Background Facts You Need To Know: TLG has a new client, Clean-n-Shine (Clean), a commercial cleaning company incorporated and located in Maryland, but doing business in all Mid-Atlantic states. Clean uses its line of cleaning products and also sells its products to other businesses via the internet.

Recently, the Delaware legislature enacted a law banning all sales and importation, until further notice, of Clean’s Shine-It floor cleaner in Delaware. It was discovered that one of the ingredients in Shine-It is contaminated and causes a quick-growing mold to spread on surfaces to which it is applied. The mold can be toxic to humans and can cause damage to floors.

Clean wants to expand its products to sell Shine-It in Delaware. If Clean can sell Shine-IT in Delaware, it will increase its income and profits. Clean, therefore, wants to challenge the new law as unconstitutional, and it has consulted TLG for advice.

Winnie and Ralph ask you to prepare a summary report of relevant constitutional law for a meeting with them and Clean’s owners.

Instructions:

Report You Need to Prepare: Prepare a report that addresses the following three questions:

1. Analyze and explain whether the Delaware restriction on the sale of Shine-It violates the Interstate Commerce Clause.

Fully explain your conclusions based on constitutional law.

2. Analyze whether the doctrine of "police powers" derived from the 10th Amendment of the U.S. Constitution, applies to the Delaware law, and if so, why.

Fully explain your conclusions based on constitutional law

3. Discuss why it is important for businesses to understand the impact of the Interstate Commerce Clause and state police powers.

6/15/2021 Introduction to Course - BMGT 380 6980 Business Law I (2215) PLEASE NOTE: The final project in this course is due Saturday of week 8. BMGT 380: Introduction to Business Law This course is designed to enhance your understanding of various legal principles and issues that affect business practices and decisions and their application in business environments. The focus of the course is to identify and examine legal risk and liabilities in operating a business and explore how to minimize and resolve problems associated with risk and liabilities The BMGT 380 course is comprised of five (5) legal themes, including an overview of the legal system, business organizational structures, torts, and product liability, contracts, and agency. _____________ The BMGT 380 course focuses on the story of a company, The Largo Group (TLG), a business consulting and research company based in Maryland that advises and conducts research for potential owners considering start-up businesses and for owners operating new businesses. You and your classmates will be active participants throughout the course in the story acting as consultantemployees of TLG assigned to complete consulting-related and/or research assignments and projects for TLG clients. Your TLG assignments begin with an overview of the legal system which is an important background for business owners. Other TLG assignments will concentrate on four (4) categories of business law principles that present significant risks and liabilities for start-up businesses: (1) tort law, including negligence, premises liability, and product liability, (2) contract law, including the Uniform Commercial Code sales and lease contracts, and econtracts, (3) agency law, and (4) business organizational structures, sometimes called business forms. Starting a new business requires extensive preparation, market research, and examination of the legal environment of business. The success of start-up and new businesses requires identifying the nature and scope of legal risks and liabilities that affect business practices and decisions. Exploring ways to prevent, minimize and resolve risks and liabilities is also important in forming and operating a business. The primary focus for the 380 course and assignments for TLG clients will center on the question: How can a business owner identify and minimize legal risks and liabilities associated with operating a business? Background: The Largo Group (TLG) After graduating with a B.S. in Management, you have been working for TLG for three years as an assistant consultant for Winnie James and Ralph Anders, senior consultants who serve clients in a variety of industries. Your work involves interviewing and meeting with clients, conducting research, writing office memorandums, making recommendations for clients, meeting with Winnie and Ralph with attorney-consultants, and coordinating and/or leading discussions for TLG's in-house professional development seminars for its consultants. https://learn.umgc.edu/d2l/le/content/581773/viewContent/21604566/View 1/4 6/15/2021 Introduction to Course - BMGT 380 6980 Business Law I (2215) Background: Clean-N-Shine Connor, Ali, Madison and Sam are all successful business owners who are friends or professional acquaintances in the business community. Connor has been the project manager for ten years for a construction company owned by a general contractor. Ali has been the Director of Marketing for a Mid-Atlantic-based carpet cleaning company with franchises on the East Coast. Madison owns a mid-sized, successful residential remodeling business. Sam owns a residential cleaning service business. The four recently attended a Chamber of Commerce presentation about “green” businesses. This spurred their interest and they went to dinner following the Chamber event to discuss possible business opportunities. After several meetings, they decided to start a business together. The group decided that a commercial cleaning business would be a good fit for their professional experiences, skills, and interests. They agreed to pursue the possibility of launching a Maryland-based "green" commercial cleaning service business that they would like to name Clean-N-Shine ("Clean"). They are committed to operating the new business as an environmentally responsible company using only chemical-free cleaning products in the new business. The four met several times with a business consultant to complete an analysis of market trends and demands in the cleaning industry and confirm whether Clean would likely be a viable business. The market analysis showed an increased demand and need for environmentally responsible cleaning businesses in the region. Consequently, the group decided to move forward with their idea to establish and market Clean as a green business. The group plans to purchase cleaning supplies from Environmental Pro, Inc. (EPI), a mid-sized manufacturer incorporated in a nearby state, that produces chemical-free environmentally-friendly cleaning products. The four are familiar with the corporation as each has purchased EPI products for their respective current businesses. The four friends intend to resell certain EPI products directly to Clean clients. The Clean group plans to market and advertise their services and re-sell EPI products through print, television, radio media, and via internet sales. Clean will be headquartered in a local shopping center. Clean headquarters will include private business management offices, a reception area, and conference meeting and planning space to which potential and existing customers will be invited to discuss proposals for cleaning jobs, cleaning products, and to complete contracts for sales and services. The business space also will be open to the public to collect information and inquire about Clean services, examine cleaning supply displays, and view photos and exhibits from ongoing and past commercial jobs. The potential Cleaner owners recently attended a start up business seminar sponsored by the local chapter of the Small Business Administration. Following the seminar, the owners began to define the nature and scope of the work necessary to prepare a plan for the start-up business. They realize this process requires time, thoughtful analysis, and clear guidelines. They also recognize the need for professional business consultants, such as TLG, to guide their startup for Clean. Consequently, the four have hired TLG to advise and guide them through the start-up process for Clean. Clean Owner Profiles: Connor: He wants an initial 30%-40% interest in Clean but wants to limit his future capital commitment until he is certain the business is operating smoothly and profitably. He does, however, want the option to acquire others’ interests if they die or leave the business for any reason. He also wants to take out https://learn.umgc.edu/d2l/le/content/581773/viewContent/21604566/View 2/4 6/15/2021 Introduction to Course - BMGT 380 6980 Business Law I (2215) money from the business, in the form of salary, benefits, expenses, and/ dividends, as appropriate, as soon as Clean has a healthy net profit margin. Connor is most concerned about liability, and although he trusts the other owners as “straight shooters” and successful business persons, he is uneasy about working with a group of investors with whom he has no previous business connections. He wants to limit his liability in the business to no more than his capital contribution, and prefers complete protection. If possible, he wants Key Man Insurance for the owners so all will have protection if one owner can no longer contribute to business for any reason. Connor wants a managerial position so he can make decisions for day-to-day operations. He believes he is the best person to run the business as he currently owns a maid service and understands how to run a successful cleaning service business. Ali: Ali wants a 25% interest and prefers to minimize additional investments to protect her cash assets needed for her other businesses. Her main goal is to realize a return on her investment as quickly as possible. Ali wants to minimize her personal liability and protect her interests in the event of bankruptcy or death of any of the other owners. Ail wants to participate in long-term business decisions, and in major decisions about spending and organizational commitments, but she does not want to be involved in day-to-day business activities. She favors hiring a general manager to run the business, preferably one with commercial cleaning experience. Madison: Madison initially wants to invest up to 40% and is willing to invest another 5% because she knows start-up businesses often need more capital. She favors a larger, rather than a smaller, stake in the business. She wants to take out as much money as possible from the business, as soon as financially possible. Madison wants to minimize personal liability, as well as liability for the business. She realizes the future of the business is uncertain and she wants maximum protection again all pitfalls. Madison is willing to be involved in day-to-day business operations and has the time to do so because her other business is running smoothly with competent managers. She wants to play a key role, along with the other owners, in establishing the structure, business environment, and culture for Clean. However, she believes that a skilled general manager with commercial cleaning experience would be optimal for the business. Sam: Sam is willing to commit to an investment of 51% interest in Clean, but is agreeable to a lesser interest. https://learn.umgc.edu/d2l/le/content/581773/viewContent/21604566/View 3/4 6/15/2021 Introduction to Course - BMGT 380 6980 Business Law I (2215) Sam wants to minimize his personal liability and prefers to limit it to his capital investment but is willing to negotiate. With a maximum interest of 51%, Sam wants complete control over business operations; even with a lesser interest, he wants a strong managerial position. Sam wants all owners with a minority interest to be silent in day-to-day management of Clean. https://learn.umgc.edu/d2l/le/content/581773/viewContent/21604566/View 4/4 6/13/2021 Winning Discussion Responses - BMGT 380 6980 Business Law I (2215) Following are requirements and examples of "winning", proper assignment responses. Requirements: Substantive Critical Thinking Discussion Assignments Written discussion assignments must: be in paragraph format, correct and clear in grammar, syntax, spelling, punctuation; must respond directly to the question(s) asked and respond to all parts of the assignment; reflect substantive, thoughtful, in depth critical thinking; offer specific, clear, relevant examples as needed to clarify and justify positions; use APA citation style for attributions to print or electronic resources used in analyses. Discussion responses typically require that you take a clear position on an issue, then explain, justify and support your position logically, comprehensively and in depth. Examples of Written Discussion Assignment Analyses - re: law and ethics Hypothetical Scenario: You are the CEO of Luck, Inc., a mid-size US home goods manufacturing corporation that earned profits of $8 million in 2017, an increase of 20% over 2016 profits. $4 million of the increased profits will be invested in the company to cover increased operating costs for Luck in 2018. You must decide what to do with the remaining $4 million and make a recommendation to the Board of Directors. You have 2 choices, and must choose one option below; the $4 million dollars cannot be divided between both options. 