Chapter 5 – The
Constitution
and the
Regulation of
Business
Copyright © 2011 by Jeffrey Pittman
Section 1 – The
Constitutional
Powers of
Government
3
History of the Constitution


After our war of independence, the U.S. operated
under the Articles of Confederation, adopted in
1781
The Articles conferred little power on the federal
government



For example, the federal government could not
tax or raise an army
A convention was held in Philadelphia, in 1787, to
consider amending the Articles of Confederation
The convention delegates eventually proposed a
new constitution, a legal document that would
need ratification by the states
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History of the Constitution
 The
greatest fear about the proposed
Constitution was the creation of a strong
central government
 The Constitution debate, as captured in
the Federalist Papers, identified
protections against a strong central
government
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The Constitution
Preamble - ["We the people...."]
 Article I - The Legislative Branch
 Article II -The Presidency
 Article III -The Judiciary
 Article IV - The States
 Article V - The Amendment Process
 Article VI - Legal Status of the Constitution
 Article VII - Ratification
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Proposed Forces Limiting the
Federal Government
 Separation

of powers, Articles I to III
Separation of powers is accomplished by
dividing powers of government, expecting
that each branch of government will act as
a check on the other branches
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7
Proposed Forces Limiting the
Federal Government
 Enumerated
Section 8

legislative powers, Article I,
The federal legislature under the Constitution is
“limited” by possessing only powers
enumerated in Article I, Section 8
 Eventually,
the Ninth and Tenth
Amendments
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8
Protecting the States and the
People
Amendment IX
The enumeration in the Constitution, of certain
rights, shall not be construed to deny or
disparage others retained by the people.
Amendment X
The powers not delegated to the United States
by the Constitution, nor prohibited by it to the
states, are reserved to the states respectively,
or to the people.
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The Constitution
The U.S. Constitution, as ratified in 1789 and
amended in 1791, has two functions:
 Create a system of government

This is accomplished by the Constitution,
Articles I to VII
 Establish
individual rights in relation to the
government

This is accomplished by the Bill of Rights and
other amendments
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Commerce Clause
 The
majority of federal power today
over the business community comes
from the Article 1, Section 8, the
commerce clause
 “The Congress shall have power to
regulate commerce . . . among the
several states”
 State control over activities within the
state comes in part through the state
police powers
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Commerce Clause
 Note
the national expansion of powers
under the commerce clause, state
actions and the “dormant” clause
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Constitutional Clauses
 The
Supremacy Clause
 Full Faith and Credit Clause
 Privileges and Immunities Clause
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Section 2 –
Business and
the Bill of Rights
14
The Role of the Amendments
 As
we examine the Constitutional
Amendments, note that the protections
found there only provide protection from
the government
 Private (nongovernmental) action is not
regulated by the Constitution
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15
The Bill of Rights
Amendment I
Congress shall make no law respecting an
establishment of religion, or prohibiting the
free exercise thereof; or abridging the
freedom of speech, or of the press; or the
right of the people peaceably to
assemble, and to petition the government
for a redress of grievances.
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First Amendment - Speech
“Congress shall make no law . . . abridging
the freedom of speech”
 The Supreme Court provides political
speech the highest level of protection

Note the possibility of symbolic speech
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First Amendment - Speech

Unprotected speech includes obscenity, child
pornography, and defamation, for example


See Lott v. Levitt
Partially protected speech includes
commercial speech (advertising) – this is
protected but not as highly as political
speech


Regarding Bad Frog Brewery v. New York, see
the Bad Frog Website)
The government may regulate commercial
speech following the test identified in the next
slide
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The First Amendment and
Commercial Speech
False or Misleading
Commercial
Speech
 The government
may ban or restrict
speech here at the
discretion of the
government

“True” Commercial
Speech
The government
may ban or restrict
speech here only
after showing the
ban 1) goes no
further than
necessary to 2)
directly advance 3)
a substantial
government interest
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Freedom of Religion
 Congress
shall make no law respecting an
establishment of religion (establishment
clause), or prohibiting the free exercise
thereof (free exercise clause). . .
 Remember that this only protects religion
regarding public (government) action
and not private action

Religion in private employment is regulated
by the 1964 Civil Rights Act, textbook
Chapter 21
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The Bill of Rights
Amendment IV
The right of the people to be secure in their
persons, houses, papers, and effects,
against unreasonable searches and
seizures, shall not be violated, and no
warrants shall issue, but upon probable
cause, supported by oath or affirmation,
and particularly describing the place to
be searched, and the persons or things to
be seized.
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The Fourth Amendment
If the searching party is
a government
employee:
 US Constitution – The
Fourth Amendment
applies, protecting
against
unreasonable
searches and
seizures
 See U.S. v. Moon
If the searching party
is not a
government
employee:
 No federal law is
applicable; look to
state law
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Fifth Amendment
 The
protections against self incrimination
from the Fifth Amendment only apply in
criminal cases
 Only people are protected by the Fifth,
not businesses
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Section 3 – Due
Process and
Equal
Protection
24
Due Process
Amendment V
No person shall be . . . deprived of life,
liberty, or property, without due process of
law . . .
 The above language provides protections
for procedural due process and
substantive due process
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Equal Protection
 The
Fourteenth Amendment provides all
persons “equal protection of the laws.”
 Note the different levels of scrutiny, that is,
strict, intermediate, and rational basis
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Section 4 –
Privacy Rights
27
Privacy
 Privacy
is not directly mentioned in the
Constitution; the courts have inferred
privacy protection from other
Constitutional protections

Remember that the Constitution only
provides protection from government
action
 Other
privacy laws like HIPPA do apply to
the private sector
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