the What are the four primary sources of law in the
United States? United States? What is the common law tradition?What is the common law tradition? What constitutional clause gives the federal What constitutional clause gives the federal
government the power to regulate commercial government the power to regulate commercial activities among the various states?activities among the various states?
What constitutional clause allow slaws enacted What constitutional clause allow slaws enacted by the federal government to take priority over by the federal government to take priority over conflicting state laws?conflicting state laws?
What is the Bill of Rights? What freedoms are What is the Bill of Rights? What freedoms are guaranteed by the First Amendment?guaranteed by the First Amendment?
Knowledge of “black letter” law is not Knowledge of “black letter” law is not enough.enough.
Many different laws affect a single Many different laws affect a single business transaction.business transaction.
Ethics and business decision making.Ethics and business decision making.Ethics: what constitutes right or wrong behavior.Ethics: what constitutes right or wrong behavior.
Business Activities and Business Activities and the Legal Environmentthe Legal Environment
Sources of American LawSources of American Law Constitutional Law.Constitutional Law.
Found in text and cases arising from federal and Found in text and cases arising from federal and state constitutions.state constitutions.
U.S. Constitution is the supreme law of the land.U.S. Constitution is the supreme law of the land. Statutory Law.Statutory Law.
Laws enacted by federal and state legislatures.Laws enacted by federal and state legislatures.Local ordinances.Local ordinances.Uniform Laws (e.g.,Uniform Commercial Code).Uniform Laws (e.g.,Uniform Commercial Code).
Sources of American LawSources of American Law Administrative Law.Administrative Law.
Rulemaking--Rules, orders and decisions of Rulemaking--Rules, orders and decisions of administrative agencies, federal, state and local.administrative agencies, federal, state and local.
Administrative agencies can be independent Administrative agencies can be independent regulatory agency such as the Food and Drug regulatory agency such as the Food and Drug Administration.Administration.
Adjudication--agencies make rules, then Adjudication--agencies make rules, then investigate and enforce the rules in investigate and enforce the rules in administrative hearings.administrative hearings.
The Common Law TraditionThe Common Law Tradition Early English Courts of Law.Early English Courts of Law.
King’s courts started after Norman conquest of King’s courts started after Norman conquest of 1066.1066.
Established the common law—body of general Established the common law—body of general legal principles applied throughout the English legal principles applied throughout the English empire. empire.
King’s courts used King’s courts used precedentprecedent to build the to build the common law.common law.
Stare Decisis.Stare Decisis.Practice of deciding new cases based on Practice of deciding new cases based on
precedent.precedent.A higher court’s decision based on certain facts A higher court’s decision based on certain facts
and law, is a and law, is a binding authoritybinding authority on lower courts. on lower courts.Helps courts stay efficient.Helps courts stay efficient.
Remedy: means to enforce a right or Remedy: means to enforce a right or compensate for injury to that right.compensate for injury to that right.
Remedy at LawRemedy at Law: in king’s courts, remedies : in king’s courts, remedies were restricted to damages in either money were restricted to damages in either money or property.or property.
Equitable RemedyEquitable Remedy: based on justice and fair : based on justice and fair dealing a chancery court does what is right: dealing a chancery court does what is right: specific performance, injunction, rescission.specific performance, injunction, rescission.
Plaintiffs (injured party initiating the lawsuit), Plaintiffs (injured party initiating the lawsuit), Defendants (allegedly caused injury).Defendants (allegedly caused injury).
Equitable Remedies and Courts Equitable Remedies and Courts of Equityof Equity
Classifications of LawClassifications of Law Substantive vs. Procedural Law.Substantive vs. Procedural Law.
Substantive: laws that define and regulate rights Substantive: laws that define and regulate rights and duties.and duties.
Procedural: laws that establish methods for Procedural: laws that establish methods for enforcing and protecting rights.enforcing and protecting rights.
