BA Chapter 5
What phrase has spawned a great deal of litigration concerning when federal power over insterstate commerice is plenary?
"among the several states"
The Supreme Court says that what laws must be held to the Compelling State Interest Test?
"suspect" classifications and burden the rights of African Americans, Hispanics, and Asian Americans must meet this compelling state interest standard.
What decision did the Court reach in the Heart of Atlanta Motel, Inc. v. United States.
(1) the motel was readily accessible from two interstate highways; (2) it advertised in national magazines and placed billboards on federal highways; and (3) approximately 75 percent of its guests came from outside the state of Georgia. In the Court's view, allowing such discrimination would discourage travel by the black community. Furthermore, the motel was set up to serve interstate travelers; it drew much of its business from interstate travelers; and it was involved in interstate commerce. For these reasons the Court concluded that Title II gave the government authority to prohibit Heart of Atlanta Motel, Inc.'s discriminatory practice of renting rooms only to white people.
What factors shape the answer to "should gov regulate business"?
(1) whether there is a perceived problem that business is not addressing on its own, (2) the severity of the problem, and (3) the need for a prompt solution. AND whether the regulation involves international trade, domestic trade, or regional/local trade.
What is the definition of commerce as defined in G v O?
- "the commercial intercourse between nations, in all its branches . . . regulated by prescribing rules for carrying on that intercourse." - federal government can regulate commerce that affects other states, even if that commerce is local in nature. - Basically, the Supreme Court declared that commerce included all aspects of business operations—even if many of these operations transpired wholly within one state.
How did the substantially important state interest test come to be?
- In the 1970s, the Supreme Court flirted with the idea of using strict scrutiny analysis for gender-based laws, particularly if the challenged legislative enactment unduly burdened women. - At that time, many commentators argued that, first, women represent a discrete, insular minority owing to their belated receipt of the right to vote, the existence of Married Women's Property Acts that denied women the capacity to contract, and so on. - Second, women represent a group of individuals who manifest immutable physical characteristics; in other words, women's secondary sex characteristics ordinarily distinguish women from men and vice versa. - the court never accepted these arguments, but carved out an intermediate tier of analysis or decision makers to use in evaluating challenges to gender based laws
The new restricted definition of interstate commerce that came as a result of Kidd v Pearson motivated the passage of what act and what consquences on the business-gov relationship?
- Sherman Act 1890 - led the Court to narrower interpretations and, consequently, the Court's invalidation of many subsequent federal enactments. This period returned to the laissez-faire philosophy of previous decades.
commercial speech
- advertising of products, businesses, services, etc
Compelling State Interest Test
- applied when a regulatory measure involves invidious discrimination or limitations or restrictions of certain fundamental rights - Under this test, courts presume that such regulations are invalid, only upholding those measures necessary to accomplish a compelling state interest. In these instances, the regulating body must show (1) that the regulation is necessary in order to attain a compelling state interest, (2) that no alternative, less burdensome ways exist to accomplish the state objective or goal, and (3) that the regulation is tailored as narrowly as possible while still attaining the goal. Such arguments have rarely been successful.
substantive dimension of the due process clause
- focuses not on providing fundamentally fair procedures but on the content, or the subject matter, of the law or regulation. - The theory is that individuals are protected by the Constitution when taking certain actions that the government would prefer that they do not take.
Indian Commerce Clause
- only Congress has the power to regulate commerce with them. - Any federal law that is based upon the Indian Commerce Clause must deal with commerce that occurs on Indian reservations.
1937 NLRB v. Jones & Laughlin Steel Corp
- overturned 50 years of narrow interpretation. - Chief Justice Hughes said:When industries organize themselves on a national scale, making their relation to interstate commerce the dominant factor in their activities, how can it be maintained that their industrial relations constitute a forbidden field into which Congress may not enter when it is necessary to protect interstate commerce from the paralyzing consequences of industrial war? - FULL CIRCLE
Since the mid-1960s, how has the SC used substantive due process?
- primarily as a means for protecting certain fundamental personal rights that are implied by constitutional wording and phraseology.
Under the first two prongs of where federal power is plenary over interestate commerce, what can the federal government do?
- regulate interstate carriers, roads, television and radio stations, and so on. - also has the power to exclude the goods, persons, or services it decides are harmful to interstate channels or facilities. - Congress can regulate the interstate shipment of stolen vehicles, diseased animals, spoiled meat, fungi-ridden fruit, or defective products under this federal police power.
Procedural Due Process
- some kind of hearing given before the gov can deprive one of life, liverty, or property - Such hearings generally require notice to the aggrieved party, an opportunity for that person to present his or her side of the story, and an impartial decision maker to preside over the hearing or other procedure. -
The Commerce Clause
- states that Congress shall have the power "to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." -
Rational Basis Test
- the government can distinguish among similarly situated persons if the statutory scheme—or classification—is rationally related to a legitimate state interest (or aim). - Courts normally presume that the regulation is valid unless no conceivable justification exists for the law. - lowest level of scruntiny
What does the commerce clause grant Congress?
- vast power to regulate the activities of businesses, reducing the power of the individual states to do the same. - the power to levy taxes - to do whatever is "necessary and proper" in order to effectively implement its regulation of commerce.
What are the three tests that are used to determine the legality of economic regulations under the EqPAct?
1. rational basis test 2. Strict Scruntiny: the "Compelling State Interest" Test 3. The Substantially Important State Interest Test
Federal admin agencies must follow what when passing rules and regulations in its authority and holding hearings when there are violations of rules and regualtions?
APA = Administrative Procedures Act
What happened as a result of the Kidd v Pearson case?
As a result of these opinions, federal regulation of business suddenly became restricted to actual interstate transportation and did not reach business deals that affected interstate business but that were conducted entirely in one state. Also, states were allowed some leeway to protect their citizens via their police power. Such transactions, defined as intrastate remained beyond the scope of federal regulation.
Wjat case established commerical speech test?
Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n of N.Y
What is the four part balancing test for commerical speech?
First, the speech in question cannot be illegal or misleading. Second, the law regulating the speech must be based on a legitimate government interest—such as the health and safety of citizens. Third, the law must directly advance this interest. Fourth, the law must be narrowly tailored, using the least restrictive means available to effectively meet the government interest.
Courts generally uphold valid state initiatives in furtherance of local health and safety measures that are not enacted merely to protect local economic interests. What determines if astate initiative like this will be upheld?
If the costs of compliance faced by out-of-state producers, when compared with the alleged benefits of the law, impose an unreasonable, or undue, burden on interstate commerce the law will be struck down. In the absence of discrimination against out-of-state firms or the imposition of an undue burden, the states have concurrent power to regulate commerce.
United State v. Dewitt
In 1870, the Court upheld a state law that banned the sale of illuminating oils that could ignite at lower temperatures. The state passed the statute to protect its inhabitants from the danger posed by oil fires. The majority in United States v. Dewitt4 held that the ban was a valid use of a state's police power under the Tenth Amendment and that the Commerce Clause did not prohibit the use of this state power.
In many instances the law views a business as a legal, or WHAT, person
JURISTIC
Gov statutes and regulations "discriminate" (differentiate) among groupds. Does this violate the EqPAct?
No, unless it stems from prejudice, bigotry, or stereotyping on racial, ethnic, gender, or similar bases does illegal invidious discrimination result.
In what three area is federal power plenary over interstate commerce?
Precedents over the years have established three such areas: (1) Congress's power to regulate the use of the channels of interstate commerce; (2) Congress's power to regulate the instrumentalities of interstate commerce (including persons and things); and (3) Congress's power to regulate activities that have a substantial relation to interstate commerce.
Heart of Atlanta Motel, Inc. v. United States details
The Heart of Atlanta Motel had a policy of refusing service to blacks. The federal government challenged this policy as a violation of Title II of the Civil Rights Act of 1964, which prohibits racial, religious, or national origin discrimination by those who offer public accommodations. The government claimed that the motel was involved in interstate commerce and that federal intervention was justifiable. The motel argued that it was a purely intrastate business and therefore was exempt from federal regulation under Title II. The Supreme Court held that because of its provision of services to interstate travelers, the motel was involved in interstate commerce.
