Constitutional LawOne in a millionConstitution of .docx

Constitutional Law
One in a million
Constitution of the United States is the greatest legal document
in our legal system
Drafted in 1787, still successful today
No law can conflict with it
Short and easy to read
Permitted interpretation
Versatility
©2015 Cengage Learning. All Rights Reserved. May not be
scanned, copied, or duplicated, or posted to a publicly
accessible website, in whole or in part.
First nation in modern history founded on the idea that:
People could govern themselves democraticallyStates were
governing themselves under the Articles of Confederation -
Gave the central government no real powerFramers set out to
draft a new document and to create a government The
Constitution is a series of compromises about power

Separation of powers
One method of limiting power:
Create a national government divided into three branches
Executive, legislative, and judicial
Each independent and equalIndividual rights
Bill of rights - First 10 amendments were added to the
Constitution
Congressional power
Members create statutes that influence jobs
Article I, section 8 - Lists the 18 types of statutes that Congress
is allowed to pass
National government may create currencyCommerce clause:
Part of Article I, Section 8, that gives Congress the power to
regulate commerce with foreign nations and among states

Interstate commerce
Power to bring coordination and fairness to trade among the
states
Stop the states from imposing the taxes and regulations that
were wrecking the nation’s domestic tradeSubstantial effect rule
Congress may regulate any activity that has a substantial
economic effect on interstate commerce
Current application: The Affordable Healthcare Act
May result in as many as 30 million uninsured Americans
gaining health care coverageState legislative power
Dormant aspect holds that a state statute which discriminates
against interstate commerce is almost always unconstitutional

Supremacy clause: Constitution, and federal statutes and
treaties, shall be the supreme law of the land
Conflict between federal and state statutes - Federal law
preempts the field
No conflict - Congress demonstrates that it intends to exercise
exclusive control over an issue, federal law preempts
Executive power
Article II of the Constitution defines executive power
President’s basic function is to enforce the nation’s laws

Three of the president’s key powers
Appointment - Administrative agencies play a role in business
regulation
President nominates the heads
Legislation - The president and his advisors can propose bills to
Congress and the president can veto bills from Congress
Foreign policy – President:
Conducts the nation’s foreign affairs
Coordinates international efforts
Negotiates treaties
Heads the military
May not declare war
Judicial power
Article III of the Constitution
Creates the Supreme Court
Permits Congress to establish lower courts within the federal
court system
Federal courts have two key functions
Adjudicating cases - Federal court system hears criminal and
civil cases
Judicial review - Power of federal courts to declare a statute or
governmental action unconstitutional and void

Judicial review-refers to the power of federal courts to declare a
statute or governmental action unconstitutional
Judicial activism: A court’s willingness to decide issues on
constitutional grounds
Judicial restraint: A court’s attitude that it should leave law-
making to legislators
Constitutional rights protect only against governmental
actsIncorporation: Rights explicitly guaranteed at one level are
incorporated into rights that apply at other levels

Political speech
Protected unless it is intended and likely to create imminent
lawless actionGovernment may regulate the time, place, and
manner of protected speechMorality and obscenity
Obscenity has never received constitutional protection
Commercial speech: Communication that has the dominant
theme of proposing a business transaction
Government may regulate commercial speech:
Provided that the rules are reasonable and directed to a
legitimate goal

Procedural due process: Government must go through
procedures to ensure that the result is fair
Steps in analyzing a procedural due process
Is the government attempting to take liberty or property?
How much process is due?
Neutral fact-finder
Attachment of property
Government employment
Academic suspension
The Takings Clause: When the government takes property for
public use, it has to pay a fair price
Eminent domain: The power of the government to take private
property for public useSubstantive due process: Some rights are

so fundamental that the government may not take them from us
at all
Equal protection clause: Requires the government to treat
people equally
Classifications
Minimal scrutiny: Economic and social regulation
Government actions that classify people or corporations on
these bases are almost always upheld
Intermediate scrutiny: Gender
Government classifications are sometimes upheld
Strict scrutiny: Race, ethnicity, and fundamental rights

Classifications based on any of these are almost never upheld
Business Ethics and Social Responsibility
Ethics: How people ought to act
What is the role of business in society?
Managers should make the company as profitable for
shareholders as possible
OR
Managers have an obligation to all stakeholders

Society as a whole benefits from ethical behaviorPeople feel
better when they behave ethicallyUnethical behavior can be
very costly
Utilitarian ethics
Utilitarianism – Written by Englishman John Stuart Mill
Correct decision - To maximize overall happiness and minimize
overall pain
Examples - Risk management and cost-benefit analyses
Difficult to measure utility and predict benefit and harm
accurately
Deontological ethics
Deontological: Greek word for obligatory
Duty to do the right thing regardless of the result
Kant’s categorical imperative: An act is only ethical if it would
be acceptable for everyone to do the same thing
No decision that treats people as commodities can be considered
just

Rawlsian justice
Veil of ignorance: Set up a societal system without knowing
whether we would personally be one of its winners or losers
Type of society to be set up:
Design a society that provided basic freedoms to everyone
Apply the difference principle
Difference principle: Rawls’ suggestion that society should
reward behavior that provides the most benefit to the
community as a whole
Money
Can contribute to happiness
Higher income levels actually reduce the ability to appreciate
small pleasures
Way of keeping score

Rationalization
More creative people tend to be less ethical
Better at rationalizing their bad behaviorConformityFollowing
orders
Fear of punishment
Belief in authority figures
Ability to rationalize
Euphemisms
In making ethical decisions, it is important to use accurate
terminologyLost in a crowd
In a group:
People are less likely to take responsibility, assuming that
someone else will
In a business
Tempting to go with the flow rather than protest the wrongdoing

Intentional deception is toleratedConsequences can be severe
Within an organization, every employee has a responsibility to
himself or herself to behave ethicallyTo society
Must avoid doing harm to people or the planetTo its employees
Cannot be successful without good workers
Employees should be treated well
Outsourcing - Cutting jobs at home and relocating operations to
another country
To its customers
Treating customers well increases profits and helps
shareholdersTo overseas contract worker
Higher productivity leads to higher wages
In China - Employees want to work even longer hours to earn
more money

Taiwan and South Korea welcomed sweatshops
Companies argue that higher wages lead to increased prices
Drive away customers
Loyalty – pick your battlesExit – one option is to choose to
leave in the face of unacceptable, unethical behaviorVoice – the
other option is to speak out and seek to change unethical
behavior
CSR: The idea that companies have an obligation to contribute
positively to the world
1. The Senate recently released a report on wrongdoing at JP
Morgan Chase. It found that bank executives lied to investors
and the public. Also, traders, with the knowledge of top
management, changed risk limits to facilitate more trading and

then violated even these higher limits. Executives revalued the
bank’s investment portfolio to reduce apparent losses. JP
Morgan’s internal investigation failed to find this wrongdoing.
Into what ethics traps did these JP Morgan employees fall?
What options did the executives and traders have for dealing
with this wrongdoing？
2. Located in Bath, Maine, Bath Iron Works builds high tech
warships for the Navy. Winning Navy contracts is crucial to the
company’s success—it means jobs for the community and
profits for the shareholders. Navy officials held a meeting at
Bath’s offices with its executives and those of a competitor to
review the specs for an upcoming bid. Both companies
desperately wanted to win the contract. After the meeting, a
Bath worker realized that one of the Navy officials had left a
folder on a chair labeled: “Business Sensitive.” It contained
information about the competitors’ bid that would be a huge
advantage to Bath. William Haggett, the Bath CEO, was notified
about the file just as he was walking out the door to give a
luncheon speech. What should he do? What pitfalls did he face?
What result if he considered Mill, Kant, or the Front Page test?
3. A group of medical schools conducted a study on very
premature babies—those born between 24 and 27 weeks of
gestation (instead of the normal 40 weeks). These children face
a high risk of blindness and death. The goal of the study was to
determine which level of oxygen in a baby’s incubator produced
the best results. Before enrolling families in the study, the
investigators did not tell them that being in the study could
increase their child’s risk of blindness or death. The study made
some important discoveries: the level at which too much oxygen
increased the risk of blindness and level at which too little
increased the risk of death. What would Mill and Kant say about
this decision not to tell the families?
4. Because Raina processes payroll at her company, she knows
how much everyone earns, including the top executives. This
information could make for some good gossip, but she has kept
it all completely secret. She just found out, however, that her

boss knew that it is against company policy for her to do payroll
for C-level employees. Yesterday, the CEO went to her boss to
confirm that he, the boss, was personally doing the processing
for top management. Her boss lied to the CEO and said that he
was. Then he begged Raina not to tell the truth if the CEO
checked with her. Raina just got a message that the CEO wants
to see her. What does she say if he asks about the payroll?
5. YOU BE THE JUDGE WRITING PROBLEM Scott Fane was
a CPA licensed to practice in New Jersey and Florida. He built
his New Jersey practice by making unsolicited phone calls to
executives. When he moved to Florida, the Board of
Accountancy there prohibited him (and all CPAs) from
personally soliciting new business. Fane sued. Does the First
Amendment force Florida to forgo foreclosing Fane’s phoning?
Argument for Fane: The Florida regulation violates the First
Amendment, which protects commercial speech. Fane was not
saying anything false or misleading, but was just trying to
secure business. This is an unreasonable regulation, designed to
keep newcomers out of the marketplace and maintain steady
business and high prices for established CPAs. Argument for the
Florida Board of Accountancy: Commercial speech deserves—
and gets—a lower level of protection than other speech. This
regulation is a reasonable method of ensuring that the level of
CPA work in our state remains high. CPAs who personally
solicit clients are obviously in need of business. They are more
likely to bend legal and ethical rules to obtain clients and keep
them happy, and will lower the standards throughout the state.
6. President George H. W. Bush insisted that he had the power
to send American troops into combat in the Middle East,
without congressional assent. Yet before authorizing force in
Operation Desert Storm, he secured congressional authorization.
President Bill Clinton statedthathe was preparedtoinvade
Haitiwithout a congressionalvote.Yethe bargained hard to avoid
an invasion, and ultimately American troops entered without the
use of force. Why the seeming doubletalk by both Presidents?
7. In the landmark 1965 case ofGriswold v. Connecticut, the

Supreme Court examined a Connecticut statute that made it a
crime for any person to use contraception. The majority
declared the law an unconstitutional violation of the right of
privacy. Justice Black dissented, saying, “I do not to any extent
whatever base my view that this Connecticut law is
constitutional on a belief that the law is wise or that its policy
is a good one. [It] is every bit as offensive to me as it is to the
majority. [There is no criticism by the majority of this law] to
which I cannot subscribe—except their conclusion that the evil
qualities they see in the law make it unconstitutional.” What
legal doctrines are involved here? Why did Justice Black
distinguish between his personal views on the statute and the
power of the Court to overturn it?
8. Gilleo opposed American participation in the war in the
Persian Gulf. She displayed a large sign on her front lawn that
read, “Say No to War in the Persian Gulf, Call Congress Now.”
The city of Ladue prohibited signs on front lawns and Gilleo
sued. The city claimed that it was regulating “time, place, and
manner.” Explain that statement, and decide who should win.

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