Civil Law and Criminal Law.Civil Law and Criminal Law.Civil: private rights and duties between persons Civil: private rights and duties between persons
and government.and government.Criminal: public wrongs against society.Criminal: public wrongs against society.
Classifications of LawClassifications of Law National and International Law.National and International Law.
National: laws of a particular nation.National: laws of a particular nation.Civil vs. Common Law: Civil law countries Civil vs. Common Law: Civil law countries
based on Roman code (e.g., Latin America).based on Roman code (e.g., Latin America).International: body of written and unwritten laws International: body of written and unwritten laws
observed by nations when dealing with each observed by nations when dealing with each other. other.
A Federal Form of Government: the A Federal Form of Government: the federal constitution was a political federal constitution was a political compromise between advocates of state compromise between advocates of state sovereignty and central government.sovereignty and central government.
Separation of Powers: Executive, Separation of Powers: Executive, Legislative and Judicial. Provides Legislative and Judicial. Provides checks and balances.checks and balances.Legislative: enacts lawsLegislative: enacts lawsExecutive: enforces lawsExecutive: enforces lawsJudicial: declares laws/actions unconstitutional.Judicial: declares laws/actions unconstitutional.
Constitutional Powers of Constitutional Powers of GovernmentGovernment
U.S. Constitution gives Congress the U.S. Constitution gives Congress the power to power to ““regulate Commerce with foreign regulate Commerce with foreign Nations, and among the several States, and Nations, and among the several States, and with the Indian tribes.” with the Indian tribes.” (Art. 1 (Art. 1 § 8)§ 8)
Greatest impact on business than any Greatest impact on business than any other Constitutional provision.other Constitutional provision.
Gibbons v. OgdenGibbons v. Ogden (1824). (1824).To Chief Justice Marshall, commerce meant all To Chief Justice Marshall, commerce meant all
business dealings that business dealings that substantially affectedsubstantially affected more than one state.more than one state.
The national government had the exclusive The national government had the exclusive power to regulate interstate commerce.power to regulate interstate commerce.
Today: commerce clause applies to e-Today: commerce clause applies to e-commerce internet transactions.commerce internet transactions.
Wickard v. FilburnWickard v. Filburn (1942). (1942). Purely local production, sale and consumption Purely local production, sale and consumption
of wheat was subject to federal regulation.of wheat was subject to federal regulation. CLASSIC CASE 1.1CLASSIC CASE 1.1 Heart of Atlanta Heart of Atlanta
Motel v. U.S.Motel v. U.S. (1964). (1964). Motel that provided Motel that provided public accommodations to guests from other public accommodations to guests from other states was subject to federal civil rights legislation.states was subject to federal civil rights legislation.
Expansion of National PowersExpansion of National Powers
TheoreticallyTheoretically: : the federal government has the federal government has unlimited control over all business unlimited control over all business transactions since any enterprise (in the transactions since any enterprise (in the aggregate) can have a “substantial effect” aggregate) can have a “substantial effect” on interstate commerce.on interstate commerce.
Practical LimitsPractical Limits: : Supreme Court has Supreme Court has curbed federal regulatory powers in curbed federal regulatory powers in U.S. v. U.S. v. LopezLopez (1995) and (1995) and U.S. v. MorrisonU.S. v. Morrison (2000). (2000).
Tenth Amendment Tenth Amendment reserves all powers to reserves all powers to the states that have not been expressly the states that have not been expressly delegated to the national government. delegated to the national government.
State have inherent “police powers.” State have inherent “police powers.” Police powers include right to regulate health, Police powers include right to regulate health,
safety, morals and general welfare.safety, morals and general welfare.Includes licensing, building codes, parking Includes licensing, building codes, parking
regulations and zoning restrictions.regulations and zoning restrictions. ““Dormant” Commerce Clause Dormant” Commerce Clause
Regulatory Powers of the Regulatory Powers of the StatesStates
U.S. Supreme Court has interpreted U.S. Supreme Court has interpreted commerce clause to give national commerce clause to give national government government exclusiveexclusive power to regulate. power to regulate.
