
Before the Revolutionary War,
States wanted a confederation with
weak national government and very
limited powers. After the war
ended, the States voted to create a
new, federal government that
shared power with States.
2
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 Federal
Form of Government:
 Shares power between national and
state governments.
 National government has limited,
enumerated powers delegated from
States.
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 Regulatory
Powers of States.
 10th Amendment.
 Police Powers: order, safety, morals.
4
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 Privileges
and Immunities
Clause.
 Art. IV §2 of the U.S. Constitution.
 Prevents state from imposing
unreasonable burdens on citizens –
particularly with regard to basic and
essential activities.
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
Full Faith and Credit Clause (Art. IV
§1).
 Applies only to civil matters.
 Ensures that any judicial decision with
respect to such property rights will be
honored and enforced in all states.
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
National government provides
checks and balances among three
branches: executive, legislative and
judicial.
 Legislative (Congress): Creates laws.
 Executive (President/Agencies): Enforce
laws.
 Judicial (Federal Courts): Interprets laws.
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
Power to regulate interstate
commerce defined in Gibbons v.
Ogden (1824): activities that
“substantially affect interstate
commerce.”
 Expansion to purely interstate
businesses began with Wickard v.
Fillburn (1942).
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8
In 1942, Supreme Court expanded
commerce clause to purely interstate
businesses (Wickard v. Fillburn).
 In 1964, Supreme Court prohibited
racial discrimination in interstate
commerce (Heart of Atlanta Motel v.
U.S.).

9
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Today, the Commerce Clause
authorizes the national government
to regulate virtually any business
enterprise, including the internetbased. Limits: U.S. v. Lopez (1995).
 What about medical marijuana and
the commerce clause?

10
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Generally, federal government has
exclusive authority to regulate
commerce that substantially affects
trade among the states.
 States possess inherent police
powers to regulate health, safety,
public order, morals and general
welfare. 

11
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However, state police powers or
regulations that substantially
interfere with interstate commerce
will be struck down.
 CASE 4.1 Family Winemakers of
California v. Jenkins (2010). Did the

State of Massachusetts discriminate
against out-of-state wineries?
12
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Article VI of the Constitution
provides that the Constitution, laws,
and treaties of the United States are
the “Supreme Law of the Land.”
 In case of direct conflict between
state and federal law, state law is
invalid. 

13
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A valid federal statute or regulation
will take precedence over a
conflicting state or local statute.
 Preemption occurs when Congress
chooses to act exclusively when
national and state governments
have concurrent powers

14
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Article I, Section 8: Congress has the
“Power to lay and collect Taxes,
Duties, Imposts, and Excises” which
shall be “uniform” among the
states.
 Expansion of commerce clause gives
taxing power as well.

15
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First Ten Amendments to the United
States Constitution are called the
Bill of Rights.
 All apply to natural persons and
most apply to business entities as
well.

16
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17
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Originally the Bill of Rights was a
limit on the national government’s
powers. Starting in 1925, Bill of
Rights was applied to States via the
“due process” clause of the 14th
Amendment.
 These rights are not absolute.

18
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Afforded highest protection by
courts.
 Symbolic Speech.

 Texas v. Johnson (1989), the “flag
burning” case.
19
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
Reasonable Restrictions.
 Balance must be struck between a
government’s obligation to protect its
citizens versus a citizen’s right to speech.
 If restriction is content neutral,
restrictions must target some societal
problem – not to primarily suppress the
message.
20
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Political speech by corporations is
protected by the First Amendment.
 In Citizens United v. Federal Election
Commission (2010) the Supreme
Court ruled that corporations can
spend freely to support or oppose
candidates for President and
Congress.

21
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Courts give substantial protection to
commercial speech (advertising).
 Restrictions must: Implement
substantial government interest;
directly advance that interest; and
go no further than necessary. 

22
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
CASE 4.2: Bad Frog Brewery, Inc. v.
New York State Liquor Authority
(2003). Did the State
unconstitutionally restrict
commercial speech when it
prohibited a certain gesture
(illustration) on beer labels?
23
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
Certain types of speech are not
protected by the First Amendment:
 Slander.
 Obscenity (see Miller v. California).
 Fighting Words.

Online Obscenity:
 CDA, COPA, Children’s Internet Protection
Act, Children’s Internet Protection Act
(2000).
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24
First Amendment may not
“establish” a religion or prohibit the
“free exercise” of religion.
 The Establishment Clause:

 Prohibits government from establishing
a state-sponsored religion, or passing
laws that favor one over the other. 
25
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
Establishment Clause.
 CASE 4.3
In Re Episcopal Church
Cases (2009). Can a secular court
resolve an internal dispute about
church property without becoming
impermissibly entangled with
religion?
26
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
Free Exercise Clause: First
Amendment guarantees the “free
exercise” of religion.
 Employers must reasonably
accommodate beliefs as long as
employee has sincerely held beliefs.
27
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
The Fourth Amendment requires
search warrants to have “probable
cause.”
 General searches through personal
belongings are illegal.
 Search warrants must be specific.
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Searches and Seizures of Business:
generally business inspectors must
have a warrant.
 However, a warrantless search is
permissible for seizure of spoiled or
contaminated food.

29
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Fifth Amendment guarantees no
person can be compelled to testify
against himself in a criminal
proceeding.
 Does not apply to corporations or
partnerships.

30
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Fifth and Fourteenth Amendments
provide “no person shall be
deprived of life, liberty or property
without due process of law.”
 Procedural and Substantive issues.


31
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Procedures depriving an individual
of her rights must be fair and
equitable.
 Constitution requires adequate
notice and a fair and impartial
hearing before a disinterested
magistrate.

32
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Focuses on the content or
substance of legislation.
 Laws limiting fundamental rights
(speech, privacy, religion) must have
a “compelling state interest.”
 Laws limiting non-fundamental
rights require only a “rational basis.”

33
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Strict
Scrutiny Test.
 Laws that affect fundamental rights of
similarly situated individuals differently are
subject to the “strict scrutiny” test.
 Any “suspect class” (race, national origin)
must serve a “compelling state interest”
which includes remedying past
discrimination.
34
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
Intermediate Scrutiny.
 Applied to laws involving gender or
legitimacy.
 To be constitutional laws must be
substantially related to important
government objectives.
 (EXAMPLE: Illegitimate teenage
pregnancy).
35
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
“Rational Basis” Test.
 Applied to matters of economic or
social welfare.
 Laws will be constitutional if there is
a rational basis relating to legitimate
government interest.
36
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Fundamental right not expressly
found in the constitution, but
derived from First, Fifth and
Fourteenth Amendments.
 Laws and policies affecting privacy
are subject to the compelling
interest test.

37
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
Federal Statutes Affecting Privacy
Rights.
 “Pretexting” for financial
information is illegal under GrammLeach-Bliley.
 Privacy Act of 1974.
 HIPAA of 1996.
 USA PATRIOT Act of 2001.
38
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