Why was the Commerce Clause made? (exp and 4 reasons)
The founders understood that the basic failure of the Articles of Confederation was the federal government's inability to robustly regulate commerce. Therefore, they included the Commerce Clause to (1) strike down unfair state laws affecting business, (2) open up channels of commerce, (3) facilitate the transportation of goods, and (4) foster economic integration.
Because the government sees business as a juristic person, what does that mean for businesses?
This means that a business can assert constitutional rights to challenge what it views as excessive government regulation. Just as the Constitution stands as the guardian of individual rights, it also represents a significant weapon for businesses to use when they challenge the laws and regulations that affect them.
What case is an example that federal power is not boundless?
United States v. Lopez
Lucas v Souther Carolina Coastal Council
a land use regulation that denies an owner the economically viable use of his or her land is a taking subject to the Fifth Amendment. In the absence of such factors, zoning ordinances ordinarily pass muster under the Takings Clause even if the regulations restrict the use of the property and cause a reduction in its value, so long as the ordinances substantially advance legitimate state interests and do not extinguish fundamental attributes of ownership.
fundamental right
a right expressly or impliedly guaranteed in the Constitution
During an attempted taking, the government has to do what?
afford the property owner procedural due process.
In 2006, what did President Bush issue?
an executive order that required the federal government to use its takings power only "for the purpose of benefiting the general public and not merely for the purpose of advancing the economic interest of private parties to be given ownership or use of the property taken
What do advocates of Congress's law about making it a federal criminal offense for anyone to possess a firearm in a school zone?
argued that possession of firearms in a school zone could lead to violent crime, which, in turn, would hurt the national economy by (1) increasing the costs associated with violent crime; (2) reducing people's willingness to travel to areas they deem unsafe; and (3) threatening the learning environment, which would lead to poorly educated citizens.
State regulation of econoimc matters is permissible as long as the regulation passes what test?
balancing test
For a state tax to be legal under the Commerce Clause, it must be what?
be applied to an activity that has a substantial connection with the taxing state; it must be fairly apportioned; it must not discriminate against interstate commerce; and it must be fairly related to the services provided by the state.
Why is exclusive power over commerce rare?
because of the interdependent nature of our economy and the Supreme Court precedents
Why do state powers of taxation pose special problems under the Commerce Clause?
because the states' legitimate interests in increasing their revenues by taxing business entities may burden interstate commerce.
intrastate
begun, carried on, and completed wholly within the boundaries of a single state
in regards to commerical speech, courts will rule that the regulation on commercial speech is preseumptively not valid when the regulation burdens what?
burdens the content of individual speech ("content-based" regulations) by punishing some speech while "favoring" other speech. As a result, such laws must pass the "strict scrutiny/compelling state interest" (the "least restrictive alternative") test
Underregulation can...
can cause harm to customers and disrupt the social contract.
United States v. Women's Sportswear Manufacturers Association (1949)
case involving a Sherman Act challenge to a local price-fixing arrangement, "If it is interstate commerce that feels the pinch, it does not matter how local the operation which applies the squeeze. - UPHELD THE RIGHT OF THE FEDERAL GOVERNMENT TO REGULATE THE CONDUCT IN DISPUTE
Yick Wo v Hopkins
case, read book lol
In the 1888 Kidd v Pearson case, what did that Court rule?
commerce meant transportation
What three areas were estblished as falling exclusively within federal regulation?
commerce with foreign nations, commercial activities involving Indian tribes (Native Americans), and commerce between the states (interstate commerce)
Describe the test the governmnet uses to determine whether or not to limit speech
compares such factors as (1) the importance of these rights in a democratic society, (2) the nature of the restriction imposed by the law, (3) the type and importance of the government interest the law purports to serve, and (4) the narrowness of the means used to effectuate that interest.
balancing test
compares the burdens on interstate commerce caused by the regulation and the importance of the state interest that underlies the regulation.
social regulation
concern for such issues as workplace safety, equal opportunity, environmental protection, and consumer protection
What do state regulations cover regarding business?
cover consumer protection, interest rates, and highway weight limits.
Married Women's Property Acts
denied women the capacity to contract
What does the federal government mandate for corporations?
disclose material events, financial successes and failures, and, in some cases, how much top executives are paid.