1. use the increased profits to develop a new and comprehensive corporate social responsibility (CSR) program, or 2. invest the increased profits in new research and development for the company A. Which option would you recommend to the Board and why? Explain, justify your answer comprehensively. B. Discuss the legal implications, if any, of establishing a "green" CSR program. Explain, justify your answer comprehensively. Superior Example: Substantive, justified, comprehensive, in depth analysis using APA citation style: I believe that CSR programs can be profitable for contemporary businesses, and for Luck, Inc., thus I would recommend that Luck invest the $4 million in a CSR program. In the book, Corporate Social Responsibility Does Not Pay, the author makes a strong argument that CSR is not profitable for most companies. (Nelling, 2009). However, I believe that if Luck carefully researches, plans and implements a CSR program that is closely identified with its products, the CSR program will enhance its public image and brand recognition and therefore, increase profitability. Specifically, I recommend that Luck develop and implement a “green” program. Society and consumers are increasingly focused on solutions to environmental problems and participating in green programs. More specifically, in her article, “Going Green in Today’s Marketplace”, author Nora Black https://learn.umgc.edu/d2l/le/content/581773/viewContent/21604569/View 1/3 6/13/2021 Winning Discussion Responses - BMGT 380 6980 Business Law I (2215) states, “ … green building is forecast to grow from a $7.4 billion market last year to $38 billion by 2019.” (Black, 2017, p.10). These figures are a great incentive for companies in the home goods market to invest dollars now to become a part of a new and growing market that seems to be of benefit not only to society but to the bottom line of any forwarding thinking business. A green CSR program for Luck could include a corporate program to sponsor and donate funds to reforesting programs that replace depleted resources, and donate in-store wood scraps to schools and senior centers. These components of the Luck CSR program are directly related to its product and thus, feasible and closely associated and recognizable with its public image and brand. The CSR program could also include company recycling, in-store energy conservation, reduction of hazardous waste materials by using responsible, safe disposal processes, and use of sustainable products as much as possible. Also, Luck could increase public awareness of its CSR programs by sponsoring green education programs in the community and local schools, and sponsoring semiannual community “clean-up and recycle” programs. Since many companies are going green and they use that information in their advertising and promotion it has become a deciding factor that many environmentally conscious customers take into account when choosing where to spend their money. According to Will Beck, in his article “Do Businesses Need to be Green?” there has been an upswing in customer demand for green and environmentally friendly products and services so that signs point to a profitable future for those companies willing to responsibly expend funds now via CSR programs to increase profits later. (Beck, 2012, p.7) Also, a green program likely would exceed Luck's compliance with any existing state and federal environmental regulations, and possibly position Luck to easily comply with any future more extensive state and federal environmental regulations. For example, EPA regulations are increasing more rapidly than regulations for any other federal regulatory agency, with business regulations increasing at 10-12% annually at both the state and federal levels. (Barton, 2012, p. 33). Thus, Luck could be well-positioned to comply with future regulations without undue additional cost. Reference List: Beck.......etc. Black....., etc Poor Example: Analysis that lacks substance, justification and support, depth, and is not comprehensive – would not earn points: As our readings told us, CSR programs are not profitable for businesses, so it does not make sense to invest the $4 million in a CSR program. Most consumers are not very aware of a company’s CSR programs and it could require a big investment to advertise the CSR program to increase awareness and so a CSR program would not be cost effective. Luck should invest the $4 million in research and development for new products. This will increase business, and thus profitability. CSR programs are not illegal. Requirements: Substantive Interactive Discussion with Classmates Discussion responses to others should: provides additional information to add value to the discussion https://learn.umgc.edu/d2l/le/content/581773/viewContent/21604569/View 2/3 6/13/2021 Winning Discussion Responses - BMGT 380 6980 Business Law I (2215) contain citations or an explanation of your source of knowledge from the text or your professional/personal experience expand on, or clarify, previous comments from others support your position with concepts, or an explanation of your source of knowledge from the text or your professional/personal experience explain specific reasons for agreeing/disagreeing with another's posting in a persuasive, respective fashion promote further interactive discussion by asking provocative questions Examples of interactive discussion with classmates Hypothetical Scenario: Review the memorandum, “International vs. Domestic Hiring and Recruitment” that discusses Company A’s new international hiring and recruitment policy that replaces its domestic hiring and recruitment policy. Do you believe the new international hiring and recruitment policy is beneficial or detrimental to Company A? Why or why not? Superior Example: Substantive, comprehensive, justified Interactive response that promotes further discussion: Hi, Susie and Classmates: You clearly explained why you believe Company A's international hiring and recruitment policy is detrimental to the company. However, I disagree with this position. Yes, A's new hiring policy is more costly in the short term, but I believe it is positive for the company and, in the long term, financially efficient. The company I work for is not an international one, but 5 years ago it changed from a regional recruitment policy to a national one. This enabled the company to cast the net more widely to hire more qualified, experienced personnel which saved on training costs. Also, according to a 2016 internal study, employee retention in my company increased 25% under the new national hiring policy as my company was able to hire employees who were a better fit in skills, expertise, professional goals and work style. Hiring and training are costly for any company, so increasing employee retention is inevitably a cost savings for businesses. I believe similar beneficial changes in reduced training costs and savings resulting from employee retention could apply to A’s new international hiring policy. What do you think? Poor Example: Inadequate response that is not substantive, comprehensive or justified, and does not promote further discussion - would not earn points: Hi, Susie: I agree completely with your response and think A's hiring policy is too expensive. A Board of Directors would not agree to this more expensive policy, and if they did, it would be unethical. https://learn.umgc.edu/d2l/le/content/581773/viewContent/21604569/View 3/3 6/15/2021 BMGT 380 6980 Business Law I (2215) - BMGT 380 6980 Business Law I (2215) BMGT 380 6980 Business Law I (2215) How to Support Arguments & Positions Supporting positions and conclusions Introduction Many papers that you write in college will require you to take a position or make a conclusion. You must take a position on the subject you are discussing and support that position with supporting evidence. It’s important that you use the right kind of support, that you use it effectively, and that you have an appropriate amount of it. If your professor has told you that you need more analysis, suggested that you’re “just listing” points or giving a “laundry list,” or asked you how certain points are related to your argument, it may mean that you can do more to fully incorporate your supporting evidence into your argument. Grading feedback comments like “for example?,” “proof?,” “go deeper,” or “expand” suggest that you may need more evidence. What are primary and secondary sources? Distinguish between primary and secondary sources of evidence (in this case, “primary” means “first” or “original,” not “most important”). Primary sources include original documents, photographs, interviews, and so forth. Secondary sources present information that has already been processed or interpreted by someone else. For example, if you are writing a paper about the movie “The Matrix,” the movie itself, an interview with the director, and production photos could serve as primary sources of evidence. A movie review from a magazine or a collection of essays https://learn.umgc.edu/d2l/le/content/581773/printsyllabus/PrintSyllabus 1/7 6/15/2021 BMGT 380 6980 Business Law I (2215) - BMGT 380 6980 Business Law I (2215) about the film would be secondary sources. Depending on the context, the same item could be either a primary or a secondary source: if I am writing about people’s relationships with animals, a collection of stories about animals might be a secondary source; if I am writing about how editors gather diverse stories into collections, the same book might now function as a primary source. Where can I find evidence? The best source for supporting evidence is the assigned resources for each week in the classroom. Do not use outside resources unless instructed to do so by your professor. Other outside sources of information and tips about how to use them in gathering supporting evidence are listed below. Print and electronic sources Books, journals, websites, newspapers, magazines, and documentary films are some of the most common sources of evidence for academic writing. Interviews An interview is a good way to collect information that you can’t find through any other type of research and can provide an expert’s opinion, biographical or first-hand experiences, and suggestions for further research. Consult with your professor before conducting interviews or using interviews in support of positions. Personal or professional experience Using your own personal or professional experiences can be a powerful way to appeal to your readers. You should, however, use these experiences only when it is appropriate to your topic, your writing goals, and your audience. Personal or professional experience should not be the only forms of supporting evidence in a paper. https://learn.umgc.edu/d2l/le/content/581773/printsyllabus/PrintSyllabus 2/7 6/15/2021 BMGT 380 6980 Business Law I (2215) - BMGT 380 6980 Business Law I (2215) Using evidence in an argument Does evidence speak for itself? Absolutely not. After you introduce supporting evidence into your writing, you must explain why and how this evidence supports your position. You have to explain the significance of the supporting evidence and its function in your paper. What turns a fact or piece of information into supporting evidence is the connection it has with a larger claim or argument: evidence is always evidence for or against something, and you have to make that link clear. As writers, we sometimes assume that our readers already know what we are talking about; we may be wary of elaborating