Chapter 3: Business and the Constitution

Question 1

What happened in Marbury v. Madison (1803)?

Answer 1

The Supreme Court interpreted the Constitution to grant federal courts the power of judicial review - power to declare statute or governmental action unconstitutional and void

• Irony: statute in question gave the Supreme Court special powers

Question 2

What are some federal and state powers?

Answer 2

• Federal government has exclusive power to administer certain national concerns, such as war and currency
• Some powers are shared with the states
• Example: Power to tax, power to spend
• States possess exclusive power to enact laws to protect general welfare, health, and safety

Question 3

What is federal preemption?

Answer 3

If Congress enacts a law on a certain issue, then Congress preempts state regulation of that issue

• Example: Congress enacted the Civil Rights Act of 1964, thus a state cannot enact a law allowing discrimination based on race, religion, or gender

Question 4

What are the three different means-ends test used to review allegedly unconstitutional statute?

Answer 4

1. Rational basis test (minimal scrutiny): If law has rational basis, it will stand
2. Intermediate scrutiny: Law must substantially relate to important governal objectives to stand
3. Strict scrutiny: Law presumed invalid if, on its face, it is based on race, ethnicity, and religion

Question 5

What is the commerce clause?

Answer 5

Supreme Court has applied the power to intrastate commerce when the activity affects interstate commerce

• Gonzales v. Raich emphasizes the far reach of the commerce power

Question 6

What is the First Amendment?

Answer 6

Guarantees freedoms of religion, speech, press, assembly, and petition to individuals and to corporations

Protection has never been afforded to certain classes of speech

• False, lewd, obscene, profane, libelous, and insulting speech is not protected

Question 7

What is commercial speech?

Answer 7

Speech proposing a commercial transaction

• Neither noncommercial expression nor political, thus commercial speech not fully protected

A restriction on commercial speech is valid if it:

1. Seeks to implement a substantial government interest
2. Directly advances the interest, and
3. Is the least restrictive method of achieving the interest

Question 8

What does the Fifth Amendment do concerning Constitutional limitations?

Answer 8

Prohibits federal government from depriving “any person of life, liberty, or property without due process of law”

• Known as the due process clause
• Applied to states through Fourteenth Amendment by process of incorporation

Question 9

What does the due process clause guarantee?

Answer 9

Interpreted liberally to be guarantee of protection from:

1. Unreasonable procedures - procedural due process
2. Unreasonable laws - substantive due process

Protection from government action

• federal funding may create “government” nexus

Question 10

What is the equal protection clause (of Fourteenth Amendment)?

Answer 10

Applies to states and federal government when classifying people

• Basic test: rational basis (minimal)

Prohibits government from treating one person differently than another without reasonable grounds for classifying differently

• Suspect classifications require higher level of scrutiny

Question 11

What is the takings clause?

Answer 11

Phrase “depriving a person… of property” known as the takings clause

Interpreted to require government to pay property owner just compensation in exchange for taking property by eminent domain; public use purpose required

• “Takings” for economic development purpose satisfies public use requirement