Constitutional, Statutory, Administrative, and Common Law Business Law I Constitutional, Statutory, Administrative, and Common Law

The Constitution An instrument of power Government can exercise powers only granted by the Constitution Sources of regulatory power: Commerce Clause Taxing power A symbol of restraint Government power is restricted by the individual rights safeguarded by the Constitution Sources of restraint: Various amendments (freedom of speech, freedom of religion, privilege against unreasonable search and seizure)

Compromises in the Constitution Separation of Powers The Federal government is divided into three branches -- Executive, Legislative, and Judicial. Each branch is independent and equal. Each is a balance to the power of the others. Congress can pass statutes, but... The President can veto a bill, but... Congress can override a veto, but... The courts can rule a law unconstitutional, but... Congress has to approve the President’s nominee... The President can appoint federal judges, but...

Compromises in the Constitution (cont’d) Federalism -- the national government’s power is limited to only the issues listed in Article I, §8. Individual Rights -- the original Constitution did not mention rights of citizens, so the first 10 amendments (Bill of Rights) spelled those out.

Congressional Powers Article I establishes Congress with two houses. Each state has 2 Senators; number of Representatives is relative to each state’s population. Article I gives Congress powers. Congress can create and enact legislation, impose taxes, spend money, create copyrights, support the military and declare war. Congress regulates commerce with other nations and between different states. Each state regulates commerce within its own borders. Substantial Effect Rule -- Congress may regulate any activity which has a substantial economic effect on interstate commerce.

Executive Power Article II defines the powers and responsibilities of the President -- in general he/she is to enforce the nation’s laws. Appointment -- The president nominates federal judges (including Supreme Court Justices) and heads of most administrative agencies. Legislation -- The president and his advisors can propose bills to Congress and the president can veto bills from Congress. Foreign Policy -- The president coordinates international efforts, negotiates treaties and is the Commander in Chief of the military, but he may not declare war.

Case Analysis Executive Powers Youngstown Sheet & Tube Co. v. Sawyer, United States Supreme Court, 1952 Facts Issue Decision Reasoning

Judicial Power Article III creates the Supreme Court and permits Congress to create lower federal courts. Federal courts have two key functions: adjudication and judicial review. Adjudication -- Federal courts hear civil and criminal cases within their jurisdiction. Judicial Review -- Federal courts can declare a statute or governmental action unconstitutional. Opponents claim that the Constitution does not grant this power to the courts; and this takes power away from citizens. Supporters claim that the Constitution gives the judicial system the power to interpret laws and ensures a consistent application of the Constitution.

Case Analysis Judicial Review You Be the Judge - Kennedy v. Louisiana, 128 S. Ct. 2641, United States Supreme Court, 2008 Facts Issue Decision Reasoning APPEALS court STATE ruling AFFIRMED

Protected Rights First Amendment - Free Speech The First Amendment states, “Congress shall make no law… abridging the freedom of speech.” Speech includes non-verbal communication, such as signs, symbols and acts (like flag-burning). Political speech -- about a politician or political process is protected, and can be found illegal only if it is intended and likely to promote lawless conduct. Legal speech may be limited in time, place & manner. Obscenity is not protected by the Constitution. Commercial speech -- designed to propose a commercial transaction -- is regulated more strictly than other speech and may be outlawed if false or misleading.

Case Analysis First Amendment – Free Speech Texas v. Johnson, 491 U.S. 397, 109 S. Ct. 2533, 1989 U.S. Lexis 3115, United States Supreme Court, 1989 Facts Issue Decision Reasoning

Protected Rights Fifth Amendment - Due Process and the Takings Clause “No person shall be… deprived of life, liberty, or property without due process of law; nor shall private property be taken for public use, without just compensation.” Procedural Due Process -- the government must go through procedures to ensure that the result is fair. The process due is in proportion to what the government is trying to take from the person. The Takings Clause -- when the government takes private property for public use, it must pay a fair price.

Protected Rights Fourteenth Amendment – Equal Protection “No state shall… deny to any person within its jurisdiction the equal protection of the laws.” The government must treat people equally, yet they frequently make distinctions among classes of people for different treatment. Is this legal? Usually acceptable -- based on economic and social relations (such as higher income paying a higher percentage income tax) are usually upheld. Sometimes acceptable -- based on gender are sometimes upheld, if there is a good reason. Not acceptable -- based on race, ethnicity and fundamental rights are almost never upheld.

Statutory Law Most new law is statutory, that is, it is legislation passed by either a state legislature or the Congress of the United States. Citizens who vote have some control over statutory law. We elect the state congressional representatives and the United States Senators and Representatives.

How New Laws are Made Any member of Congress can initiate a bill, or proposed law. A bill is debated in a committee in the house where it was introduced. It then goes to the full house for a vote. If it passes both houses this way, it goes to the President for his signature. A President’s signature turns a bill into law. If the President does not sign the bill (veto), Congress can override the veto by passing the bill again, with a two-thirds margin.