What does the EqPAct protect from?
discrimination
If a state regulation hampers interstate commerce in any way, the court is likely to strike it down under what clause?
dormnat commerce clause
liberty in the business context
encompasses the right to contract and to engage in gainful employment.
What issues do federal regulations address
environmental protection, securities, employee safety, wage and hour issues, and labor relations.
A regulation is invalid under the Due Process Clause if it...
fails to advance a legitimate government interest or if it constitutes an unreasonable means of advancing a legitimate government interest
The government can regulate commerical speech and even ban it if it is what?
false and misleading
Bipartisan Campaign Reform Act (BCRA)
federal law that, among other things, banned direct campaign contributions from businesses to candidates for political office and more general contributions within a certain pre-election period
The EqPAct only protects individuals from discrimnation from what source?
federal or state govs
What does the Commerce Clause prohibit individual states from doing?
from regulating to protect purely local economic interests at the expense of national economic interests.
Where does Congress's plenary power in the area of Indian commerce relations stme from ?
from the quasi-sovereign status that historically has been accorded to Native American tribes. As such, Native American tribes have virtually complete control over their own reservations and land; the states have little say over reservation affairs. Federal law generally preempts even state or local regulation of off-reservation activities.
Just as the Equal Protection Clause prohibits virtually all legislation that burdens a suspect classification, it also provides checks on any government action that penalizes or unduly burdens a what?
fundamental right
What should society and businesses try to reach?
happy medium - Somewhere between the extremes of over-regulation and underregulation, a happy medium exists so as to maximize the well-being of business, society, and government.
What is th eonly way a law is struck down under the rational basis test standard?
if its provisions violate another constitutional provision or are irrational
When is due process required?
if state action deprives us of property rights such as public employment, public education, continuing welfare benefits, or continuing public utility services.
Where was the term commerce defined?
in the case of Gibbons v Ogden through judicial review by Chief Justice Marshall
Property dimension of the Due Process Clause
include ownership of real estate, personal property, and money; but the Court also has extended the term property to entitlements to specific benefits set out under applicable state or federal law.
Adarand Constructors, Inc. v. Pena
involved a challenge to a federal program that granted preferential treatment to minority subcontractors
What two official gov branches keep an eye of admin agencies?
judicial and legislative (the power of Congress to abolish any agency and the power of the courts to review any agency's conduct are considered sufficient control devices)
Caveat emptor
let the buyer beware
Equal Protection Clause in the context of business
limits the types of regulations government can impose on people
Administrative Procedures Act (APA)
mandates public participation and sets out the rules and procedures that such agencies must follow as they legislate, adjudicate, and enforce their regulations.
discriminatory taxes
may pose due process and equal protection problems.
When must the timing of the hearing be in regards to procedural due process?
must occur before or after the deprivation of a protected interest
Does the Constitution have a set clear formula for deciding when a taking has occurred?
no, any actual appropriation of property will suffice, and partial appropriations might qualify as well
How much power do admin agencies have?
only as much authority as the legislature delegates to them
As a result of the 1873 In re State Freight Tax decision, what was said about the federal government?
opinion held that the federal government could regulate only interstate commerce. By limiting the definition of commerce to commerce between two or more states, the Court somewhat reduced the federal power to regulate business, at least when the business was shown to be purely intrastate.
the Communications Decency Act of 1995
outlawed the electronic transmission of lewd and indecent materials to anyone under age 18 and subjected to criminal penalties any commercial communication service that allows its system to be used for such transmissions
Quasi-judicial
partly judicial; empowered to hold hearings but not trials
quasi-legislative
partly legislative; empowered to enact rules and regulations but not statutes
Courts generally have recognized that Congress has what power over foreign commerce or trade?
plenary
Because of the expansive def of reach of the federal government under the commerce clause also provided the federal government with what?
power to address issues of racial discrimination and bigotry
What certain powers do admin agencies have?
quasi-legislative and quasi judicial
The just compensation paid out by the government when taking property must what?
reflect only the fair market value of the property; the price paid need not compensate the owner for the sentimental value of the property, the owner's unique need for the property, or the gain the regulating body realizes by virtue of the taking.
laissez faire economy
reflected the belief that business operates best when uninhibited by the government.
