Topic 4 - Constitutional Law For Business and E-Commerce

Topic 4: Constitutional Law for
Business and E-Commerce

Learning Objectives
● Describe the U.S. Constitution and the concepts of federalism and separation of
powers.
● Define and apply the Supremacy Clause of the U.S. Constitution
● Explain the Commerce Clause and the federal government’s authority to
regulate interstate and foreign commerce.
● Describe how the Commerce Clause is applied to e-commerce.
Learning Objectives
● Describe the Bill of Rights and the process for amending the U.S. Constitution.
● