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The Historical and Constitutional Foundations

The Historical and Constitutional Foundations

Published in Economy & Finance
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  • 1. CHAPTER 1 The Historical and Constitutional Foundations
  • 2.
    • 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 commerce among the states?
    • What is the Bill of Rights? What freedoms are guaranteed by the First Amendment?
    Learning Objectives
  • 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.
      • Federal Statutes.
      • State & Local Statutes and Ordinances.
      • Uniform Laws (e.g.,Uniform Commercial Code).
  • 4. Sources of American Law
    • Administrative Law.
      • 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.
      • Agencies make rules, then investigate and enforce the rules in administrative hearings.
  • 5. Sources of American Law
    • Case Law and Common Law Doctrines.
      • Much of the common law is still used today.
      • Common law governs all areas not specifically covered by statutory or constitutional law.
      • Restatements of the Law: modern compilations of common law principles found, e.g., in contracts, torts, property and agency.
  • 6. 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.
  • 7. The Common Law Tradition
    • 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.
  • 8. The Common Law Tradition
    • Equitable Remedies & Courts of Equity.
      • Remedy: means to enforce a right or compensate for injury to that right.
      • Remedies in Equity: based on justice and fair dealing a chancery court does what is right.
      • Merging : Today, legal and equitable remedies are found in the same court.
      • Equitable Maxims: “Whoever seeks equity must do equity.”
  • 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. Constitutional Powers of Government
    • Federalism: 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.
  • 12. 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.
  • 13. The Commerce Clause
    • Gibbons v. Ogden (1824).
      • Interstate commerce means any business dealing that substantially affects more than one state.
      • The national government has the exclusive power to regulate interstate commerce.
  • 14. The Commerce Clause
    • Since Gibbons, federal regulatory powers have expanded under Commerce Clause:
      • Wickard v. Filburn (1942). Purely local production, sale and consumption of wheat was subject to federal regulation.
      • Heart of Atlanta Motel v. U.S. (1964). Motel that provided public accommodations to guests from other states was subject to federal civil rights legislation.
  • 15. The Commerce Clause
    • Commerce Clause 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).
  • 16. 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.
  • 17. 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.
  • 18. 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.
    • Later, the Bill of Rights was “incorporated” via the 14 th Amendment and applied to the States.
    • Some protections apply to businesses.
  • 19. 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.
    • Applies to minors.
      • Hodgkins v. Peterson (2004).
  • 20. Commercial Speech
    • Corporate 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).
      • Interactive Digital Software Association v. St. Louis County, Missouri (2003).
  • 21. 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.
  • 22. 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.
      • What about “hate” speech on the web?
  • 23. First Amendment: 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 clause: person can believe what he wants, but actions may be unconstitutional.
  • 24. Due Process
    • Due Process is both procedural and substantive.
    • 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
  • 25. Equal Protection
    • 14 th Amendment: A state may not “deny to any person within its jurisdiction the equal protection of the laws.”
    • Means that government must treat similarly situated individuals (or businesses) in the same manner. Courts apply different tests:
      • Minimal scrutiny-economic rights.
      • Intermediate scrutiny.
      • Strict Scrutiny – fundamental rights.
  • 26. Federal Laws Protecting Privacy Rights
    • Fourth amendment protects against unreasonable search and seizures.
    • What about private information on the internet? Reno v. Condon (2000).
    • Griswold v. Connecticut (1965) found a right to personal privacy implied in constitution, expanded in Roe v. Wade (1973).
    • Website privacy policies.
    • HIPAA of 1996 (health information).
  • 27. Appendix
    • Finding Statutory Law.
      • United States Code (USC).
      • State Statutes.
    • Finding Administrative Law.
      • Code of Federal Regulations (CFR).
    • Finding Case Law (Case Citations).
      • Supreme Court Cases at
      • Federal Court Cases at
      • State Court Cases at
  • 28. Appendix
    • Reading & Understanding Case Law
      • Legal cases are identified by a “legal citation” (or a “cite”) as the example below:
    • EMG Recordings, Inc. v. Sinnot, 300 F. Supp.2d 993 (E.D. Ca. 2004).
    Title: First Party is Plaintiff, second party is Defendant. The parties are either italicized or underlined .
  • 29. Appendix
    • Reading & Understanding Case Law.
      • Legal cases are identified by a “legal citation” (or a “cite”) as the example below:
    • EMG Recordings, Inc. v. Sinnot, 300 F. Supp.2d 993 (E.D. Ca. 2004).
    This is a federal court case from the Eastern District of California, found in Volume 300, Page 993 of the Federal Supplement 2d. This case was decided in 2004.