MEE Things to Memorize Flashcards
Con Law
The Equal Protection Clause of the Fourteenth Amendment provides that “no state shall . . . deny to any person within its jurisdiction the equal protection of the laws.” This clause applies only to states and localities. Laws that make classifications based on age are reviewed under the rational basis standard, a test of minimal scrutiny. A law satisfies the rational basis standard if it is rationally related to a legitimate governmental interest. It is not required that there actually be a link between the means selected by the state and a legitimate state objective. However, the legislature must reasonably believe there is a link. Laws are presumed valid under this standard, and the burden is on the challenger to show that a law is arbitrary or irrational.
The Equal Protection Clause of the Fourteenth Amendment provides that “no state shall . . . deny to any person within its jurisdiction the equal protection of the laws.” This clause applies only to states and localities. Laws that make classifications based on age are reviewed under the rational basis standard, a test of minimal scrutiny. A law satisfies the rational basis standard if it is rationally related to a legitimate governmental interest. It is not required that there actually be a link between the means selected by the state and a legitimate state objective. However, the legislature must reasonably believe there is a link. Laws are presumed valid under this standard, and the burden is on the challenger to show that a law is arbitrary or irrational.
The “congruence and proportionality” test is a way to check if Congress’s actions are appropriate and balanced when enforcing constitutional rights.
In summary, the test applies whenever Congress passes laws to enforce or protect Fourteenth Amendment rights, to ensure those laws are both directly related to and proportionate to the constitutional issues they aim to address.
The federal government may exercise only those powers specifically enumerated by the Constitution. The Fourteenth Amendment, Section Five Enabling Clause permits Congress to pass legislation to enforce the equal protection and due process rights guaranteed by that amendment. However, this clause does not grant Congress the authority to expand those rights or create new ones. In enforcing such rights, there must be a “congruence and proportionality” between the injury to be prevented or remedied and the means adopted to achieve that end. Accordingly, though Congress may override state government action that infringes upon Fourteenth Amendment rights if the “congruence and proportionality” test is satisfied, its enforcement power would not stretch to prohibit a law that does not violate the Constitution. In other words, the proposed law would be both incongruent and disproportionate because there would be no constitutional injury to prevent or remedy.
Objective Memorandum Format
TO: [Recipient]
FROM: Examinee
DATE:
RE: [MPT name]
I. Introduction (CENTERED)
(Explain the purpose of the memo and conclude the issue.)
II. Discussion
Heading 1: (Use objective bolded or underlined headings that address the issues.
Use IRAC: Issue, Rule, Analysis, Conclusion.)
Heading 2:
III. Conclusion
(Restate the conclusion from the Introduction.)
When a parent corporation makes its subsidiary do something that benefits the parent but harms the subsidiary, it’s called self-dealing and can be a breach of loyalty. This is a problem because the parent company is supposed to act in the best interest of the subsidiary, not itself.
A conflict-of-interest transaction, or self-dealing, is when the parent company does business with its subsidiary in a way that benefits the parent. This is not allowed unless it falls under certain protections called “safe harbors.” The business judgment rule, which usually protects companies’ decisions, does not apply in these cases.
There are three ways a conflict-of-interest transaction can be protected:
Board Approval: If the board of directors, without any conflicting interests, knows all the details and approves the transaction.
Shareholder Approval: If the shareholders, without any conflicting interests, know all the details and approve the transaction.
Fairness: If the transaction is fair to the subsidiary at the time it started.
For the fairness test, they check if the transaction’s terms are similar to what could be obtained in a fair, independent deal.
In this situation, the parent company made HomeSolar buy minerals from SolarMaterials Corp., another subsidiary. This is a conflict of interest, so the business judgment rule doesn’t apply.
To be protected, the transaction needs to meet one of the safe harbor exceptions. However, it doesn’t:
The board approval isn’t valid because the parent controls the board, so there’s a conflict of interest.
The prices in the contract are much higher than market prices, and it’s a long-term contract that HomeSolar needs, making it unfair.
Because of these reasons, the parent company likely breached its duty of loyalty to HomeSolar with this contract.
When a parent corporation makes its subsidiary do something that benefits the parent but harms the subsidiary, it’s called self-dealing and can be a breach of loyalty. This is a problem because the parent company is supposed to act in the best interest of the subsidiary, not itself.
A conflict-of-interest transaction, or self-dealing, is when the parent company does business with its subsidiary in a way that benefits the parent. This is not allowed unless it falls under certain protections called “safe harbors.” The business judgment rule, which usually protects companies’ decisions, does not apply in these cases.
There are three ways a conflict-of-interest transaction can be protected:
Board Approval: If the board of directors, without any conflicting interests, knows all the details and approves the transaction.
Shareholder Approval: If the shareholders, without any conflicting interests, know all the details and approve the transaction.
Fairness: If the transaction is fair to the subsidiary at the time it started.
For the fairness test, they check if the transaction’s terms are similar to what could be obtained in a fair, independent deal.
In this situation, the parent company made HomeSolar buy minerals from SolarMaterials Corp., another subsidiary. This is a conflict of interest, so the business judgment rule doesn’t apply.
To be protected, the transaction needs to meet one of the safe harbor exceptions. However, it doesn’t:
The board approval isn’t valid because the parent controls the board, so there’s a conflict of interest.
The prices in the contract are much higher than market prices, and it’s a long-term contract that HomeSolar needs, making it unfair.
Because of these reasons, the parent company likely breached its duty of loyalty to HomeSolar with this contract.
