Chapter 6

Question 1

The First Amendment

Answer 1

• Doesn’t protect defamation, or speech that harms the reputation of another.
• It gives us freedom of speech, the right to peacefully assemble, prohibits the government from aiding the establishment of a religion
• We all individually have these rights. Corporations also has its own rights, including first amendment rights, depending on which kind of speech it is
  o Corporations now have freedom of political speech, meaning the government can’t pass a law to keep them from saying what they want politically
• It also doesn’t protect obscenity (1973 case Miller v. California)
• Protects corporate speech in certain circumstances. It protects corporate political speech to the same extent that it protects individuals’ political speech. The Central Hudson test determines whether the First Amendment protects particular corporate commercial speech.
• Contains the establishment clause, which states that Congress may not make laws respecting an establishment of religion, and the free-exercise clause, which states that Congress may not make laws prohibiting the free exercise of religion.

Question 2

Establishment Clause

Answer 2

One of two provisions in the First Amendment of the US Constitution that protect citizens’ freedom of religion. It prohibits the establishment of a national religion by Congress and the preference of one religion over another or of religion over nonreligious philosophies in general.

Question 3

Free-exercise clause

Answer 3

A clause in the First Amendment of the US Constitution that states that government (state and federal) cannot make a law “prohibiting the free exercise” of religion. This clause is interpreted to include absolute freedom to believe and freedom to act that may face state restriction.

Question 4

The Fourth Amendment

Answer 4

• Guarantees citizens the right to be “secure in their persons, their homes, and their personal property.”
• Prohibits government from conducting unreasonable searches of individuals and seizing their property to use as evidence against them.
• Protects corporations and places of business
  o Also, there is an exception to having to have a search warrant. If an industry has a long history of pervasive regulation, a warrantless search is not unreasonable.
• Probable cause: has to have facts that they know that leads them to believe they have reason to convict them
• Protects both corporations and individuals from unreasonable government searches and seizures. Although administrative searches generally require a warrant, administrative agencies may inspect some industries without a warrant to ensure compliance with industry regulation.

Question 5

The Fifth Amendment

Answer 5

• Protects against self-incrimination, meaning that in a criminal case, the defendant does not have to testify in court as a witness against himself or herself.
• “Plead the fifth” – you don’t have to talk if you thing you might incriminate yourself
• Gives all US citizens protection from the US Government
• Protects against double jeopardy, which means the government cannot try a person more than once for the same crime.
• Corporations don’t receive protection against self-incrimination, though sole proprietors do receive this protection.
• States that government cannot take an individual’s life, liberty, or property without due process of law. There are two types of due process: procedural due process, which focuses on rules for enforcing laws and entitles individuals to notice of legal action against them, and substantive due process, which requires government to have a proper purpose for enacting laws that restrict individuals’ liberty or the use of their property.
• States that if government takes private property for public use, it must compensate the owner. The extent to which some government regulations constitute takings, however, generates much litigation.
• Includes a privilege against self-incrimination, although the provision does not apply to corporations. Only individual citizens and sole proprietorships may exercise this right.
• Guarantees individuals equal protection under the law. Courts use three standard of scrutiny in equal protection cases: (i) strict scrutiny, to analyze government actions that abridge fundamental rights or that include suspect classifications; (ii) intermediate scrutiny, to analyze classifications based on gender or on legitimacy of children; and (iii) the rational-basis test, to analyze classifications involving other matters.

Question 6

Ninth Amendment

Answer 6

Along with the First, Third, Fourth, and Fifth Amendments, this amendment provides individuals with a right to privacy.

Question 7

Fourteenth Amendment

Answer 7

• Applies the due-process clause to state governments and contains the equal protection clause, which prohibits states from denying the equal protection of the laws to any citizens.
• Equal protection clause
  o Protects states from denying equal protection of laws to its citizens
• Makes sure the government doesn’t treat its citizens unfairly or different from one another.