too much because we think the point is obvious. But readers can’t read our minds: although they may be familiar with many of the ideas we are discussing, they don’t know what we are trying to do with those ideas unless we indicate it through explanations, organization, transitions, and so forth. Try to spell out the connections that you were making in your mind when you chose your evidence, decided where to place it in your paper, and drew conclusions based on it. Remember, you can always cut prose from your paper later if you decide that you are stating the obvious. Always write as if the reader knows absolutely nothing about the topic. Here are some questions you can ask yourself about a specific bit of supporting evidence: OK, I’ve just stated this point, but so what? Why is it interesting? Why should anyone care? What does this information imply? What are the consequences of thinking this way or looking at a problem this way? I’ve just described what something is like or how I see it, but why is it like that? I’ve just said that something happens—so how does it happen? How does it come to be the way it is? Why is this information important? Why does it matter? How is this idea related to my thesis? What connections exist between them? Does it support my thesis? If so, how does it do that? https://learn.umgc.edu/d2l/le/content/581773/printsyllabus/PrintSyllabus 3/7 6/15/2021 BMGT 380 6980 Business Law I (2215) - BMGT 380 6980 Business Law I (2215) Can I give an example to illustrate this point? Answering these questions may help you explain how your evidence is related to your overall argument. How can I incorporate evidence into my paper? There are many ways to present supporting evidence. Often, your evidence will be included as text in the body of your paper, as a paraphrase, or summary. Sometimes you might include graphs, charts, or tables; excerpts from an interview; or photographs or illustrations with accompanying captions. Quotations DO NOT USE quotations in assignments in this course. The only exception is if you are referring to an original, one-ofkind document, such as the U.S. Constitution. Paraphrasing When you paraphrase, you take a specific section of a text and put it into your own words. Putting it into your own words doesn’t mean just changing or rearranging a few of the author’s words: to paraphrase well and avoid plagiarism, try setting your source aside and restating the sentence or paragraph you have just read, as though you were describing it to another person. Paraphrasing is different than summary because a paraphrase focuses on a specific, brief bit of text (like a phrase, sentence, or paragraph). You’ll need to indicate when you are paraphrasing someone else’s text by citing your source correctly, just as you would with a quotation. Refer to the module in Content, “How to Use APA” for instructions and examples for proper APA citation. When might you want to paraphrase? Paraphrase when you want to introduce a writer’s position. https://learn.umgc.edu/d2l/le/content/581773/printsyllabus/PrintSyllabus 4/7 6/15/2021 BMGT 380 6980 Business Law I (2215) - BMGT 380 6980 Business Law I (2215) Paraphrase when you are supporting a specific point and need to draw on a certain place in a text that supports your position—for example, when one paragraph in a source is especially relevant. Paraphrase when you want to present a writer’s view on a topic that differs from your position or that of another writer; you can then refute writer’s specific points in your own words after you paraphrase. Paraphrase when you want to comment on a particular example that another writer uses. Paraphrase when you need to present information that’s unlikely to be questioned. Summary When you summarize, you are offering an overview of an entire text, or at least a lengthy section of a text. Summary is useful when you are providing background information, grounding your own argument, or mentioning a source as a counterargument. A summary is less nuanced than paraphrased material. It can be the most efficient and effective way to incorporate several sources. When you are summarizing someone else’s argument or ideas, be sure this is clear to the reader and cite your source appropriately. Statistics, data, charts, graphs, photographs, illustrations Sometimes the best evidence for your argument is hard facts or visual representation of a fact. This type of evidence can be a solid backbone for your argument, but you still need to create context for your reader and draw the connections you want him or her to make. Remember that statistics, data, charts, graph, photographs, and illustrations are all open to interpretation. Guide the reader through the interpretation process. Again, always, cite the origin of your evidence if you didn’t produce the material you are using yourself. Do not overuse this type of supporting evidence. Do I need more supporting evidence? Let’s say that you’ve identified some appropriate sources, found some evidence, explained to the reader how it fits into your overall argument, incorporated it into your draft effectively, and cited your sources. How do you tell whether you’ve https://learn.umgc.edu/d2l/le/content/581773/printsyllabus/PrintSyllabus 5/7 6/15/2021 BMGT 380 6980 Business Law I (2215) - BMGT 380 6980 Business Law I (2215) got enough evidence and whether it’s working well in the service of a strong argument or analysis? Here are some techniques you can use to review your draft and assess your use of evidence. Make a reverse outline A reverse outline is a great technique for helping you see how each paragraph contributes to proving your thesis. When you make a reverse outline, you record the main ideas in each paragraph in a shorter (outline-like) form so that you can see at a glance what is in your paper. The reverse outline is helpful in at least three ways. First, it lets you see where you have dealt with too many topics in one paragraph (in general, you should have one main idea per paragraph). Second, the reverse outline can help you see where you need more evidence to prove your point or more analysis of that evidence. Third, the reverse outline can help you write your topic sentences: once you have decided what you want each paragraph to be about, you can write topic sentences that explain the topics of the paragraphs and state the relationship of each topic to the overall thesis of the paper. Play devil’s advocate or doubt everything This technique may be easiest to use with a partner. Ask your friend to take on one of the roles above, then read your paper aloud to him/her. After each section, pause and let your friend interrogate you. If your friend is playing devil’s advocate, he or she will always take the opposing viewpoint and force you to keep defending yourself. If your friend is a doubter, he or she won’t believe anything you say. Justifying your position verbally or explaining yourself will force you to strengthen the evidence in your paper. If you already have enough evidence but haven’t connected it clearly enough to your main argument, explaining to your friend how the evidence is relevant or what it proves may help you to do so. This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 4.0 License. The Writing Center, University of North Carolina at Chapel Hill https://learn.umgc.edu/d2l/le/content/581773/printsyllabus/PrintSyllabus 6/7 6/15/2021 https://learn.umgc.edu/d2l/le/content/581773/printsyllabus/PrintSyllabus BMGT 380 6980 Business Law I (2215) - BMGT 380 6980 Business Law I (2215) 7/7 6/15/2021 Learning Activity W1 - BMGT 380 6980 Business Law I (2215) - UMGC Learning Management System BMGT 380 Rubric for Weekly Learning Activities - 5 pts each - Fall 2020 Course: BMGT 380 6980 Business Law I (2215) Criteria Equivalent to an A Equivalent to a B Equivalent to a C Equivalent to a D -F Criterion Score Paragraph Lato (Recom… https://learn.umgc.edu/d2l/lms/dropbox/user/folder_submit_files.d2l?db=1104668&grpid=0&isprv=0&bp=0&ou=581773 1/11 6/15/2021 Learning Activity W1 - BMGT 380 6980 Business Law I (2215) - UMGC Learning Management System ( Criteria Equivalent to an A Equivalent to a B Equivalent to a C Equivalent to a D -F Learning Activity Analysis 3 points 2.6 points 2.3 points 1.8 points Demonstrates critical analysis, in-depth and comprehensive development of concepts, accurately identifies issues and their application to facts. Shows evidence of having read course materials and applying them to support conclusions. 2.7 - 3.0 Demonstrates generally superior critical analysis, relatively indepth and comprehensive development of concepts, accurately identifies most not all - issues and their application to facts. Some evidence of having read course materials and applying them to support conclusions. Additional development and more comprehensive analysis needed. 2.4 - 2.6 Demonstrates some to minimal critical analysis and insight into concepts and issues, and their application to facts. Analysis is largely superficial in one/more areas and sufficient only to meet minimum requirements of learning activity with little evidence of insight and/or support for conclusions. 2.1 - 2.3 Does not meet minimal requirements for assignment. Little to no critical analysis, comprehensive development of concepts and issues and their application to facts. Little to no support for conclusions. Inferior in all areas. 0 - 1.8 Criterion Score 19px https://learn.umgc.edu/d2l/lms/dropbox/user/folder_submit_files.d2l?db=1104668&grpid=0&isprv=0&bp=0&ou=581773 /3 2/11 6/15/2021 Learning Activity W1 - BMGT 380 6980 Business Law I (2215) - UMGC Learning Management System Criteria Equivalent to an A Equivalent to a B Equivalent to a C Equivalent to a D -F Writing Clarity & Mechanics 0.5 points 0.44 points 0.39 points 0.34 points Demonstrates clear, organized, specific comments presented in an easy to read style that is free of grammatical, spelling, and mechanical errors. .45 - .50 Demonstrates generally clear, organized, specific comments with minor errors in grammar, and/or spelling, and or mechanics. .40 - .44 Demonstrates generally satisfactory clear, specific comments with errors in grammar, and/or spelling, and/or mechanics. .35 - .39 Presentation lacks organization, clarity, accuracy with little to no evidence of proofreading or attempt at applying proper writing mechanics. 0 - .34 APA Usage 1 point 0.89 points 0.79 points 0.69 points Posts contain the appropriate number of APA intext citations in proper format with Reference list; in-text citations and Reference list match; no errors are present. .90 - 1.0 Attempts intext citations and Reference list but errors in formatting exist; paraphrasing is not accurate or in-text citations are omitted where citations are warranted. .80 - .89 Attempts intext citations or Reference list but omits one or the other. Intext citations or Reference list reflect significant errors or citations omitted where citations are warranted. .70 - .79 No evidence of APA usage. 0 - .69 https://learn.umgc.edu/d2l/lms/dropbox/user/folder_submit_files.d2l?db=1104668&grpid=0&isprv=0&bp=0&ou=581773 Criterion Score / 0.5 /1 3/11 6/15/2021 Learning Activity W1 - BMGT 380 6980 Business Law I (2215) - UMGC Learning Management System Criteria Equivalent to an A Equivalent to a B Equivalent to a C Equivalent to a D -F Adheres to Instructions 0.5 points 0.45 points 0.39 points 0.34 points Fully follows instructions, attempts all required parts of learning activity. .45 - .50 Follows most, but not all, instructions, and/or attempts most, but not all, required parts of learning activity. .40 - .44 Fails to follow approximately half of instructions, and/or fails to attempt approximately half of required parts of learning activity. .35 - .39 Fails to follow most or all instructions, and/or fails to attempt most or all required parts of learning activity. 0 - .34 Criterion Score Total / 0.5 /5 Overall Score Equivalent to an A Equivalent to a B Equivalent to a C Equivalent to a D - F 4.5 points minimum 4 points minimum 3.5 points minimum 0 points minimum https://learn.umgc.edu/d2l/lms/dropbox/user/folder_submit_files.d2l?db=1104668&grpid=0&isprv=0&bp=0&ou=581773 4/11 6/15/2021 Learning Activity W1 - BMGT 380 6980 Business Law I (2215) - UMGC Learning Management System https://learn.umgc.edu/d2l/lms/dropbox/user/folder_submit_files.d2l?db=1104668&grpid=0&isprv=0&bp=0&ou=581773 5/11 6/15/2021 Learning Activity W1 - BMGT 380 6980 Business Law I (2215) - UMGC Learning Management System https://learn.umgc.edu/d2l/lms/dropbox/user/folder_submit_files.d2l?db=1104668&grpid=0&isprv=0&bp=0&ou=581773 6/11 6/15/2021 Learning Activity W1 - BMGT 380 6980 Business Law I (2215) - UMGC Learning Management System https://learn.umgc.edu/d2l/lms/dropbox/user/folder_submit_files.d2l?db=1104668&grpid=0&isprv=0&bp=0&ou=581773 7/11 6/15/2021 Learning Activity W1 - BMGT 380 6980 Business Law I (2215) - UMGC Learning Management System https://learn.umgc.edu/d2l/lms/dropbox/user/folder_submit_files.d2l?db=1104668&grpid=0&isprv=0&bp=0&ou=581773 8/11 6/15/2021 Learning Activity W1 - BMGT 380 6980 Business Law I (2215) - UMGC Learning Management System https://learn.umgc.edu/d2l/lms/dropbox/user/folder_submit_files.d2l?db=1104668&grpid=0&isprv=0&bp=0&ou=581773 9/11 6/15/2021 Learning Activity W1 - BMGT 380 6980 Business Law I (2215) - UMGC Learning Management System https://learn.umgc.edu/d2l/lms/dropbox/user/folder_submit_files.d2l?db=1104668&grpid=0&isprv=0&bp=0&ou=581773 10/11 6/15/2021 Learning Activity W1 - BMGT 380 6980 Business Law I (2215) - UMGC Learning Management System https://learn.umgc.edu/d2l/lms/dropbox/user/folder_submit_files.d2l?db=1104668&grpid=0&isprv=0&bp=0&ou=581773 11/11 https://www.diffen.com/difference/Civil_Law_vs_Criminal_Law Compare Anything ›› Civil Law vs. Common Law GO Civil Law vs. Criminal Law Diffen › Legal Civil law and criminal law are two broad and separate entities of law with separate sets of laws and punishments. According to William Geldart, Introduction to English Law 146 (D.C.M. Yardley ed., 9th ed. 1984), "The difference between civil law and criminal law turns on the difference between two different objects which law seeks to pursue redress or punishment. The object of civil law is the redress of wrongs by compelling compensation or restitution: the wrongdoer is not punished; he only suffers so much harm as is necessary to make good the wrong he has done. The person who has suffered gets a definite benefit from the law, or at least he avoids a loss. On the other hand, in the case of crimes, the main object of the law is to punish the wrongdoer; to give him and others a strong inducement not to commit same or similar crimes, to reform him if possible and perhaps to satisfy the public sense that wrongdoing ought to meet with retribution.” Examples of criminal law include cases of burglary, assault, battery and cases of murder. Examples where civil law applies include cases of negligence or malpractice. Comparison chart Civil Law Definition Civil law deals with the disputes between individuals, organizations, or between the two, in which compensation is awarded to the victim. Purpose To deal with the disputes between individuals, organizations, or between the two, in which compensation is awarded to the victim. Criminal Law Criminal law is the body of law that deals with crime and the legal punishment of criminal offenses. To maintain the stability of the state and society by punishing offenders and deterring them and others from offending. × Civil Law Case filed by Private party Decision Defendant can be found liable or not liable, the judge decides this. Standard of proof "Preponderance of evidence." Claimant must produce evidence beyond the balance of probabilities. Burden of proof Claimant must give proof however, the burden may shift to the defendant in situations of Res Ipsa Loquitur (The thing speaks for itself). Criminal Law Government Defendant is convicted if guilty and acquitted if not guilty, the jury decide this. "Beyond a reasonable doubt": "Innocent until proven guilty": The prosecution must prove defendant guilty. Type of Compensation (usually financial) punishment for injuries or damages, or an injunction in nuisance. A guilty defendant is subject to Custodial (imprisonment) or Noncustodial punishment (fines or community service). In exceptional cases, the death penalty. Examples Landlord/tenant disputes, divorce proceedings, child custody proceedings, property disputes, personal injury, etc. Theft, assault, robbery, trafficking in controlled substances, murder, etc. Appeals Either party (claimant or defendant) can appeal a court's decision. Only the defendant may appeal a court's verdict. The prosecution is not allowed to appeal. Commencement State/People/Prosecution by of proceedings summons or indictment Cases By way of pleadings, Representatives of the state, Prosecutor, Attorney General. $188 $94 SHOP NOW $211 $105.50 SHOP NOW $138 $69 SHOP NOW $180 $90 SHOP NOW × In civil law, a case commences when a complaint is filed by a party, which may be an individual, an organization, a company or a corporation, against another party. The party complaining is called the plaintiff and the party responding is called the defendant and the process is called litigation. In civil litigation, the plaintiff is asking the court to order the defendant to remedy a wrong, often in the form of monetary compensation to the plaintiff. In contrast, in criminal law, the case is filed by the government, usually referred to as the State and represented by a prosecutor, against a defendant. An individual can never file criminal charges against another person: an individual may report a crime, but only the government can file criminal charges in court. Crimes are activities punishable by the government and are divided into two broad classes of seriousness: felonies having a possible sentence of more than one year incarceration and misdemeanors having a possible sentence of one year or less incarceration. Apply Now › Punishment One of the notable differences between civil law and criminal law is the punishment. In case of criminal law a person found guilty is punished by incarceration in a prison, a fine, or in some occasions death penalty. Whereas, in case of civil law the losing party has to reimburse the plaintiff, the amount of loss which is determined by the judge and is called punitive damage. A criminal litigation is more serious than civil litigation, so the criminal defendants have more rights and protections than a civil defendant. Burdens of proof In case of criminal law, the burden of proof lies with the government in order to prove that the defendant is guilty. On the other hand, in case of civil law the burden of proof first lies with the plaintiff and then with the defendant to refute the evidence provided by the plaintiffs. In case of civil litigation if the judge or jury believes that more than 50% of the evidence favors the plaintiffs, then plaintiffs win, which is very low as compared to 99% proof for criminal law. In case of criminal law, defendant is not declared guilty unless approximately more than 99% proof is against him. × -50% -50% RB3612 TEAM WANG X RAY-BAN GOLD $138 -50% RB8060 LIGHT BROWN $211 $105.50 $69 SHOP NOW SHOP NOW RB3540 BRONZECOPPER $188 $94 SHOP NOW How the system works One can say that criminal law deals with looking after public interests. It involves punishing and rehabilitating offenders, and protecting the society. The police and prosecutor are hired by the government to put the criminal law into effect. Public funds are used to pay for these services. If suppose you are the victim of the crime, you report it to the police and then it is their duty to investigate the matter and find the suspect . In most cases, if a charge has been properly presented and if there is evidence supporting it, the Government, not the person who complains of the incident, prosecutes it in the courts. This is called a system of public prosecutions. On the other hand, civil law is about private disputes between individuals or between an individual and an organization or between organizations. Civil law deals with the harm, loss, or injury to one party or the other. A defendant in a civil case is found liable or not liable for damages, while in a criminal case defendant may be found guilty or not. References Wikipedia: Civil law (common law) Related Comparisons Civil Law vs Common Federal vs State Law Law Common Law vs Procedural Law vs Substantive Law Attorney Fees vs Costs Lawyer vs Solicitor Statutory Law Comments: Civil Law vs Criminal Law × 181 Comments Sort by Newest Add a comment... Willard Dhiccoz well said Like · Reply · 1y Sir-Dunamis Japhet Mutembei Kalenywa Thank you Like · Reply · 1y Shubh Parmar thenx Like · Reply · 1y Mujeeb Ur Rahman Thanks ....well explaination Like · Reply · 2y Khan Janbaz appreciated ... Like · Reply · 2y Pressplay Pressplayplay This is what they are without too much writings. Well composed. Tnx. Like · Reply · 1 · 2y Kimberley Kimmy well said...thanks Like · Reply · 1 · 2y Olgar Matiso WORTHY Like · Reply · 1 · 2y Prasad Mulupuri Thanks. Like · Reply · 2y Mlungisi Masikane Mzukulu KaGalofu thank you sir we appreciate your good explanation Like · Reply · 2y Jodahsing Sitara Mrs.B.Jodahsing Prinicipal financial operational officer of Ministry Of finance now student at utm is praparing for the forth coming exams for diploma in financial management very useful information good comparison of criminal and civil law thks Like · Reply · 3y Mau Guingab Thanks for the info Like · Reply · 3y Muhammed Ado nice Like · Reply · 1 · 3y Generosa Genosa Very useful. Informative. Like · Reply · 3y Farzana Haque tnx Like · Reply · 3y Load 10 more comments Facebook Comments Plugin × Anonymous comments (5) February 25, 2012, 7:03am Thank you so much. This helped me a lot in my legal assignment. — 211.?.?.106 May 27, 2012, 5:37am Your a life saver ;) thanks, now i know what my crazy teacher was on about :P — 116.?.?.56 June 13, 2013, 3:53pm Very clear explanation, even for non English speakers. He did not play by heavy English terms and sentences like others. I want him to represent me. Thanks — 107.?.?.53 September 12, 2013, 11:51am This video has told me alot about this matter — 217.?.?.196 November 10, 2009, 11:39am Hey Good work. Useful info. Many thanks. — 220.?.?.221 About Diffen © All rights reserved. How to Cite Log in / Register Terms of use | Privacy policy Request a Comparison Submit Feedback Stay connected AN ELITE CAFEMEDIA PUBLISHER × 6/13/2021 https://saylordotorg.github.io/text_government-regulation-and-the-legal-environment-of-business/s07constitutional-law-and-us-comm.html Constitutional Law and US Commerce Previous Chapter Table of Contents Next Chapter Chapter 4 Constitutional Law and US Commerce LEARNING OBJECTIVES After reading this chapter, you should be able to do the following: 1. Explain the historical importance and basic structure of the US Constitution. 2. Know what judicial review is and what it represents in terms of the separation of powers between the executive, legislative, and judicial branches of government. 3. Locate the source of congressional power to regulate the economy under the Constitution, and explain what limitations there are to the reach of congressional power over interstate commerce. 4. Describe the different phases of congressional power over commerce, as adjudged by the US Supreme Court over time. 5. Explain what power the states retain over commerce, and how the Supreme Court may sometimes limit that power. 6. Describe how the Supreme Court, under the supremacy clause of the Constitution, balances state and federal laws that may be wholly or partly in conflict. 7. Explain how the Bill of Rights relates to business activities in the United States. The US Constitution is the foundation for all of US law. Business and commerce are directly affected by the words, meanings, and interpretations of the Constitution. Because it speaks in general terms, its provisions raise all kinds of issues for scholars, lawyers, judges, politicians, and commentators. For example, arguments still rage over the nature and meaning of “federalism,” the concept that there is shared governance between the states and the federal government. The US Supreme Court is the ultimate arbiter of those disputes, and as such it has a unique role in the legal system. It has assumed the power of judicial review, unique among federal systems globally, through which it can strike down federal or state statutes that it believes violate the Constitution and can even void the president’s executive orders if they are contrary to the Constitution’s language. No knowledgeable citizen or businessperson can afford to be ignorant of its basic provisions. 