Constitutional Authority to Regulate Business Article III – Judicial Power, p. 12
The Constitutional Powers of Government • Constitution limits federal power • Tenth Amendment, p. 23 • Federalism – states and federal government share sovereignty • Federal powers enumerated – all other powers left to the states or the people
Can you think of any businesses in today’s economy that are purely local in charter? Anything the federal government cannot regulate? The Commerce Clause“[t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” Article 1 Section 8, p. 6 The breadth of the commerce clause: • Gibbons v. Ogden (1824) – ferry between NY and NJ “substantially affected commerce” • Wickard. V. Filburn (farmer) (1942) – farmer growing wheat for own use • CASE 4.1Heart of Atlanta Motel v. United States (1964). Local hotel that had 75% out-of-state guests • United States v. Lopez (1995). School gun free zone law. Lopez, a 12th grade student, carried a gun into the school and charged with a federal law. Lopez moved to dismiss based on the law being unconstitutional. 5-4 decision. “Substantially affect or substantially relate to interstate commerce.” • Health Reform – Commerce? Huge part of economy – but is doing nothing (i.e. not buying insurance) commerce? • Circuit Courts Split on Constitutionality of Health Reform • 9/8/11 4th Cir Ruling – No standing because state brought suit and mandate to buy insurance is an “individual” mandate. • 6th Cir – Constitutional • 11th Cir – Unconstitutional • 5 ½ hours of oral arguments. 2 hours for interstate commerce clause • 1 hour for whether pinning federal funding to state participation violates basic federalism.
End-of-Chapter Q: 4-3, p.129 Georgia law to require contoured rear fender mud guards. The Supremacy ClauseArticle 6, p. 15 • The U.S. Constitution provides that the Constitution, laws, and treaties of the United States are “the supreme law of the land.” • Whenever a state law directly conflicts with a federal law, the state law is rendered invalid. • Preemption occurs when Congress chooses to act exclusively in a concurrent area.
Business and the Bill of Rights Freedoms guaranteed by the Bill of Rights included the following: Freedom of Speech Freedom of Religion Freedom from Compelled Self-Incrimination Freedom from Unreasonable Searches and Seizures
Freedom of Speech • Law Struck Down • Unconstitutional Aug 2012 • Can you require a manufacturer to go beyond factual information? Can Government Force Tobacco Companies To Add Graphic Warnings? • Requirements of New Law • Companies must rotate between 9 images • Must be printed on top half – front and back • Must constitute 20% of any advertising • Companies will have to spend 10s of millions of dollars to comply
End-of-Chapter Q: 4-1, p. 129 Can a law ban political ads on utility posts and lampposts? Freedom of Speech • Political speech – Reasonable restrictions • Corporate political speech (campaign finance laws). • Commercial speech (advertising) • Lower standard • false or misleading advertising • Central Hudson Test • Substantial Government interest • Law directly advances that interest • Law goes no further than necessary • CASE 4.2 Bad Frog Brewery, Inc. v. New York State Liquor Authority (1998).
End-of-Chapter Question 4-10, p. 131 Lemen complains about guests at a hotel across the street whom she calls “drunks,” “whores,” “Satan,” “Satan’s Wife,” “Prostitution is going on inside,” and “involved in child pornography” Is she protected by free speech?