Question 8

Equal protection clause

Answer 8

A clause in the Fourteenth Amendment of the US Constitution that prevents states from denying “the equal protection of the laws” to any citizens. This clause implies that all citizens are created equal.

Question 9

Strict scrutiny

Answer 9

The most exacting standard of review used by the courts in determining the constitutionality of a statute; requires a compelling government interest and the least restrictive means of attaining that objective.

Question 10

Intermediate scrutiny

Answer 10

A standard of review under which a law must be necessary to achieve a substantial, or important, government interest and it must be narrowly tailored to that interest.

Question 11

Rational-basis test

Answer 11

The lowest standard of review; requires a law to be designed to protect a legitimate state interest and be rationally related to that interest.

Question 12

Actus reus

Answer 12

Latin for “guilty act”; a wrongful behavior that is associated with the physical act of a declared crime.

Question 13

Mens rea

Answer 13

Latin for “guilty mind”; the mental state accompanying a wrongful behavior.

• Show intent with witnesses
• The government has to show both

Question 14

Criminal law vs. Civil law

Answer 14

Criminal law- to punish

Civil law- to compensate

Question 15

Liability without fault

Answer 15

A legal term that imposes responsibility for damages regardless of the existence of negligence. Also called strict liability

Question 16

Felony

Answer 16

A serious crime, such as murder, rape, or robbery, that is punishable by imprisonment for more than one year or by death.

Question 17

Misdemeanor

Answer 17

A crime that is less serious than a felony and is punishable by a fine and/or imprisonment for less than one year.

Question 18

Petty offence

Answer 18

A minor crime that is punishable by a small fine and/or imprisonment for less than six months in a jail.

Question 19

White-collar crime

Answer 19

A variety of nonviolent illegal acts against society that occurs most frequently in the business context. 
- How can you be punished for one?
o Impose a fine (most common)
o Community service
o Jail time
o House arrest
o Can’t work in the same job again

Question 20

Bribery

Answer 20

A corrupt and illegal activity in which a person offers, gives, solicits, or receives money, services, or anything of value to gain an illicit advantage.

• Both the person who bribes them and the person who accepts the bribe gets in trouble
• Elements of bribery: offer, give, promise to, or receive something of value
• If you bribe a foreign official, you break a federal law.

Question 21

Extortion

Answer 21

A criminal offense in which a person obtains money, property, and/or services from another by wrongfully threatening or inflicting harm on the other’s person, property, or reputation. Also called blackmail.

Question 22

Fraud

Answer 22

An intentional deception that causes harm to another.

• Intentionally told a lie
• If you think you were telling the truth, you didn’t commit fraud

Question 23

3 elements that the government would have to show to prove someone committed fraud:

Answer 23

1. Intent to deceit
2. Has to be reasonable (example: buying ocean front property in Tennessee is not reasonable)
3. Damages- someone has to have been hurt by what you said

Question 24

Insider trading

Answer 24

(type of fraud) The illegal buying or selling of a corporation’s stock or other securities by corporate insiders, such as officers and directors, in breach of a fiduciary duty of some other relationship of trust and confidence, while in possession of material, nonpublic information about the security.

Question 25

Insider trading case

Answer 25

Scammell

• Buying Marvel’s stock
• Insider trading can be tipping some information
• His girlfriend could also get in trouble because she was an insider who told information
• or it can be security trading by someone who misappropriated information (stealing it)

Question 26

Stock option backdating

Answer 26

The practice of altering the date a stock option was granted, to a usually earlier (but sometimes later) date at which the underlying stock price was lower.
- type of fraud

Question 27

False pretense

Answer 27

The illegal obtaining of another’s property by making a materially false representation on an existing fact, with knowledge of the falsity of the representation and with the intent to defraud.

example: when someone says to give them money in exchange for something and you do, but you never receive anything.

Question 28

Forgery

Answer 28

A criminal falsification by imitating, impersonating, or altering a real document with the intent to deceive or defraud.