4.1 Basic Aspects of the US Constitution https://saylordotorg.github.io/text_government-regulation-and-the-legal-environment-of-business/s07-constitutional-law-and-us-comm.html 1/53 6/13/2021 Constitutional Law and US Commerce LEARNING OBJECTIVES 1. Describe the American values that are reflected in the US Constitution. 2. Know what federalism means, along with separation of powers. 3. Explain the process of amending the Constitution and why judicial review is particularly significant. The Constitution as Reflecting American Values In the US, the one document to which all public officials and military personnel pledge their unswerving allegiance is the Constitution. If you serve, you are asked to “support and defend” the Constitution “against all enemies, foreign and domestic.” The oath usually includes a statement that you swear that this oath is taken freely, honestly, and without “any purpose of evasion.” This loyalty oath may be related to a time—fifty years ago—when “un-American” activities were under investigation in Congress and the press; the fear of communism (as antithetical to American values and principles) was paramount. As you look at the Constitution and how it affects the legal environment of business, please consider what basic values it may impart to us and what makes it uniquely American and worth defending “against all enemies, foreign and domestic.” In Article I, the Constitution places the legislature first and prescribes the ways in which representatives are elected to public office. Article I balances influence in the federal legislature between large states and small states by creating a Senate in which the smaller states (by population) as well as the larger states have two votes. In Article II, the Constitution sets forth the powers and responsibilities of the branch—the presidency—and makes it clear that the president should be the commander in chief of the armed forces. Article II also gives states rather than individuals (through the Electoral College) a clear role in the election process. Article III creates the federal judiciary, and the Bill of Rights, adopted in 1791, makes clear that individual rights must be preserved against activities of the federal government. In general, the idea of rights is particularly strong. The Constitution itself speaks of rights in fairly general terms, and the judicial interpretation of various rights has been in flux. The “right” of a person to own another person was notably affirmed by the Supreme Court in the Dred Scott decision in 1857.In Scott v. Sanford (the Dred Scott decision), the court states that Scott should remain a slave, that as a slave he is not a citizen of the United States and thus not eligible to bring suit in a federal court, and that as a slave he is personal property and thus has never been free. The “right” of a child to freely contract for long, tedious hours of work was upheld by the court in Hammer v. Dagenhart in 1918. Both decisions were later repudiated, just as https://saylordotorg.github.io/text_government-regulation-and-the-legal-environment-of-business/s07-constitutional-law-and-us-comm.html 2/53 6/13/2021 Constitutional Law and US Commerce the decision that a woman has a “right” to an abortion in the first trimester of pregnancy could later be repudiated if Roe v. Wade is overturned by the Supreme Court.Roe v. Wade, 410 US 113 (1973). General Structure of the Constitution Look at the Constitution. Notice that there are seven articles, starting with Article I (legislative powers), Article II (executive branch), and Article III (judiciary). Notice that there is no separate article for administrative agencies. The Constitution also declares that it is “the supreme Law of the Land” (Article VI). Following Article VII are the ten amendments adopted in 1791 that are referred to as the Bill of Rights. Notice also that in 1868, a new amendment, the Fourteenth, was adopted, requiring states to provide “due process” and “equal protection of the laws” to citizens of the United States. Federalism The partnership created in the Constitution between the states and the federal government is called federalism. The Constitution is a document created by the states in which certain powers are delegated to the national government, and other powers are reserved to the states. This is made explicit in the Tenth Amendment. Separation of Powers and Judicial Review Because the Founding Fathers wanted to ensure that no single branch of the government, especially the executive branch, would be ascendant over the others, they created various checks and balances to ensure that each of the three principal branches had ways to limit or modify the power of the others. This is known as the separation of powers. Thus the president retains veto power, but the House of Representatives is entrusted with the power to initiate spending bills. Power sharing was evident in the basic design of Congress, the federal legislative branch. The basic power imbalance was between the large states (with greater population) and the smaller ones (such as Delaware). The smaller ones feared a loss of sovereignty if they could be outvoted by the larger ones, so the federal legislature was constructed to guarantee two Senate seats for every state, no matter how small. The Senate was also given great responsibility in ratifying treaties and judicial nominations. The net effect of this today is that senators from a very small number of states can block treaties and other important legislation. The power of small states is also magnified by the Senate’s cloture rule, which currently requires sixty out of one hundred senators to vote to bring a bill to the floor for an upor-down vote. https://saylordotorg.github.io/text_government-regulation-and-the-legal-environment-of-business/s07-constitutional-law-and-us-comm.html 3/53 6/13/2021 Constitutional Law and US Commerce Because the Constitution often speaks in general terms (with broad phrases such as “due process” and “equal protection”), reasonable people have disagreed as to how those terms apply in specific cases. The United States is unique among industrialized democracies in having a Supreme Court that reserves for itself that exclusive power to interpret what the Constitution means. The famous case of Marbury v. Madison began that tradition in 1803, when the Supreme Court had marginal importance in the new republic. The decision in Bush v. Gore, decided in December of 2000, illustrates the power of the court to shape our destiny as a nation. In that case, the court overturned a ruling by the Florida Supreme Court regarding the way to proceed on a recount of the Florida vote for the presidency. The court’s ruling was purportedly based on the “equal protection of the laws” provision in the Fourteenth Amendment. From Marbury to the present day, the Supreme Court has articulated the view that the US Constitution sets the framework for all other US laws, whether statutory or judicially created. Thus any statute (or portion thereof) or legal ruling (judicial or administrative) in conflict with the Constitution is not enforceable. And as the Bush v. Gore decision indicates, the states are not entirely free to do what they might choose; their own sovereignty is limited by their union with the other states in a federal sovereign. If the Supreme Court makes a “bad decision” as to what the Constitution means, it is not easily overturned. Either the court must change its mind (which it seldom does) or two-thirds of Congress and three-fourths of the states must make an amendment (Article V). Because the Supreme Court has this power of judicial review, there have been many arguments about how it should be exercised and what kind of “philosophy” a Supreme Court justice should have. President Richard Nixon often said that a Supreme Court justice should “strictly construe” the Constitution and not add to its language. Finding law in the Constitution was “judicial activism” rather than “judicial restraint.” The general philosophy behind the call for “strict constructionist” justices is that legislatures make laws in accord with the wishes of the majority, and so unelected judges should not make law according to their own views and values. Nixon had in mind the 1960s Warren court, which “found” rights in the Constitution that were not specifically mentioned—the right of privacy, for example. In later years, critics of the Rehnquist court would charge that it “found” rights that were not specifically mentioned, such as the right of states to be free from federal antidiscrimination laws. See, for example, Kimel v. Florida Board of Regents, or the Citizens United v. Federal Election Commission case (Section 4.6.5), which held that corporations are “persons” with “free speech rights” that include spending unlimited amounts of money in campaign donations and political advocacy.Kimel v. Florida Board of Regents, 528 US 62 (2000). https://saylordotorg.github.io/text_government-regulation-and-the-legal-environment-of-business/s07-constitutional-law-and-us-comm.html 4/53 6/13/2021 Constitutional Law and US Commerce Because Roe v. Wade has been so controversial, this chapter includes a seminal case on “the right of privacy,” Griswold v. Connecticut, Section 4.6.1. Was the court was correct in recognizing a “right of privacy” in Griswold? This may not seem like a “business case,” but consider: the manufacture and distribution of birth control devices is a highly profitable (and legal) business in every US state. Moreover, Griswold illustrates another important and much-debated concept in US constitutional law: substantive due process (see Section 4.5.3 "Fifth Amendment"). The problem of judicial review and its proper scope is brought into sharp focus in the abortion controversy. Abortion became a lucrative service business after Roe v. Wade was decided in 1973. That has gradually changed, with state laws that have limited rather than overruled Roe v. Wade and with persistent antiabortion protests, killings of abortion doctors, and efforts to publicize the human nature of the fetuses being aborted. The key here is to understand that there is no explicit mention in the Constitution of any right of privacy. As Justice Harry Blackmun argued in his majority opinion in Roe v. Wade, The Constitution does not explicitly mention any right of privacy. In a line of decisions, however, the Court has recognized that a right of personal privacy or a guarantee of certain areas or zones of privacy, does exist under the Constitution.…[T]hey also make it clear that the right has some extension to activities relating to marriage…procreation…contraception…family relationships…and child rearing and education.…The right of privacy…is broad enough to encompass a woman’s decision whether or not to terminate her pregnancy. In short, justices interpreting the Constitution wield quiet yet enormous power through judicial review. In deciding that the right of privacy applied to a woman’s decision to abort in the first trimester, the Supreme Court did not act on the basis of a popular mandate or clear and unequivocal language in the Constitution, and it made illegal any state or federal legislative or executive action contrary to its interpretation. Only a constitutional amendment or the court’s repudiation of Roe v. Wade as a precedent could change that interpretation. K E Y TA K E AWAY The Constitution gives voice to the idea that people have basic rights and that a civilian president is also the commander in chief of the armed forces. It gives instructions as to how the various branches of government must share power and also tries to balance power between the states and the federal government. It does not expressly allow for judicial review, but the Supreme Court’s ability to declare what laws are (or are not) constitutional has given the judicial branch a kind of power not seen in other industrialized democracies. https://saylordotorg.github.io/text_government-regulation-and-the-legal-environment-of-business/s07-constitutional-law-and-us-comm.html 5/53 6/13/2021 Constitutional Law and US Commerce EXERCISES 1. Suppose the Supreme Court declares that Congress and the president cannot authorize the indefinite detention of terrorist suspects without a trial of some sort, whether military or civilian. Suppose also that the people of the United States favor such indefinite detention and that Congress wants to pass a law rebuking the court’s decision. What kind of law would have to be passed, by what institutions, and by what voting percentages? 