States only have a “dormant” (negative) States only have a “dormant” (negative) power to regulate interstate commerce.power to regulate interstate commerce.
Dormant power comes into play when Dormant power comes into play when courts balance state’s interest vs. national courts balance state’s interest vs. national interest, interest, e.g.,e.g., internet transactions. internet transactions.
Supremacy Clause: Supremacy Clause: Article VI of the Article VI of the Constitution provides that Constitution, Constitution provides that Constitution, laws and treaties of the United States are laws and treaties of the United States are the “supreme law of the land.”the “supreme law of the land.”
Concurrent: Concurrent: in few areas, both states in few areas, both states and federal government share powers.and federal government share powers.
Preemption: Preemption: when Congress chooses to when Congress chooses to act in a concurrent area, federal law act in a concurrent area, federal law preempts state law.preempts state law.
1791: 1791: Ten written guarantees of protection Ten written guarantees of protection of individual liberties from government of individual liberties from government interference.interference.
Originally: Originally: Bill of Rights only applied to the Bill of Rights only applied to the federal government.federal government.
Today: Today: the Bill of Rights has been the Bill of Rights has been “incorporated” and applied to the States as “incorporated” and applied to the States as well.well.
Some protections apply to businesses.Some protections apply to businesses.
Business and the Bill of RightsBusiness and the Bill of Rights
Right to Free Speech Right to Free Speech is the basis for our is the basis for our democratic government.democratic government.
Symbolic Speech: includes gestures, Symbolic Speech: includes gestures, movements, articles of clothing. movements, articles of clothing. Texas v. JohnsonTexas v. Johnson (U.S. 1989). (U.S. 1989).Hodgkins v. PetersonHodgkins v. Peterson (7 (7thth Cir. 2004). Cir. 2004).
Reasonable Restrictions: balance Reasonable Restrictions: balance government’s obligation to protect government’s obligation to protect community vs. individuals right to speech.community vs. individuals right to speech.
First Amendment: Freedom of First Amendment: Freedom of SpeechSpeech
Corporate Political SpeechCorporate Political Speech Corporations also have protected Corporations also have protected
political speechpolitical speech (although not to the (although not to the degree of a natural person).degree of a natural person).
Supreme Court struck down campaign-Supreme Court struck down campaign-reform finance laws as unconstitutional reform finance laws as unconstitutional burden on corporate speech (FEC v. burden on corporate speech (FEC v. Wisconsin Right to Life).Wisconsin Right to Life).
Commercial speech is given substantial Commercial speech is given substantial protection. Generally, government restrictions protection. Generally, government restrictions must:must:Seek to implement substantial government interest,Seek to implement substantial government interest,Directly advance that interest, andDirectly advance that interest, andMust go no further than necessary to accomplish.Must go no further than necessary to accomplish.
CASE 1.2CASE 1.2 Bad Frog Brewery, Inc. v. N.Y. State Bad Frog Brewery, Inc. v. N.Y. State Liquor AuthorityLiquor Authority (1998). (1998). Denial of label on beer Denial of label on beer lacked a “reasonable fit” with state’s interest in lacked a “reasonable fit” with state’s interest in shielding minors from vulgarity, and was therefore shielding minors from vulgarity, and was therefore unconstitutional.unconstitutional.
U.S. Supreme Court has held that certain U.S. Supreme Court has held that certain speech is NOT protected:speech is NOT protected:Defamatory speech.Defamatory speech.Threatening speech that violates criminal laws.Threatening speech that violates criminal laws.Fighting Words.Fighting Words.Obscene SpeechObscene Speech is patently offensive, violates is patently offensive, violates
community standards and has no literary, community standards and has no literary, artistic, political or scientific merit.artistic, political or scientific merit.