• A document that changes the legal rights of another person
• Ex. Drafting a deed and signing someone else’s name when they really didn’t approve of it- changed the person’s legal rights

Question 29

Mail fraud

Answer 29

When you use the mail to defraud someone. When you put a fraudulent document in the mail.
- Government has to show
o Intent to defraud
o Use mail to throw the scheme
- Doesn’t just have to be the postal service; can also be FedEx or UPS

Question 30

Healthcare fraud

Answer 30

• Usually committed by healthcare providers
  o They’re defrauding patients
• They submit fraudulent statements/bills

Question 31

Telemarketer fraud

Answer 31

Usually targets the elderly

Question 32

Bankruptcy fraud

Answer 32

When you default on everything because you owe more than you have.

• When you file for bankruptcy, you have to show what assets you have and what all you owe
• After you file, everything you own is sold to pay off your creditors
• When you file for bankruptcy, if you hide or give some of your assets away, you’re committing bankruptcy fraud
• Say you owe 1,000 people money, and someone comes along that you don’t really owe money to, but they claim that you do. That person is committing bankruptcy fraud

Question 33

Ponzi scheme

Answer 33

A fraudulent operation in which the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors rather than from profit earned by the operator.

Question 34

Defalcation

Answer 34

• Similar to embezzlement
• Misappropriation of money or funds held by an official, trustee, or other fiduciary.

example: if you give money to a fast food worker and she keeps it instead of putting it in the register, she committed defalcation and embezzlement

Question 35

False entry

Answer 35

Making a false entry to the books in order to make the corporation look richer.

• Someone may do this to try to adjust the stock
• If someone is trying to buy it, this would make the price of the company go up

Question 36

Embezzlement

Answer 36

Making a false entry to the books in order to make the corporation look richer.

• Someone may do this to try to adjust the stock
• If someone is trying to buy the company, and someone inside adjusted the stocks, this would make the price of the company go up

Question 37

Larceny

Answer 37

The unauthorized taking and removal of the Personal Property of another by an individual who intends to permanently deprive the owner of it; a crime against the right of possession. Larceny generally refers to nonviolent theft.

Question 38

Computer crime

Answer 38

Crime committed using a computer
- Refers broadly to any wrongful act that is directed against computers, uses computers to commit a crime, or involves computers

Question 39

Corporation

Answer 39

Given to us from the government through our laws
- They are an agreement between the owner and the State
- It is a separate legal entity: pays its own taxes, is a separate legal entity, etc.
o The corporation itself can’t take an action, the people inside it does.
• Because of this, a corporation can’t be held responsible for a crime according to common law (law from a long time ago)
• Now, they can be held accountable for strict liability crimes- ex. Speeding, selling alcohol to a minor, environmental laws
• If the crime can only be punished by jail time, then the corporation can’t be punished for it
Has to show:
• Employee was acting in the scope of their employment
• The person was acting with the purpose of benefiting the corporation
• The act was imputed to the corporation… look in book
- Responsible court doctrine

Question 40

US v. Park Case

Answer 40

• Food contamination
• Government sent him a letter saying he was in violation, but he didn’t do anything about it. The government then sent another letter and he still didn’t do anything, so they charged him with a crime.
• His defense was that he didn’t know (ignorance) and he hired someone else to handle that, but it was still his fault because he was in charge.

Question 41

Hacker

Answer 41

A hacker is person who illegally accesses or enters another person’s or a company’s computer system to obtain information or to steal money.

Question 42

Cyber terrorist

Answer 42

A hacker whose intention is the exploitation of a target computer or network to create a serious impact, such as the crippling of a communications network of the sabotage of a business or organization, which may have an impact on millions of citizens if the terrorist’s attack is successful.

Question 43

Virus

Answer 43

A computer program that rearranges, damages, destroys, or replaces computer data.

Question 44

Vicarious liability

Answer 44

The liability or responsibility imposed on a person, a party, or an organization for damages caused by another; most commonly used in relation to employment, with the employer held vicariously liable for damages caused by its employees.