Dormant Commerce Clause
restriction on states' authority to pass laws that substantially affect interstate commerce
During the 19th century, it was a great time to be an entrpreneur, but what did hte general populace see "captains of industry" as?
robber barons, and many people disliked the abuse and mistreatments that workers suffered from
the government can regulate the content of commerical speech so long as the regulation does what?
serves and advances a substantial government interest and the regulation is no more extensive than necessary to achieve that government objective.
Government regulation takes what two forms?
social regulation and economic regulation
United States v. Morrison
struck down part of another federal law—the Violence Against Women Act—on the same grounds. The Court held that the effects of violence against women were primarily non-economic and that this subject had traditionally been regulated by the states. After Lopez and Morrison, Congress may not be able to regulate non-economic activity that merely might, when considered cumulatively, have an effect on interstate commerce.
Intrastate commerce may be subject to federal control if the intrastate activity has a what?
substantial effect on interstate commerce or if Congress rationally can conclude that the activity in question affects interstate commerce
What must statutory schemes of regulations under the heightened sruntiny test be? What if it's not?
substantially related to an important state interest." If the enacting body cannot meet this test, courts will invalidate the legislation.
What do local regulations cove regarding business?
such as building codes and zoning.
In re State Freight Tax (1873)
the Court stated that the Commerce Clause's phrase among meant between. As a result, this opinion held that the federal government could regulate only interstate commerce.
The Takings Clause
the Fifth Amendment also provides that "private property [shall not] be taken for public use, without just compensation." This Fifth Amendment restraint on the power of the federal government applies to the states through the Fourteenth Amendment's Due Process Clause.
United States v. Lopez
the Supreme Court invalidated a federal law as exceeding congressional authority under the Commerce Clause. This was the first time the Court had struck down such a law in more than 50 years. Congress had made it a federal criminal offense for anyone to possess a firearm in a school zone. The Court held that the act exceeds Congress's authority under the Commerce Clause. The Court held that possession of a gun in a local school zone does not constitute an economic activity that might, through repetition elsewhere, have a substantial effect on interstate commerce.
Craig v Boren
the Supreme Court invalidated an Oklahoma law that allowed females to drink beer at age 18 but prohibited males from drinking beer until age 21
Burbank v. Lockheed Air Terminal, Inc.
the Supreme Court struck down a local ordinance that prohibited jet airplane takeoffs during specified hours (11:00 p.m. to 7:00 a.m. local time). The Court invalidated this ordinance because of the need for national uniformity in airplane flight patterns (having this airport "off limits" for several hours could create clogs in air traffic) and because federal law, in the form of agencies concerned with aeronautical and environmental matters, preempted such local or state initiatives.
Nondiscriminatory taxation schemes that impose the same taxes on local and nonlocal businesses require courts to employ what?
the balancing test
economic regulation
the behavior of firms, especially the firms' effects on prices, production, conditions for entry or exit in the market, and so on
State tax laws that single out interstate commerce usually violate what?
the commerce clause
When a law classifies certain people for certain purposes, what is the most apporopriate vehicle for challenging the law?
the equal protection doctrine
What is the nation's largest employer?
the federal government
(PROCEDURAL DP) The SC has held that a hearing must precede what?
the termination of welfare benefits, the government's seizure and forfeiture of real estate allegedly used in connection with the commission of crimes, termination of public employment, and prejudgment garnishment of wages.
Where did prsent day government regulation emerge from?
the tumultuous times that were the 19th century when entrepreneaurs were seen as robber barons, and when workers hated their treatment, and when there was no more land to go west on so people caleld for reform
Overregulation can be what....
unduly burdensome on business, to the detriment of the economy.
A state's concurrent power to regulate commerce ceases when what happens?
when state regulation conflicts with federal law
In regards to property and the taking clause, what does the disagreement betwene parties in a lawsuit center around?
whether a taking occurred (whether the Constitution obligates the government to pay just compensation or whether the gov action amounts only to regulation under the exercise of its police power, where NO comp is owed)
Recently, the answer to whether government should intervene with businesses is also affected by what/
whether the businesses that will be affected are "too big to fail."