Protected or Unprotected?Protected or Unprotected?Some of Congress’ attempts to protect children Some of Congress’ attempts to protect children
from online pornography have been ruled from online pornography have been ruled unconstitutional restriction on free speech.unconstitutional restriction on free speech.• Communications Decency Act (1996).Communications Decency Act (1996).• COPA (1998-challenged, in court).COPA (1998-challenged, in court).• Children’s Internet Protection Act (2000) which Children’s Internet Protection Act (2000) which
requires filters for computers in public libraries and requires filters for computers in public libraries and public schools). Challenged, in court.public schools). Challenged, in court.
What about “hate” speech on the web?What about “hate” speech on the web?
First Amendment First Amendment guarantees that “Congress guarantees that “Congress shall make no law respecting an shall make no law respecting an establishmentestablishment of of religion, or prohibiting the religion, or prohibiting the free exercisefree exercise thereof…” thereof…”
Establishment clause: Establishment clause: no state-sponsored no state-sponsored religion or preference for one religion over religion or preference for one religion over another.another.
CASE 1.3CASE 1.3 In re Episcopal Church CasesIn re Episcopal Church Cases (2009).(2009). Secular court Secular court cancan resolve a church property resolve a church property dispute without “establishing” a church in violation of dispute without “establishing” a church in violation of the First Amendment.the First Amendment.
Free Exercise: Free Exercise: person can believe what he person can believe what he wants, but actions may be unconstitutional.wants, but actions may be unconstitutional.
What about freedom of religion and What about freedom of religion and illegal drug use? illegal drug use?
Within the Muslim faith, is it a religious Within the Muslim faith, is it a religious violation for a woman to appear in violation for a woman to appear in public without a scarf (hijab) over her public without a scarf (hijab) over her head?head?
Procedural: Procedural: any government decision to any government decision to take life, liberty or property must be fair. take life, liberty or property must be fair. Requires: Notice and Fair Hearing.Requires: Notice and Fair Hearing.
Substantive:Substantive: focuses on the content or the focuses on the content or the legislation (the right itself).legislation (the right itself).FundamentalFundamental Right: requires compelling state Right: requires compelling state
interest.interest.Non-FundamentalNon-Fundamental: rational relationship to state : rational relationship to state
1414thth Amendment: Amendment: A state may not “deny to any A state may not “deny to any person within its jurisdiction the equal protection of person within its jurisdiction the equal protection of the laws.”the laws.”
Government must treat similarly situated Government must treat similarly situated individuals (or businesses) in the same individuals (or businesses) in the same manner. manner.
Courts apply different tests:Courts apply different tests:Minimum scrutiny-economic rights.Minimum scrutiny-economic rights.Intermediate scrutiny.Intermediate scrutiny.Strict Scrutiny – fundamental rights.Strict Scrutiny – fundamental rights.
Reading & Understanding Case LawReading & Understanding Case LawLegal cases are identified by a “legal citation” (or Legal cases are identified by a “legal citation” (or a “cite”) as the example below:a “cite”) as the example below:
Doe v. AOL, LLC,Doe v. AOL, LLC, 552 F.3d 1077 (9552 F.3d 1077 (9thth Cir. 2009). Cir. 2009).
Title: First Party is Plaintiff, second party is Defendant. The parties are either
Reading & Understanding Case LawReading & Understanding Case LawLegal cases are identified by a “legal citation” (or Legal cases are identified by a “legal citation” (or a “cite”) as the example below:a “cite”) as the example below:
Doe v. AOL, LLC,Doe v. AOL, LLC, 552 F.3d 1077552 F.3d 1077 (9 (9thth Cir. 2009). Cir. 2009).
Case is found in Federal 3rd Reporter, volume 552, page 1077.
Reading & Understanding Case LawReading & Understanding Case LawLegal cases are identified by a “legal citation” (or Legal cases are identified by a “legal citation” (or a “cite”) as the example below:a “cite”) as the example below:
Doe v. AOL, LLC,Doe v. AOL, LLC, 552 F.3d 1077 552 F.3d 1077 (9(9thth Cir. 2009). Cir. 2009).
Case was decided by the Ninth Circuit Court of Appeals, in 2009.
