What are the four primary sources of law in the
United States? What is the common law tradition? What constitutional clause gives the federal government the power to regulate commercial activities among the various states? What constitutional clause allow slaws enacted by the federal government to take priority over conflicting state laws? What is the Bill of Rights? What freedoms are guaranteed by the First Amendment?
Business Activities and the Legal Environment Knowledge of “black letter” law is not enough. Many different laws affect a single business transaction. Ethics and business decision making. Ethics: what constitutes right or wrong behavior.
Sources of American Law Administrative Law. Rulemaking--Rules, orders and decisions of administrative agencies, federal, state and local. Administrative agencies can be independent regulatory agency such as the Food and Drug Administration. Adjudication--agencies make rules, then investigate and enforce the rules in administrative hearings.
The Common Law Tradition Early English Courts of Law. King’s courts started after Norman conquest of 1066. Established the common law—body of general legal principles applied throughout the English empire. King’s courts used precedent to build the common law.
Stare Decisis Stare Decisis. Practice of deciding new cases based on precedent. A higher court’s decision based on certain facts and law, is a binding authority on lower courts. Helps courts stay efficient.
Equitable Remedies and Courts of Equity Remedy: means to enforce a right or
compensate for injury to that right. Remedy at Law: in king’s courts, remedies were restricted to damages in either money or property. Equitable Remedy: based on justice and fair dealing a chancery court does what is right: specific performance, injunction, rescission. Plaintiffs (injured party initiating the lawsuit), Defendants (allegedly caused injury).
Classifications of Law National and International Law. National: laws of a particular nation. Civil vs. Common Law: Civil law countries based on Roman code (e.g., Latin America). International: body of written and unwritten laws observed by nations when dealing with each other.
U.S. Constitution gives Congress the power to “regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes.” (Art. 1 § 8) Greatest impact on business than any other Constitutional provision.
The Commerce Clause Gibbons v. Ogden (1824). To Chief Justice Marshall, commerce meant all business dealings that substantially affected more than one state. The national government had the exclusive power to regulate interstate commerce.
commerce clause applies to ecommerce internet transactions.
Commerce Power Today Theoretically: the federal government has unlimited control over all business transactions since any enterprise (in the aggregate) can have a “substantial effect” on interstate commerce. Practical Limits: Supreme Court has curbed federal regulatory powers in U.S. v. Lopez (1995) and U.S. v. Morrison (2000).
Regulatory Powers of the States Tenth Amendment reserves all powers to the states that have not been expressly delegated to the national government. State have inherent “police powers.” Police powers include right to regulate health, safety, morals and general welfare. Includes licensing, building codes, parking regulations and zoning restrictions.
Dormant Commerce Clause U.S. Supreme Court has interpreted
commerce clause to give national government exclusive power to regulate. States only have a “dormant” (negative) power to regulate interstate commerce. Dormant power comes into play when courts balance state’s interest vs. national interest, e.g., internet transactions.
1791: Ten written guarantees of protection of individual liberties from government interference. Originally: Bill of Rights only applied to the federal government. Today: the Bill of Rights has been “incorporated” and applied to the States as well. Some protections apply to businesses.
First Amendment: Freedom of Speech Right to Free Speech is the basis for our democratic government. Symbolic Speech: includes gestures, movements, articles of clothing. Texas v. Johnson (U.S. 1989). Hodgkins v. Peterson (7th Cir. 2004).
Corporate Political Speech Corporations also have protected political speech (although not to the degree of a natural person). Supreme Court struck down campaignreform finance laws as unconstitutional burden on corporate speech (FEC v. Wisconsin Right to Life).
Commercial Speech Commercial speech is given substantial protection. Generally, government restrictions must: Seek to implement substantial government interest, Directly advance that interest, and Must go no further than necessary to accomplish.
Bad Frog Brewery, Inc. v. N.Y. State Liquor Authority (1998). Denial of label on beer lacked a “reasonable fit” with state’s interest in shielding minors from vulgarity, and was therefore unconstitutional.
Unprotected Speech U.S. Supreme Court has held that certain speech is NOT protected: Defamatory speech. Threatening speech that violates criminal laws. Fighting Words. Obscene Speech is patently offensive, violates community standards and has no literary, artistic, political or scientific merit.
Online Obscenity Protected or Unprotected? Some of Congress’ attempts to protect children from online pornography have been ruled unconstitutional restriction on free speech. • • •
Communications Decency Act (1996). COPA (1998-challenged, in court). Children’s Internet Protection Act (2000) which requires filters for computers in public libraries and public schools). Challenged, in court.