Chapter 4

Constitutional Law

 

Objectives:

1.  Explain basic principles of con law

2.  Describe sources of federal and state power to regulate business

3.  Three levels of scrutiny of government action

4.  Explain effect of First amendment on 1. corp. pol. Speech, 2. comm'l speech; 3. defamation

5.  Due process.  Substantive and procedural

 

I.  Basic Principles

          A.  Federalism.  Separation of powers, enumeration of powers

          B.  Federal Supremacy and Preemption

                   1.  Supremacy clause

                   2.  Federal preemption

                    3.  Silkwood v. Kerr-McGee.  (1984, Justice White)

                   Karen Silkwood worked at nuclear power plant.

                   Contaminated by plutonium.  Died in unrelated car crash.

                   Father sued on behalf of estate.  Got $500k for PI, $5k

                   For property damage, and $10m in punis

                   Company argued punis preempted by federal law.

                   Court held for Silkwood, not exclusively federal.

                   Note:  Movie, "Silkwood," starring Meryl Streep

          C.  Judicial Review

                   1.  Power to rule unconstitutional

                   2.  See chart 4-1

          D.  Separation of Powers

          E.  State Action

                   1.  Actions by state or federal govt., or their subsidiaries

                   2.  Brentwood Academy, p. 70

                   344 high schools form athletic association for Tennessee

                   290 are public (84%)

                   Brentwood sanctioned for undue influence in recruiting players.

                   Four years probation, football and basketball out of post-

                   Season for two years.  $3000 fine.

                   Holding:  State action, due to overwhelming presence of

                   Government.  Brentwood therefore entitled to due

                   Process rights and first amendment rights. 

                   District court found for Brentwood, Sixth Cir. Reversed.

 

II. Powers of Government

          A.  Federal commerce power

                   1.  Congress can regulate interstate commerce

                   2.  States may not unduly burden interstate commerce

          B.  Commerce clause review

                   1.  Invalid if regulation does not affect interstate commerce

                   2.  No connection between means of regulation and valid ends

          C.  State Regulations of Interstate Commerce

                   1.  Balancing test

                             (i) necessity or importance of regulation

                             (ii) burden imposed on interstate commerce

                             (iii) extent of discrimination in favor of local concerns

                   2.  Granholm, interstate wine shipments case

                   Michigan and N.Y> had a law forbidding direct shipment of wine

                   To Consumers.  All had to go through local distributors.

                   Local distributors refused to stock small, out of state wines

                   Held:  Violates dormant commerce clause.  Discriminates

                   Against interstate commerce.  22nd amendment power to

                   Regulate does not include power to discriminate.

          D.  Taxation

                   1.  State may not lay duties on imports or exports

                   2.  Federal fiscal powers

                             (i) Power to tax

                             (ii) Power to spend

                             (iii) Power to borrow and coin money

                             (iv) Power of eminent domain

 

III. Limitations on Government

          A.  See chart, p. 4-2

          B.  Levels of review (see chart, p. 75)

                   (i) Rational relationship

                   (ii) Intermediate (substantial relationship to important obj.)

                   (iii) Strict scrutiny (necessary for a compelling interest)

          C. Contract clause

          D. First Amendment

                   (i) Corporate political speech (protected to some extent)

                   (ii) Commercial speech (intermediate scrutiny)

                             *  Hypo on p. 76

                             *  Thompson, p. 77

                             FDA sought to prohibit ads for drug compounding.

                             Compounded drugs not commercially available

                             All the way up, held unconstitutional restraint on speech

          E. Defamation

                   (i) False, hurtful statement

                   (ii) Malice standard with public figures

          F. Due process limits

                   (i) Procedural due process, governs court hearings, etc.

                   (ii) Substantive due process, fundamental rights, etc.

          G. Equal Protection

                   (i) Same tests as above

                   (ii) No unfair discrimination

                   (iv) Brown v. Bd. Of Education

                             Strikes down school racial segregation on EP grounds

 

Review Questions

          1.  Due process case

 

Case Problems, 4, 5, 7, 9, 13