2. When does a prior decision of the Supreme Court deserve overturning? Name one decision of the Supreme Court that you think is no longer “good law.” Does the court have to wait one hundred years to overturn its prior case precedents? 4.2 The Commerce Clause LEARNING OBJECTIVES 1. Name the specific clause through which Congress has the power to regulate commerce. What, specifically, does this clause say? 2. Explain how early decisions of the Supreme Court interpreted the scope of the commerce clause and how that impacted the legislative proposals and programs of Franklin Delano Roosevelt during the Great Depression. 3. Describe both the wider use of the commerce clause from World War II through the 1990s and the limitations the Supreme Court imposed in Lopez and other cases. First, turn to Article I, Section 8. The commerce clause gives Congress the exclusive power to make laws relating to foreign trade and commerce and to commerce among the various states. Most of the federally created legal environment springs from this one clause: if Congress is not authorized in the Constitution to make certain laws, then it acts unconstitutionally and its actions may be ruled unconstitutional by the Supreme Court. Lately, the Supreme Court has not been shy about ruling acts of Congress unconstitutional. Here are the first five parts of Article I, Section 8, which sets forth the powers of the federal legislature. The commerce clause is in boldface. It is short, but most federal legislation affecting business depends on this very clause: Section 8 https://saylordotorg.github.io/text_government-regulation-and-the-legal-environment-of-business/s07-constitutional-law-and-us-comm.html 6/53 6/13/2021 Constitutional Law and US Commerce [Clause 1] The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States; [Clause 2] To borrow Money on the credit of the United States; [Clause 3] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; [Clause 4] To establish a uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States; [Clause 5] To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures; Early Commerce Clause Cases For many years, the Supreme Court was very strict in applying the commerce clause: Congress could only use it to legislate aspects of the movement of goods from one state to another. Anything else was deemed local rather than national. For example, In Hammer v. Dagenhart, decided in 1918, a 1916 federal statute had barred transportation in interstate commerce of goods produced in mines or factories employing children under fourteen or employing children fourteen and above for more than eight hours a day. A complaint was filed in the US District Court for the Western District of North Carolina by a father in his own behalf and on behalf of his two minor sons, one under the age of fourteen years and the other between fourteen and sixteen years, who were employees in a cotton mill in Charlotte, North Carolina. The father’s lawsuit asked the court to enjoin (block) the enforcement of the act of Congress intended to prevent interstate commerce in the products of child labor. The Supreme Court saw the issue as whether Congress had the power under the commerce clause to control interstate shipment of goods made by children under the age of fourteen. The court found that Congress did not. The court cited several cases that had considered what interstate commerce could be constitutionally regulated by Congress. In Hipolite Egg Co. v. United States, the Supreme Court had sustained the power of Congress to pass the Pure Food and Drug Act, which prohibited the introduction into the states by means of interstate commerce impure foods and drugs.Hipolite Egg Co. v. United States, 220 US 45 (1911). In Hoke v. United States, the Supreme Court had sustained the constitutionality of the so-called White Slave Traffic Act of 1910, whereby the transportation of a woman in interstate commerce for the purpose of prostitution was forbidden. In that case, the court https://saylordotorg.github.io/text_government-regulation-and-the-legal-environment-of-business/s07-constitutional-law-and-us-comm.html 7/53 6/13/2021 Constitutional Law and US Commerce said that Congress had the power to protect the channels of interstate commerce: “If the facility of interstate transportation can be taken away from the demoralization of lotteries, the debasement of obscene literature, the contagion of diseased cattle or persons, the impurity of food and drugs, the like facility can be taken away from the systematic enticement to, and the enslavement in prostitution and debauchery of women, and, more insistently, of girls.”Hoke v. United States, 227 US 308 (1913). In each of those instances, the Supreme Court said, “[T]he use of interstate transportation was necessary to the accomplishment of harmful results.” In other words, although the power over interstate transportation was to regulate, that could only be accomplished by prohibiting the use of the facilities of interstate commerce to effect the evil intended. But in Hammer v. Dagenhart, that essential element was lacking. The law passed by Congress aimed to standardize among all the states the ages at which children could be employed in mining and manufacturing, while the goods themselves are harmless. Once the labor is done and the articles have left the factory, the “labor of their production is over, and the mere fact that they were intended for interstate commerce transportation does not make their production subject to federal control under the commerce power.” In short, the early use of the commerce clause was limited to the movement of physical goods between states. Just because something might enter the channels of interstate commerce later on does not make it a fit subject for national regulation. The production of articles intended for interstate commerce is a matter of local regulation. The court therefore upheld the result from the district and circuit court of appeals; the application of the federal law was enjoined. Goods produced by children under the age of fourteen could be shipped anywhere in the United States without violating the federal law. From the New Deal to the New Frontier and the Great Society:1930s–1970 During the global depression of the 1930s, the US economy saw jobless rates of a third of all workers, and President Roosevelt’s New Deal program required more active federal legislation. Included in the New Deal program was the recognition of a “right” to form labor unions without undue interference from employers. Congress created the National Labor Relations Board (NLRB) in 1935 to investigate and to enjoin employer practices that violated this right. In NLRB v. Jones & Laughlin Steel Corporation, a union dispute with management at a large steelproducing facility near Pittsburgh, Pennsylvania, became a court case. In this case, the NLRB had charged the Jones & Laughlin Steel Corporation with discriminating against employees who were union members. The company’s position was that the law authorizing the NLRB was unconstitutional, exceeding Congress’s powers. The court held that the act was narrowly constructed https://saylordotorg.github.io/text_government-regulation-and-the-legal-environment-of-business/s07-constitutional-law-and-us-comm.html 8/53 6/13/2021 Constitutional Law and US Commerce so as to regulate industrial activities that had the potential to restrict interstate commerce. The earlier decisions under the commerce clause to the effect that labor relations had only an indirect effect on commerce were effectively reversed. Since the ability of employees to engage in collective bargaining (one activity protected by the act) is “an essential condition of industrial peace,” the national government was justified in penalizing corporations engaging in interstate commerce that “refuse to confer and negotiate” with their workers. This was, however, a close decision, and the switch of one justice made this ruling possible. Without this switch, the New Deal agenda would have been effectively derailed. The Substantial Effects Doctrine: World War II to the 1990s Subsequent to NLRB v. Jones & Laughlin Steel Corporation, Congress and the courts generally accepted that even modest impacts on interstate commerce were “reachable” by federal legislation. For example, the case of Wickard v. Filburn, from 1942, represents a fairly long reach for Congress in regulating what appear to be very local economic decisions (Section 4.6.2). Wickard established that “substantial effects” in interstate commerce could be very local indeed! But commerce clause challenges to federal legislation continued. In the 1960s, the Civil Rights Act of 1964 was challenged on the ground that Congress lacked the power under the commerce clause to regulate what was otherwise fairly local conduct. For example, Title II of the act prohibited racial discrimination in public accommodations (such as hotels, motels, and restaurants), leading to the famous case of Katzenbach v. McClung (1964). Ollie McClung’s barbeque place in Birmingham, Alabama, allowed “colored” people to buy takeout at the back of the restaurant but not to sit down with “white” folks inside. The US attorney sought a court order to require Ollie to serve all races and colors, but Ollie resisted on commerce clause grounds: the federal government had no business regulating a purely local establishment. Indeed, Ollie did not advertise nationally, or even regionally, and had customers only from the local area. But the court found that some 42 percent of the supplies for Ollie’s restaurant had moved in the channels of interstate commerce. This was enough to sustain federal regulation based on the commerce clause.Katzenbach v. McClung, 379 US 294 (1964). For nearly thirty years following, it was widely assumed that Congress could almost always find some interstate commerce connection for any law it might pass. It thus came as something of a shock in 1995 when the Rehnquist court decided U.S. v. Lopez. Lopez had been convicted under a federal law that prohibited possession of firearms within 1,000 feet of a school. The law was part of a twenty-year trend (roughly 1970 to 1990) for senators and congressmen to pass laws that were tough on crime. https://saylordotorg.github.io/text_government-regulation-and-the-legal-environment-of-business/s07-constitutional-law-and-us-comm.html 9/53 6/13/2021 Constitutional Law and US Commerce Lopez’s lawyer admitted that Lopez had had a gun within 1,000 feet of a San Antonio school yard but challenged the law itself, arguing that Congress exceeded its authority under the commerce clause in passing this legislation. The US government’s Solicitor General argued on behalf of the Department of Justice to the Supreme Court that Congress was within its constitutional rights under the commerce clause because education of the future workforce was the foundation for a sound economy and because guns at or near school yards detracted from students’ education. The court rejected this analysis, noting that with the government’s analysis, an interstate commerce connection could be conjured from almost anything. Lopez went free because the law itself was unconstitutional, according to the court. Congress made no attempt to pass similar legislation after the case was decided. But in passing subsequent legislation, Congress was often careful to make a record as to why it believed it was addressing a problem that related to interstate commerce. In 1994, Congress passed the Violence Against Women Act (VAWA), having held hearings to establish why violence against women on a local level would impair interstate commerce. In 1994, while enrolled at Virginia Polytechnic Institute (Virginia Tech), Christy Brzonkala alleged that Antonio Morrison and James Crawford, both students and varsity football players at Virginia Tech, had raped her. In 1995, Brzonkala filed a complaint against Morrison and Crawford under Virginia Tech’s sexual assault policy. After a hearing, Morrison was found guilty of sexual assault and sentenced to immediate suspension for two semesters. Crawford was not punished. A second hearing again found Morrison guilty. After an appeal through the university’s administrative system, Morrison’s punishment was set aside, as it was found to be “excessive.” Ultimately, Brzonkala dropped out of the university. Brzonkala then sued Morrison, Crawford, and Virginia Tech in federal district court, alleging that Morrison’s and Crawford’s attack violated 42 USC Section 13981, part of the VAWA), which provides a federal civil remedy for the victims of gender-motivated violence. Morrison and Crawford moved to dismiss Brzonkala’s suit on the ground that Section 13981’s civil remedy was unconstitutional. In dismissing the complaint, the district court found that that Congress lacked authority to enact Section 13981 under either the commerce clause or the Fourteenth Amendment, which Congress had explicitly identified as the sources of federal authority for the VAWA. Ultimately, the court of appeals affirmed, as did the Supreme Court. The Supreme Court held that Congress lacked the authority to enact a statute under the commerce clause or the Fourteenth Amendment because the statute did not regulate an activity that substantially affected interstate commerce nor did it redress harm caused by the state. Chief Justice William H. Rehnquist wrote for the court that “under our federal system that remedy must be provided by the Commonwealth of Virginia, and not by the United States.” Dissenting, Justice Stephen G. Breyer argued that the majority opinion “illustrates the difficulty of finding a workable https://saylordotorg.github.io/text_government-regulation-and-the-legal-environment-of-business/s07-constitutional-law-and-us-comm.html 10/53 6/13/2021 Constitutional Law and US Commerce judicial Commerce Clause touchstone.” Justice David H. Souter, dissenting, noted that VAWA contained a “mountain of data assembled by Congress…showing the effects of violence against women on interstate commerce.” The absence of a workable judicial commerce clause touchstone remains. In 1996, California voters passed the Compassionate Use Act, legalizing marijuana for medical use. California’s law conflicted with the federal Controlled Substances Act (CSA), which banned possession of marijuana. After the Drug Enforcement Administration (DEA) seized doctor-prescribed marijuana from a patient’s home, a group of medical marijuana users sued the DEA and US Attorney General John Ashcroft in federal district court. The medical marijuana users argued that the CSA—which Congress passed using its constitutional power to regulate interstate commerce—exceeded Congress’s commerce clause power. The district court ruled against the group, but the Ninth Circuit Court of Appeals reversed and ruled the CSA unconstitutional because it applied to medical marijuana use solely within one state. In doing so, the Ninth Circuit relied on U.S. v. Lopez (1995) and U.S. v. Morrison (2000) to say that using medical marijuana did not “substantially affect” interstate commerce and therefore could not be regulated by Congress. But by a 6–3 majority, the Supreme Court held that the commerce clause gave Congress authority to prohibit the local cultivation and use of marijuana, despite state law to the contrary. Justice John Paul Stevens argued that the court’s precedents established Congress’s commerce clause power to regulate purely local activities that are part of a “class of activities” with a substantial effect on interstate commerce. The majority argued that Congress could ban local marijuana use because it was part of such a class of activities: the national marijuana market. Local use affected supply and demand in the national marijuana market, making the regulation of intrastate use “essential” to regulating the drug’s national market. Notice how similar this reasoning is to the court’s earlier reasoning in Wickard v. Filburn (Section 4.6.2). In contrast, the court’s conservative wing was adamant that federal power had been exceeded. Justice Clarence Thomas’s dissent in Gonzalez v. Raich stated that Raich’s local cultivation and consumption of marijuana was not “Commerce…among the several States.” Representing the “originalist” view that the Constitution should mostly mean what the Founders meant it to mean, he also said that in the early days of the republic, it would have been unthinkable that Congress could prohibit the local cultivation, possession, and consumption of marijuana. K E Y TA K E AWAY https://saylordotorg.github.io/text_government-regulation-and-the-legal-environment-of-business/s07-constitutional-law-and-us-comm.html 11/53 6/13/2021 Constitutional Law and US Commerce The commerce clause is the basis on which the federal government regulates interstate economic activity. The phrase “interstate commerce” has been subject to differing interpretations by the Supreme Court over the past one hundred years. There are certain matters that are essentially local or intrastate, but the range of federal involvement in local matters is still considerable. EXERCISES 1. Why would Congress have power under the Civil Rights Act of 1964 to require restaurants and hotels to not discriminate against interstate travelers on the basis of race, color, sex, religion, or national origin? Suppose the Holiday Restaurant near I-80 in Des Moines, Iowa, has a sign that says, “We reserve the right to refuse service to any Muslim or person of Middle Eastern descent.” Suppose also that the restaurant is very popular locally and that only 40 percent of its patrons are travelers on I-80. Are the owners of the Holiday Restaurant in violation of the Civil Rights Act of 1964? What would happen if the owners resisted enforcement by claiming that Title II of the act (relating to “public accommodations” such as hotels, motels, and restaurants) was unconstitutional? 2. If the Supreme Court were to go back to the days of Hammer v. Dagenhart and rule that only goods and services involving interstate movement could be subject to federal law, what kinds of federal programs might be lacking a sound basis in the commerce clause? “Obamacare”? Medicare? Homeland security? Social Security? What other powers are granted to Congress under the Constitution to legislate for the general good of society? 4.3 Dormant Commerce Clause LEARNING OBJECTIVES 1. Understand that when Congress does not exercise its powers under the commerce clause, the Supreme Court may still limit state legislation that discriminates against interstate commerce or places an undue burden on interstate commerce. 2. Distinguish between “discrimination” dormant-commerce-clause cases and “undue burden” dormant-commerce-clause cases. Congress has the power to legislate under the commerce clause and often does legislate. For example, Congress might say that trucks moving on interstate highways must not be more than seventy feet in https://saylordotorg.github.io/text_government-regulation-and-the-legal-environment-of-business/s07-constitutional-law-and-us-comm.html 12/53 6/13/2021 Constitutional Law and US Commerce length. But if Congress does not exercise its powers and regulate in certain areas (such as the size and length of trucks on interstate highways), states may make their own rules. States may do so under the so-called historic police powers of states that were never yielded up to the federal government. These police powers can be broadly exercised by states for purposes of health, education, welfare, safety, morals, and the environment. But the Supreme Court has reserved for itself the power to determine when state action is excessive, even when Congress has not used the commerce clause to regulate. This power is claimed to exist in the dormant commerce clause. There are two ways that a state may violate the dormant commerce clause. If a state passes a law that is an “undue burden” on interstate commerce or that “discriminates” against interstate commerce, it will be struck down. Kassel v. Consolidated Freightways, in Section 4.7 "Summary and Exercises", is an example of a case where Iowa imposed an undue burden on interstate commerce by prohibiting double trailers on its highways.Kassell v. Consolidated Freightways, 450 US 662 (1981). Iowa’s prohibition was judicially declared void when the Supreme Court judged it to be an undue burden. Discrimination cases such as Hunt v. Washington Apple Advertising Commission (Section 4.6 "Cases") pose a different standard. The court has been fairly inflexible here: if one state discriminates in its treatment of any article of commerce based on its state of origin, the court will strike down the law. For example, in Oregon Waste Systems v. Department of Environmental Quality, the state wanted to place a slightly higher charge on waste coming from out of state.Oregon Waste Systems v. Department of Environmental Quality, 511 US 93 (1994). The state’s reasoning was that in-state residents had already contributed to roads and other infrastructure and that tipping fees at waste facilities should reflect the prior contributions of in-state companies and residents. Out-of-state waste handlers who wanted to use Oregon landfills objected and won their dormant commerce clause claim that Oregon’s law discriminated “on its face” against interstate commerce. Under the Supreme Court’s rulings, anything that moves in channels of interstate commerce is “commerce,” even if someone is paying to get rid of something instead of buying something. Thus the states are bound by Supreme Court decisions under the dormant commerce clause to do nothing that differentiates between articles of commerce that originate from within the state from those that originate elsewhere. If Michigan were to let counties decide for themselves whether to take garbage from outside of the county or not, this could also be a discrimination based on a place of origin outside the state. (Suppose, for instance, each county were to decide not to take waste from outside the county; then all Michigan counties would effectively be excluding waste from outside of Michigan, which is discriminatory.)Fort Gratiot Sanitary Landfill v. Michigan Dep’t of Natural Resources, 504 US 353 (1992). https://saylordotorg.github.io/text_government-regulation-and-the-legal-environment-of-business/s07-constitutional-law-and-us-comm.html 13/53 6/13/2021 Constitutional Law and US Commerce The Supreme Court probably would uphold any solid waste requirements that did not differentiate on the basis of origin. If, for example, all waste had to be inspected for specific hazards, then the law would apply equally to in-state and out-of-state garbage. Because this is the dormant commerce clause, Congress could still act (i.e., it could use its broad commerce clause powers) to say that states are free to keep out-of-state waste from coming into their own borders. But Congress has declined to do so. What follows is a statement from one of the US senators from Michigan, Carl Levin, in 2003, regarding the significant amounts of waste that were coming into Michigan from Toronto, Canada. Dealing with Unwelcome Waste Senator Carl Levin, January 2003 Michigan is facing an intolerable situation with regard to the importation of waste from other states and Canada. Canada is the largest source of waste imports to Michigan. Approximately 65 truckloads of waste come in to Michigan per day from Toronto alone, and an estimated 110–130 trucks come in from Canada each day. This problem isn’t going to get any better. Ontario’s waste shipments are growing as the Toronto area signs new contracts for waste disposal here and closes its two remaining landfills. At the beginning of 1999, the Toronto area was generating about 2.8 million tons of waste annually, about 700,000 tons of which were shipped to Michigan. By early this year, barring unforeseen developments, the entire 2.8 million tons will be shipped to Michigan for disposal. Why can’t Canada dispose of its trash in Canada? They say that after 20 years of searching they have not been able to find a suitable Ontario site for Toronto’s garbage. Ontario has about 345,000 square miles compared to Michigan’s 57,000 square miles. With six times the land mass, that argument is laughable. The Michigan Department of Environmental Quality estimates that, for every five years of disposal of Canadian waste at the current usage volume, Michigan is losing a full year of landfill capacity. The environmental impacts on landfills, including groundwater contamination, noise pollution and foul odors, are exacerbated by the significant increase in the use of our landfills from sources outside of