Constitutional Authority to Regulate Business

Article III – Judicial Power, p. 12

2

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

3

The Supremacy ClauseArticle 6, p. 15

Supreme Law. The U.S. Constitution provides that the Constitution, laws, and treaties of the United States are “the supreme law of the land.”

Invalidates State Law. 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.

End-of-Chapter Q: 5-1, p.119Georgia law to require contoured rear fender mud guards.

4

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–Heart 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? No, ruled the Supreme Court.

Can you think of any businesses in today’s economy that are purely local in charter? Anything the federal government cannot regulate?

Taxing and Spending Powers Article 1, Section 8

The Taxing and Spending Powers. Used to be that the federal government could not tax without a basis, now taxing is seen as a basis to do more.

“Dormant” Commerce Clause

Massachusetts Law for Small Wineries allows direct shipment of wines.

Favors In-State. All in-state wineries are small. Many out-of-state are not.

2015 California Egg Law California voters approved the Prevention of Cruelty to Farm Animals Act, which provided that after January 1, 2015 a “person shall not tether or confine any covered animal, on a farm, for all or the majority of any day, in a manner that prevents such animal from: (a) Lying down, standing up, and fully extending his or her limbs; and (b) Turning around freely.” In part, this measure was intended to free laying hens from the claustrophobia of so-called battery cages, where the hen is confined to a space, shared with several other hens, that permits each hen no more 67 square inches. 

7

Freedoms guaranteed by the Bill of Rights included the following:

Freedom of SpeechAmendment I, p. 21

Freedom from Compelled Self-Incrimination

Freedom from Unreasonable Searches and Seizures

Freedom of Religion

Business and the Bill of Rights

8

Freedom of Speech

Political speech – Reasonable restrictions Citizens United. Hillary – the Movie. 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 Q: 5-10, p. 120Can NYC ban broad tipped markers to reduce graffiti?

9

Freedom of Speech

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

Law Struck DownUnconstitutional Aug 2012

• Can you require a manufacturer to go beyond factual information?

Extra Slides

End-of-Chapter Question 5-9, p. 120Lemen 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?

Balboa Island Village Inn