BUSINESS LAW TODAY Essentials 9th Ed Roger LeRoy Miller - Institute for University Studies, Arlington, Texas Gaylord A Jentz - University of Texas at Austin, Emeritus Chapter The Historical and Constitutional Foundations © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Learning Objectives  What are the four primary sources of law in the     United States? What is the common law tradition? What constitutional clause gives the federal government the power to regulate commercial activities among the various states? What constitutional clause allow slaws enacted by the federal government to take priority over conflicting state laws? What is the Bill of Rights? What freedoms are guaranteed by the First Amendment? © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Business Activities and the Legal Environment  Knowledge of “black letter” law is not enough  Many different laws affect a single business transaction  Ethics and business decision making Ethics: what constitutes right or wrong behavior © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Sources of American Law  Constitutional Law Found in text and cases arising from federal and state constitutions U.S Constitution is the supreme law of the land  Statutory Law Laws enacted by federal and state legislatures Local ordinances Uniform Laws (e.g.,Uniform Commercial Code) © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Sources of American Law  Administrative Law Rulemaking Rules, orders and decisions of administrative agencies, federal, state and local Administrative agencies can be independent regulatory agency such as the Food and Drug Administration Adjudication agencies make rules, then investigate and enforce the rules in administrative hearings © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use The Common Law Tradition  Early English Courts of Law King’s courts started after Norman conquest of 1066 Established the common law—body of general legal principles applied throughout the English empire King’s courts used precedent to build the common law © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Stare Decisis  Stare Decisis Practice of deciding new cases based on precedent A higher court’s decision based on certain facts and law, is a binding authority on lower courts Helps courts stay efficient © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Equitable Remedies and Courts of Equity  Remedy: means to enforce a right or    compensate for injury to that right Remedy at Law: in king’s courts, remedies were restricted to damages in either money or property Equitable Remedy: based on justice and fair dealing a chancery court does what is right: specific performance, injunction, rescission Plaintiffs (injured party initiating the lawsuit), Defendants (allegedly caused injury) © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Exhibit 1-2 Procedural Differences © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Classifications of Law  Substantive vs Procedural Law Substantive: laws that define and regulate rights and duties Procedural: laws that establish methods for enforcing and protecting rights  Civil Law and Criminal Law Civil: private rights and duties between persons and government Criminal: public wrongs against society © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 10 First Amendment: Freedom of Speech  Right to Free Speech is the basis for our democratic government  Symbolic Speech: includes gestures, movements, articles of clothing Texas v Johnson (U.S 1989) Hodgkins v Peterson (7th Cir 2004)  Reasonable Restrictions: balance government’s obligation to protect community vs individuals right to speech © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 21 Corporate Political Speech  Corporations also have protected political speech (although not to the degree of a natural person)  Supreme Court struck down campaignreform finance laws as unconstitutional burden on corporate speech (FEC v Wisconsin Right to Life) © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 22 Commercial Speech  Commercial speech is given substantial protection Generally, government restrictions must:  Seek to implement substantial government interest,  Directly advance that interest, and  Must go no further than necessary to accomplish  CASE 1.2 Bad Frog Brewery, Inc v N.Y State Liquor Authority (1998) Denial of label on beer lacked a “reasonable fit” with state’s interest in shielding minors from vulgarity, and was therefore unconstitutional © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 23 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 © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 24 Online Obscenity  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? © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 25 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 CASE 1.3 In re Episcopal Church Cases (2009) Secular court can resolve a church property dispute without “establishing” a church in violation of the First Amendment © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 26 Freedom of Religion  Free Exercise: person can believe what he wants, but actions may be unconstitutional  What about freedom of religion and illegal drug use?  Within the Muslim faith, is it a religious violation for a woman to appear in public without a scarf (hijab) over her head? © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 27 Due Process  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: requires compelling state interest  Non-Fundamental: rational relationship to state interest © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 28 Equal Protection  14th Amendment: A state may not “deny to any person within its jurisdiction the equal protection of the laws.”  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 © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 29 Privacy Rights  Fourth amendment protects against unreasonable search and seizures  Constitutional Protection: Griswold v Connecticut (1965) found a right to personal privacy implied in constitution, expanded in Roe v Wade (1973)  Federal Statutory Protection: USA PATRIOT ACT (2001) HIPAA (1996) (healthcare privacy) © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 30 Appendix to Chapter  Finding Statutory Law United States Code (USC) State Statutes  Finding Administrative Law Code of Federal Regulations (CFR)  Finding Case Law (Case Citations) © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 31 Exhibit 1-A - National Reporter System © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 32 Appendix Reading & Understanding Case Law Legal cases are identified by a “legal citation” (or a “cite”) as the example below: Doe v AOL, LLC, 552 F.3d 1077 (9th Cir 2009) Title: First Party is Plaintiff, second party is Defendant The parties are either italicized or underlined © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 33 Appendix Reading & Understanding Case Law Legal cases are identified by a “legal citation” (or a “cite”) as the example below: Doe v AOL, LLC, 552 F.3d 1077 (9th Cir 2009) Case is found in Federal 3rd Reporter, volume 552, page 1077 © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 34 Appendix Reading & Understanding Case Law Legal cases are identified by a “legal citation” (or a “cite”) as the example below: Doe v AOL, LLC, 552 F.3d 1077 (9th Cir 2009) Case was decided by the Ninth Circuit Court of Appeals, in 2009 © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 35 ... federal law preempts state law © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed... King’s courts used precedent to build the common law © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license... rescission Plaintiffs (injured party initiating the lawsuit), Defendants (allegedly caused injury) © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in