Chapter 2
Constitutional Law
Learning Objectives
 What is the basic structure of the United
States government?
 What clause gives the federal government the
power to regulate commercial activities among
the states?
 What is the Bill of Rights? What freedoms are
guaranteed by the First Amendment?
 What does “due process” mean?
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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.
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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.
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The Commerce Clause
Gibbons v. Ogden (1824)
To Chief Justice Marshall, commerce meant all
business dealings that substantially effected
more than one state.
The national government had the exclusive
power to regulate interstate commerce.
Today: commerce clause applies to ecommerce internet transactions.
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The Commerce Clause
 Expansion of Federal Regulatory Powers
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.
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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).
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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.
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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.
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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.
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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 the revenues on any
express or implied constitutional power.
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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”
and applied to the States as well.
 Some protections apply to businesses.
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Free 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): burning the
American flag is protected symbolic speech.
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Corporate Free 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).
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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.
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Online 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?
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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.
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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: compelling state interest.
 Non-Fundamental: rational relationship to state interest
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Equal Protection
 14th 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:
Minimum scrutiny-economic rights.
Intermediate scrutiny.
Strict Scrutiny – fundamental rights.
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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.
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