Constitutional Authority to Regulate Business 1787 US Constitution creates federal form of government Delegated powers Partnership w/exceptions 3 Branches = Checks and balances

Constitutional Authority to Regulate Business The Commerce Clause –Art. I Sect. 8 –Gibbons v. Ogden Broad Interpretation –US v. Lopez only limiting case Regulatory Powers of States –Police powers- protect or promote the public order, health, safety, morals, general welfare –Presumed valid when conflict occurs –Raymond Motor & Oregon Waste Systems

Constitutional Authority to Regulate Business The Supremacy Clause –Art. VI and Preemption –Pervasive, comprehensive, detailed Taxing and Spending Powers –Art. I Sec. 8 –Reasonable relationship test to sustain tax –Policy choices

Constitutional Authority to Regulate Business Business and the Bill of Rights –Adopted in 1791 –Legal person status –Supremes interpret (so Vote!)

Constitutional Authority to Regulate Business First Amendment –Freedom of Speech Political speech, symbolic speech McIntyre v. Ohio Elections Commission –Commercial Speech Valid if it seeks to implement a substantial government interest, directly advances that interest, and goes no further than necessary to accomplish its objective Rubin v. Coors

Constitutional Authority to Regulate Business First Amendment –Corporate Political Speech First National Bank of Boston v. Bellotti –Unprotected Speech Defamatory speech Threatening speech Pornography Fighting words Obscene speech Robinson v. Jacksonville Shipyards

Constitutional Authority to Regulate Business First Amendment –Freedom of religion Separation of church and state/Establishment Clause –No state sponsored religions –No endorsement or preference –Secular purpose of rest days? –Accommodate all, hostility toward none Free exercise of religion –Compelling state interest test

Constitutional Authority to Regulate Business Fourth Amendment –The right of the people to be secure in their persons, houses, papers and effects. Search warrants based on reasonable grounds/probable cause must be obtained from neutral third party Requires a particular description Exceptions: highly regulated businesses

Constitutional Authority to Regulate Business Fifth Amendment –No person shall be compelled in any criminal case to be a witness against himself –Does not apply to corporations or partnerships

Constitutional Authority to Regulate Business Other Constitutional Protections –The Privileges and Immunities Clause Art.IV Sec. 2 Discrimination against nonresidents must pass substantial relationship test Fourteenth Amendment protects against state, rather than federal government

Constitutional Authority to Regulate Business Other Constitutional Protections –The Full Faith and Credit Clause Art. IV Sec 1 Legal rights established in one state are honored in every other state Deeds, contracts, wills, judicial decisions Not stare decisis or binding precedent

Constitutional Authority to Regulate Business Other Constitutional Protections –Due Process 5 th and 14 th Amendments Procedural Due Process –Neutral decision maker –Notice and a hearing

Constitutional Authority to Regulate Business Other Constitutional Protections –Due Process 5 th and 14 th Amendments Substantive Due Process –If legislation affects a fundamental right it must be justified by a compelling or overriding state interest when challenged in court – a very difficult swtandard –Voting, speech, privacy –Speed limits –Rational basis test

Constitutional Authority to Regulate Business Other Constitutional Protections –Equal Protection 14 th and 5 th Amendment –It is legal to treat some people differently than others, however, the government’s reason for the grouping the people differently – into different classifications – must pass Strict scrutiny or Intermediate scrutiny or The rational basis test

Constitutional Authority to Regulate Business Other Constitutional Protections –Equal Protection Strict Scrutiny –Generally, government loses its argument that grouping people into these categories promotes a compelling state interest –Race, national origin, citizen or alien

Constitutional Authority to Regulate Business Other Constitutional Protections –Equal Protection Intermediate Scrutiny –Grouping must be substantially related to important government objectives Gender, illegitimacy

Constitutional Authority to Regulate Business Other Constitutional Protections –Equal Protection The Rational Basis Test –Government generally wins because grouping only has to have a reasonable relationship to any legitimate government objective Red hair, height

Constitutional Authority to Regulate Business Other Constitutional Protections –Right to Privacy No such thing in the U.S. Constitution –Made it up from the 1 st, 3 rd, 4 th 5 th and 9 th Amendments Tort under state law Abortion, birth control, gay/lesbian relationships, assisted suicide

Constitutional Authority to Regulate Business Constitutional Law in Cyberspace –Regulating online obscenity 1 st Amendment issues Communications Decency Act No patently offensive “speech” to minors Community Standards usually govern ACLU v. Reno

Constitutional Authority to Regulate Business Cyberspace –Cryptography and the Constitution Encrypted data and Crim law –4 th amendment Search and seizure questions –5 th amendment questions Encryption Source Codes and Free Speech –Bernstein v. U.S. Department of State –ITAR

Constitutional Authority to Regulate Business Cyberspace –Free Speech and Unwanted Electronic Mail Governments can restrict the time, place or manner of distribution of materials –However, the legislation must be Content neutral Narrowly tailored Leave open alternative channels of communications –Your address?