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  • 1. BUSINESS LAW TODAY Essentials 8 th Ed. Roger LeRoy Miller - Institute for University Studies, Arlington, Texas Gaylord A. Jentz - University of Texas at Austin, Emeritus Chapter 1 The Historical and Constitutional Foundations
  • 2. Learning Objectives
    • What is the common law tradition?
    • What is a precedent? When might a court depart from precedent?
    • What is the difference between remedies at law and remedies in equity?
    • What constitutional clause gives the federal government the power to regulate commercial activities among the various states?
    • What is the Bill of Rights? What freedoms are guaranteed by the First Amendment?
  • 3. Sources of American Law
    • Constitutional Law.
      • Found in text and cases arising from federal and state constitutions.
      • U.S. Constitution is the supreme law of the land.
    • Statutory Law.
      • Laws enacted by federal and state legislatures.
      • Local ordinances.
      • Uniform Laws (e.g.,Uniform Commercial Code).
  • 4. 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.
  • 5. 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.
  • 6. 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.
  • 7. Equitable Remedies & Courts
    • 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).
  • 8. Exhibit 1-1
  • 9. Classifications of Law
    • Substantive vs. Procedural Law
      • Substantive: laws that define and regulate rights and duties.
      • Procedural: laws that establish methods for enforcing and protecting rights.
    • Civil Law and Criminal Law
      • Civil: private rights and duties between persons and government.
      • Criminal: public wrongs against society.
  • 10. 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.
  • 11. Comparision of Legal Systems
  • 12.
    • A Federal Form of Government: the federal constitution was a political compromise between advocates of state sovereignty and central government.
    • Separation of Powers: Executive, Legislative and Judicial. Provides checks and balances.
      • Legislative: enacts laws
      • Executive: enforces laws
      • Judicial: declares laws/actions unconstitutional.
    Constitutional Powers of Government
  • 13. The Commerce Clause
    • 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.
  • 14. 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.
    • Today: commerce clause applies to e-commerce internet transactions.
  • 15. Expansion of National Powers
    • Wickard v. Filburn (1942).
      • Purely local production, sale and consumption of wheat was subject to federal regulation.
    • CASE 2.1 Heart of Atlanta Motel v. U.S. (1964).
      • Motel that provided public accommo-dations to guests from other states was subject to federal civil rights legislation.
  • 16. 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).
  • 17. 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 
  • 18. 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.
    • CASE 2.2 Granholm v. Heald (2005).
  • 19. The Supremacy Clause
    • Supremacy Clause: Article VI of the Constitution provides that Constitution, laws and treaties of the United States are the “supreme law of the land.”
    • Concurrent: in few areas, both states and federal government share powers.
    • Preemption: when Congress chooses to act in a concurrent area, federal law preempts state law.
  • 20. Taxing and Spending Powers
    • Article I Section 8: Congress has the power to “lay and collect taxes, duties, imposts and excises.”
    • Today: if federal tax has a reasonable relationship to revenue production, it will be held constitutional.
    • Congress can spend tax revenues on any express or implied constitutional power.
  • 21. Business and the Bill of Rights
    • 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.
  • 22. First Amendment: Freedom of Speech
    • Right to Free Speech is the basis for our democratic government.
    • Free speech also includes “symbolic” speech, including gestures, movements, articles of clothing.
      • Texas v. Johnson (U.S. 1989).
      • Hodgkins v. Peterson (7 th Cir. 2004).
  • 23. Corporate Speech
    • Commercial speech (advertising) is given substantial protection. Government restrictions must:
      • Seek to implement substantial government interest,
      • Directly advance that interest, and
      • Must go no further than necessary to accomplish.
    • Corporations also have protected political speech (although not to the degree of a natural person).
  • 24. 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.
      • CASE 2.3 Lott v. Levitt (2007).
  • 25. Online (Obscene) Speech
    • 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.
      • What about “hate” speech on the web?
  • 26. Freedom of Religion
    • First Amendment guarantees that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof…”
    • Establishment clause: no state-sponsored religion or preference for one religion over another.
    • Free Exercise: person can believe what he wants, but actions may be unconstitutional.
    • What about freedom of religion and illegal drug use?
  • 27. Due Process
    • Procedural: any government decision to take life, liberty or property must be fair. Requires: Notice and Fair Hearing.
    • Substantive: focuses on the content or the legislation (the right itself).
      • Fundamental Right: requires compelling state interest.
      • Non-Fundamental : rational relationship to state interest.
  • 28. Equal Protection
    • 14 th Amendment: A state may not “deny to any person within its jurisdiction the equal protection of the laws.”
    • Government must treat similarly situated individuals (or businesses) in the same manner.
    • Courts apply different tests:
      • Minimum scrutiny-economic rights.
      • Intermediate scrutiny.
      • Strict Scrutiny – fundamental rights.
  • 29. Privacy Rights
    • Fourth amendment protects against unreasonable search and seizures.
    • Griswold v. Connecticut (1965) found a right to personal privacy implied in constitution, expanded in Roe v. Wade (1973).
    • Website privacy policies. What about private information on the internet?
    • What about USA PATRIOT ACT (2001)?
    • HIPAA (1996) (healthcare privacy).
  • 30. Appendix to Chapter 1
    • Finding Statutory Law.
      • United States Code (USC).
      • State Statutes.
    • Finding Administrative Law.
      • Code of Federal Regulations (CFR).
    • Finding Case Law (Case Citations).
  • 31. Exhibit 1A-1
  • 32. Appendix
    • Reading & Understanding Case Law
      • Legal cases are identified by a “legal citation” (or a “cite”) as the example below:
    • Nunez v. Carabba’s Italian Grill, Inc. , 448 Mass. 170, 859 N.E.2d 801 (2007).
    Title: First Party is Plaintiff, second party is Defendant. The parties are either italicized or underlined .
  • 33. Appendix
    • Reading & Understanding Case Law
      • Legal cases are identified by a “legal citation” (or a “cite”) as the example below:
    • Nunez v. Carabba’s Italian Grill, Inc ., 448 Mass. 170, 859 N.E.2d 801 (2007).
    This is a 2007 State Supreme Court Case found in volume 448, page 170 of the Massachussets Reports, OR volume 859, page 801 of the NorthEastern Reporter 2 nd .