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Legal/Ethical Issues in Business: Week 4

by: Brittany Smith

Legal/Ethical Issues in Business: Week 4 BUS 205

Marketplace > Colorado State University > Business > BUS 205 > Legal Ethical Issues in Business Week 4
Brittany Smith
GPA 3.5

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About this Document

These notes cover BOTH Constitutional Law and information necessary to write the essay due on the 26th of September. Remember, the first exam is this week, so if y'all are missing notes, this is a ...
Legal/Ethical Issues Business
Stephanie Hewitt Bowen
Class Notes
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This 4 page Class Notes was uploaded by Brittany Smith on Sunday September 18, 2016. The Class Notes belongs to BUS 205 at Colorado State University taught by Stephanie Hewitt Bowen in Fall 2016. Since its upload, it has received 40 views. For similar materials see Legal/Ethical Issues Business in Business at Colorado State University.


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Date Created: 09/18/16
Legal and Ethical Issues in Business Chapter 5 Commerce Clause  Article 1 Section 8  The constitutional authority to regulate business  Commerce o All business dealings that affect more than one state o Gibbons v. Ogden (1824)  This case established the definition of commerce that will be used in many future cases  Substantial Effect Rule o Does the activity substantially affect interstate commerce? o Wickird v. Filburn (1942)  This case established the Substantial Effect Rule  U.S. v. Lopez (1990s) o Showed that possession doesn’t include commerce  Any state regulation that tries to regulate interstate commerce is unconstitutional Individual States  “Police Powers” o power to protect or promote health, safety, general welfare, public order, and  morals o Examples  Law enforcement  Emergency services  Fire department  Department of Human Services (and others of the like)  Individual Cities  Supremacy Clause o Federal law wins o However, a state can make stricter laws than the federal law in place Fundamental Rights Anything in the Bill of Rights o The Bill of Rights was designed to protect individual citizens (and business)  against government action Privacy Rights  Not in constitution o No “right to privacy”  Derived from 4,5, and 14  amendment  Federal Statues Affecting Privacy Rights o “Pre­texting” for financial information is illegal under Gramm­Leach­Bliley o Privacy Act of 1974 o Medical Information o Court Records o Patriot Act of 2001 Due Process and Equal Protection  5  and 14  amendment provides “no person shall be deprived of life, liberty, or property  without due process of law Procedural Due Process Is the government attempting to take away life, liberty, or property? If so, how much due process?  o The more the government takes away, the more due process o Ex.   Eminent Domain “Taking Clause” (Property)  Death penalty (Life)  Probation (Liberty) Substantive Due Process A form of due process that says that certain rights are so fundamental that the  government may not eliminate them  Focus on the content or substance of a law (not the government action) Strict Scrutiny o Law limits fundamental rights o Unconstitutional UNLESS the government can show that the law furthers a  compelling state interest   National Security is the only thing that fulfills this Rational Basis Test o Law want to regulate something else o Law rationally relates to legit government interest Can argue both substantive and procedure in law suit Equal Protection  14  amendment o can’t treat different people differently o similarly situated individual must be treated in the same manner  Equal Protection Tests o Strict Scrutiny  Race, ethnicity, and fundamental rights – is the classification necessary to  promote a compelling state interest, and be narrowly tailored to further  that interest  Almost nothing passes this unless its national security o Ex. All white school law in the 60’s and earlier  States thought they had a compelling interest (based on racial reasons)  Supreme Court turned them down o Intermediate Scrutiny  Gender – is the classification substantially related to important  governmental objectives  Ex. Women in the military/combat o Rational Basis  Economic or social issues – is the classification related to any legitimate  rational government interest?  Typically government wins under Rational Basis IS THERE GOVERNMENT ACTION INVOLVED OR NO??? Freedom of Speech  Only limited/against the law if political speech promotes unlawful behavior  Time, Place, and Manner o Government can’t limit these  Unprotected Speech o Can be regulated o Defamatory Speech  Hard to prove o Lewd and obscene  Porn  Supreme Court couldn’t define ‘obscene’  They resolved to “you’ll know it when we see it” o “Fighting Words”  anything likely to incite violence  Ex.  Yelling “fire” in a movie theater when there’s no fire Commercial Speech (advertising/soliciting)  Central Hudson Test (4 part test) o A law or regulation limiting lawful and truthful commercial speech will be  deemed constitutional (i.e. the government may regulate commercial speech) if  the law or regulations:  Seeks to implement a substantial government interest;  Directly advances that interest; and  Goes no further than to accomplish that objective  Must meet all 4 of these requirements  Example o Bad Frog Brewery Case  The city denied them a liquor license because of their label revealing a  frog flipping off everything  Does this pass the Central Hudson Test? City TEST Brewery Yes Is the speech lawful and  Yes truthful? (be careful of opinion  v truth) Yes (family friendly) Does the law seek to implement Yes substantial government  interest? Yes Does the law directly advance  No goal/interest? Yes (kids can see it) Does it go no further than to  No (kids are going to see  accomplish objectives? profanity everywhere  anyways) 


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