Michigan. https://saylordotorg.github.io/text_government-regulation-and-the-legal-environment-of-business/s07-constitutional-law-and-us-comm.html 14/53 6/13/2021 Constitutional Law and US Commerce I have teamed up with Senator Stabenow and Congressman Dingell to introduce legislation that would strengthen our ability to stop shipments of waste from Canada. We have protections contained in a 17 year-old international agreement between the U.S. and Canada called the Agreement Concerning the Transboundary Movement of Hazardous Waste. The U.S. and Canada entered into this agreement in 1986 to allow the shipment of hazardous waste across the U.S./Canadian border for treatment, storage or disposal. In 1992, the two countries decided to add municipal solid waste to the agreement. To protect both countries, the agreement requires notification of shipments to the importing country and it also provides that the importing country may withdraw consent for shipments. Both reasons are evidence that these shipments were intended to be limited. However, the agreement’s provisions have not been enforced by the United States. Canada could not export waste to Michigan without the 1986 agreement, but the U.S. has not implemented the provisions that are designed to protect the people of Michigan. Although those of us that introduced this legislation believe that the Environmental Protection Agency has the authority to enforce this agreement, they have not done so. Our bill would require the EPA [Environmental Protection Agency] to enforce the agreement. In order to protect the health and welfare of the citizens of Michigan and our environment, we must consider the impact of the importation of trash on state and local recycling efforts, landfill capacity, air emissions, road deterioration resulting from increased vehicular traffic and public health and the environment. Our bill would require the EPA to consider these factors in determining whether to accept imports of trash from Canada. It is my strong view that such a review should lead the EPA to say “no” to the status quo of trash imports. K E Y TA K E AWAY Where Congress does not act pursuant to its commerce clause powers, the states are free to legislate on matters of commerce under their historic police powers. However, the Supreme Court has set limits on such powers. Specifically, states may not impose undue burdens on interstate commerce and may not discriminate against articles in interstate commerce. https://saylordotorg.github.io/text_government-regulation-and-the-legal-environment-of-business/s07-constitutional-law-and-us-comm.html 15/53 6/13/2021 Constitutional Law and US Commerce EXERCISES 1. Suppose that the state of New Jersey wishes to limit the amount of hazardous waste that enters into its landfills. The general assembly in New Jersey passes a law that specifically forbids any hazardous waste from entering into the state. All landfills are subject to tight regulations that will allow certain kinds of hazardous wastes originating in New Jersey to be put in New Jersey landfills but that impose significant criminal fines on landfill operators that accept out-of-state hazardous waste. The Baldessari Brothers Landfill in Linden, New Jersey, is fined for taking hazardous waste from a New York State transporter and appeals that ruling on the basis that New Jersey’s law is unconstitutional. What is the result? 2. The state of Arizona determines through its legislature that trains passing through the state cannot be longer than seventy cars. There is some evidence that in Eastern US states longer trains pose some safety hazards. There is less evidence that long trains are a problem in Western states. Several major railroads find the Arizona legislation costly and burdensome and challenge the legislation after applied-for permits for longer trains are denied. What kind of dormant commerce clause challenge is this, and what would it take for the challenge to be successful? 4.4 Preemption: The Supremacy Clause LEARNING OBJECTIVES 1. Understand the role of the supremacy clause in the balance between state and federal power. 2. Give examples of cases where state legislation is preempted by federal law and cases where state legislation is not preempted by federal law. When Congress does use its power under the commerce clause, it can expressly state that it wishes to have exclusive regulatory authority. For example, when Congress determined in the 1950s to promote nuclear power (“atoms for peace”), it set up the Nuclear Regulatory Commission and provided a limitation of liability for nuclear power plants in case of a nuclear accident. The states were expressly told to stay out of the business of regulating nuclear power or the movement of nuclear materials. Thus Rochester, Minnesota, or Berkeley, California, could declare itself a nuclear-free zone, but the federal government would have preempted such legislation. If Michigan wished to set safety standards at Detroit Edison’s Fermi II nuclear reactor that were more stringent than the federal Nuclear Regulatory Commission’s standards, Michigan’s standards would be preempted and thus be void. https://saylordotorg.github.io/text_government-regulation-and-the-legal-environment-of-business/s07-constitutional-law-and-us-comm.html 16/53 6/13/2021 Constitutional Law and US Commerce Even where Congress does not expressly preempt state action, such action may be impliedly preempted. States cannot constitutionally pass laws that interfere with the accomplishment of the purposes of the federal law. Suppose, for example, that Congress passes a comprehensive law that sets standards for foreign vessels to enter the navigable waters and ports of the United States. If a state creates a law that sets standards that conflict with the federal law or sets standards so burdensome that they interfere with federal law, the doctrine of preemption will (in accordance with the supremacy clause) void the state law or whatever parts of it are inconsistent with federal law. But Congress can allow what might appear to be inconsistencies; the existence of federal statutory standards does not always mean that local and state standards cannot be more stringent. If California wants cleaner air or water than other states, it can set stricter standards—nothing in the Clean Water Act or Clean Air Act forbids the state from setting stricter pollution standards. As the auto industry well knows, California has set stricter standards for auto emissions. Since the 1980s, most automakers have made both a federal car and a California car, because federal Clean Air Act emissions restrictions do not preempt more rigorous state standards. Large industries and companies actually prefer regulation at the national level. It is easier for a large company or industry association to lobby in Washington, DC, than to lobby in fifty different states. Accordingly, industry often asks Congress to put preemptive language into its statutes. The tobacco industry is a case in point. The cigarette warning legislation of the 1960s (where the federal government required warning labels on cigarette packages) effectively preempted state negligence claims based on failure to warn. When the family of a lifetime smoker who had died sued in New Jersey court, one cause of action was the company’s failure to warn of the dangers of its product. The Supreme Court reversed the jury’s award based on the federal preemption of failure to warn claims under state law.Cippolone v. Liggett Group, 505 US 504 (1993). The Supremacy Clause Article VI This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding. https://saylordotorg.github.io/text_government-regulation-and-the-legal-environment-of-business/s07-constitutional-law-and-us-comm.html 17/53 6/13/2021 Constitutional Law and US Commerce The preemption doctrine derives from the supremacy clause of the Constitution, which states that the “Constitution and the Laws of the United States…shall be the supreme Law of the Land…any Thing in the Constitutions or Laws of any State to the Contrary notwithstanding.” This means of course, that any federal law—even a regulation of a federal agency—would control over any conflicting state law. Preemption can be either express or implied. When Congress chooses to expressly preempt state law, the only question for courts becomes determining whether the challenged state law is one that the federal law is intended to preempt. Implied preemption presents more difficult issues. The court has to look beyond the express language of federal statutes to determine whether Congress has “occupied the field” in which the state is attempting to regulate, or whether a state law directly conflicts with federal law, or whether enforcement of the state law might frustrate federal purposes. Federal “occupation of the field” occurs, according to the court in Pennsylvania v. Nelson (1956), when there is “no room” left for state regulation. Courts are to look to the pervasiveness of the federal scheme of regulation, the federal interest at stake, and the danger of frustration of federal goals in making the determination as to whether a challenged state law can stand. In Silkwood v. Kerr-McGee (1984), the court, voting 5–4, found that a $10 million punitive damages award (in a case litigated by famed attorney Gerry Spence) against a nuclear power plant was not impliedly preempted by federal law. Even though the court had recently held that state regulation of the safety aspects of a federally licensed nuclear power plant was preempted, the court drew a different conclusion with respect to Congress’s desire to displace state tort law—even though the tort actions might be premised on a violation of federal safety regulations. Cipollone v. Liggett Group (1993) was a closely watched case concerning the extent of an express preemption provision in two cigarette labeling laws of the 1960s. The case was a wrongful death action brought against tobacco companies on behalf of Rose Cipollone, a lung cancer victim who had started smoking cigarette in the 1940s. The court considered the preemptive effect on state law of a provision that stated, “No requirement based on smoking and health shall be imposed under state law with respect to the advertising and promotion of cigarettes.” The court concluded that several types of state tort actions were preempted by the provision but allowed other types to go forward. K E Y TA K E AWAY https://saylordotorg.github.io/text_government-regulation-and-the-legal-environment-of-business/s07-constitutional-law-and-us-comm.html 18/53 6/13/2021 Constitutional Law and US Commerce In cases of conflicts between state and federal law, federal law will preempt (or control) state law because of the supremacy clause. Preemption can be express or implied. In cases where preemption is implied, the court usually finds that compliance with both state and federal law is not possible or that a federal regulatory scheme is comprehensive (i.e., “occupies the field”) and should not be modified by state actions. EXERCISES 1. For many years, the United States engaged in discussions with friendly nations as to the reciprocal use of ports and harbors. These discussions led to various multilateral agreements between the nations as to the configuration of oceangoing vessels and how they would be piloted. At the same time, concern over oil spills in Puget Sound led the state of Washington to impose fairly strict standards on oil tankers and requirements for the training of oil tanker pilots. In addition, Washington’s state law imposed many other requirements that went above and beyond agreedupon requirements in the international agreements negotiated by the federal government. Are the Washington state requirements preempted by federal law? 2. The Federal Arbitration Act of 1925 requires that all contracts for arbitration be treated as any other contract at common law. Suppose that the state of Alabama wishes to protect its citizens from a variety of arbitration provisions that they might enter into unknowingly. Thus the legislation provides that all predispute arbitration clauses be in bold print, that they be of twelvepoint font or larger, that they be clearly placed within the first two pages of any contract, and that they have a separate signature line where the customer, client, or patient acknowledges having read, understood, and signed the arbitration c...

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