Chapter 2

Business
and the
Constitution

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 Functions of the Constitution

(1) establishing a structure for the federal

government and rules for amending the
Constitution;

(2) granting specific powers for the different

branches of government;

(3) providing procedural protections for U.S.

citizens from wrongful government actions.

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 Overview of Federal Powers

Article III Judicial Powers

Judicial review
United States v. Alvarez
Separation of powers
Executive
Legislative
Judicial

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 Standards of Review

The U.S. Supreme Court has established

three standards of review for applying
constitutional law.
Rational basis
Intermediate-level scrutiny
Strict scrutiny
Brown v. Entertainment Merchants Assoc.

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 Supremacy Clause and Preemption

U.S. Constitution provides that valid federal

laws (those made pursuant to Congresss
constitutional authority and that are
constitutionally sound) are always supreme
to any conflicting state law.

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 Commerce Powers

Congresss broadest power is derived from

the Commerce Clause whereby Congress is
given the power to regulate Commerce
among the several states.

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 Tax and Spend Power

Congress has a far-reaching power to tax

the citizenry and to spend the federal
governments money in any way that
promotes the common defense and general
welfare.

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 Necessary and Proper Clause

Congress may also place conditions on

the use of federal money in order to
achieve some public policy objective.

Congress generally cites the Necessary

and Proper Clause as authorization to set
conditions on the spending.

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 First Amendment

Congress shall make no law

That allows government encroachment in

the areas of religion, press, speech,
assembly, and
petition of grievances.

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 Speech by Corporations

Commercial Speech
R.J. Reynolds Tobacco v. Food and Drug
Administration.
Bad Frog Brewery, Inc. v. N.Y. State Liquor
Authority

Political Speech

Which can be regulated?

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 Fourth Amendment

The U.S. Supreme Court has systematically

applied a reasonableness test to define the
limits of when the government may search
without a warrant based on probable cause
that criminal activity is possible.

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 Fifth Amendment

This amendment does not apply to

corporate entities when the government is
seeking certain business records, individual
corporate officers and employees are
entitled to Fifth Amendment protection when
facing a criminal investigation.

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 Due Process Protections

Fifth and Fourteenth Amendments

These clauses protect individuals from

being deprived of life, liberty, or property
without due process of law.

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 Equal Protection under the 14th
Amendment

Fundamentally, the clause guarantees that

the government will treat people who are
similarly situated equally.
What level of scrutiny should be used when a
law discriminates based on a suspect
classification?
How about a semi-suspect classification?

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 Privacy

Although not explicitly mentioned in the

Constitution, privacy rights play a central
role in our legal system.

Common law origins

Statutory law examples

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