How New Laws Are Made House of Representatives Senate President If signed, the bill becomes law If vetoed, it goes back to the Congress, where it must pass both houses by a 2/3 majority. Once both houses pass the compromise bill, it is sent to the President to be signed. House of Representatives Senate President Armed Services Agriculture Ways and Means Banking, Finance, and Urban Affairs Education and Labor Judiciary Committee Major House Committees Aeronautical and Space Sciences Appropriation Foreign Relations Major Senate Committees If it passes there, it goes to the other house (House to Senate or Senate to House). Conference Committee If the second House of Congress made any changes, or amendments, to the bill, it must go to a Conference Committee, made up of members of both houses. Here, they work out compromises between the two different versions of the bill. The compromise bill then goes back to both houses for a final vote. After it passes committee, the bill goes to the full body of that house for a vote. It is assigned to a committee and the process repeats. A bill, or proposed law, is introduced in the House of Representatives or the Senate and then assigned to a committee for discussion and voting.

Why Are Bills Proposed? New issues or new worries – such as employment discrimination and Internet privacy or copyright issues Unpopular judicial rulings – if Congress disagrees with a judicial interpretation of a statute, it may pass a new statute to “undo” the decision of the court, unless the decision at hand is based on the U.S. Constitution. Criminal law – must be set forth in clear terms through statutes rather than left to judicial interpretation.

Common Law Judge-made law; made up of all the decisions made by appellate courts. Two hundred years ago, almost all law was common law; most new law is statutory. Common law predominates in tort, contract, and agency law; it is important in property and employment law. Based on stare decisis, meaning “let the decision stand” (previous decisions are generally upheld in similar cases.) Incorporates predictability and flexibility.

Changes in Common Law Over time, changes in society’s norms have an effect on long-standing common law. An example of this is the law that applies to bystanders in emergencies. Under common law, bystanders have no obligation to assist a victim in an emergency. Over time, courts have created exceptions, making employers obliged to help an employee who is suddenly stricken with an emergency situation when the employer is present. Some courts now hold that anyone witnessing an extreme situation or if there is a special relationship, such as patient-therapist, should be required to help, though this is not universal.

How Stare Decisis Permits Change Courts have broad discretion in selecting appropriate precedent. Courts may choose which facts to stress and which to ignore in selecting precedent. The rule of law from the precedent case may be interpreted broadly or narrowly. Courts may distinguish the precedent case. Appellate courts may overrule a precedent case.

Case Analysis Bystander Obligations Tarasoff v. Regents of the University of California, 17 Cal. 3d 425, 551 P.2d 334, 131 Cal. Rptr. 14, Supreme Court of California, 1976 Facts Issue Decision Reasoning

Administrative Law Federal agencies such as the Federal Aviation Agency (FAA) and the Federal Trade Commission (FTC) and the Bureau of Land Management, all have the power to make regulations which affect citizens and businesses. Agencies were -- and are -- created to fulfill a need. Someone needs to oversee changing technologies and practices and their effects on society. An agency is created when Congress passes enabling legislation, describing a problem and defining the agency’s powers. Agencies often have considerable power in their areas of specialty, sometimes leading to controversy. The Administrative Procedure Act regulates how agencies operate, in an attempt to reduce the controversy.

Administrative Agencies of the Federal Government

Administrative Agencies Creation Congress passes enabling legislation specifying the powers of the agency Features Headed by a Board or Commission Members nominated by President Appointments confirmed by Senate Appointees drawn from the two major political parties Powers Rule making Investigative Adjudicatory

Power of Agencies -- Rulemaking Two types of rules: Legislative rules -- require businesses and people to act a certain way; have the effect of a Congressional statute. Interpretive rules -- these do not change the law; they define or apply the laws to new situations.

Power of Agencies -- Investigation Voluntary -- Some businesses freely give information and readily comply with agency recommendations. Subpoena -- An order to appear at a hearing and produce evidence, sometimes documents. Must be relevant to the investigation and under the agency’s jurisdiction, or area of authority. Must not be unreasonably burdensome on the business. Must not be privileged; this means that a corporate officer may not be required to incriminate himself.

Power of Agencies -- Adjudication Adjudicate -- means to hold a hearing, then decide how to proceed with an issue. Procedures for adjudication: A hearing before an administrative law judge. Parties have counsel, but there is no jury. Informal; both sides present evidence. Judge makes ruling on testimony and evidence. If parties are unhappy with results -- Loser may appeal to an appellate board. Appellate board may make a de novo decision, and ignore the administrative law judge’s decision. Appeals go to a federal court.

Methods of Ensuring Predictability in the Law Statutes Public hearings Publication of enacted statutes No ex post facto laws Court decisions Stare decisis (following past precedent) Administrative Rules Notice of intent to issue rules Publication of final rules

Quiz Matching Questions Statute Equal Protection Clause Judicial Review Takings Clause Stare Decisis Promulgate 1.  The power of the federal courts to examine the constitutionality of statutes and acts of the government. 2.  Part of the Constitution that requires compensation in eminent domain cases. 3.  The rule that requires courts to rule based on precedent. 4.  The act of an administrative agency creating a new rule. 5.  A law passed by a legislative body. 6. Generally prohibits regulations based on gender, race, or fundamental rights.

Quiz True/False Questions The government may not prohibit a political rally, but it may restrict when and where demonstrators meet. The Due Process Clause requires that any citizen is entitled to a jury trial before any right or property interest is taken. The government has the right to take a homeowner’s property for a public purpose. F T

Quiz True/False Questions A subpoena is an order punishing a defendant who has violated a court ruling. A bystander who sees someone in peril must come to that person’s assistance, but only if he/she can do so without endangering him/herself or others. Administrative agencies play an advisory role in the life of many industries but do not have the legal authority to enforce their opinions. F F

End of Constitutional, Statutory, Administrative, and Common Law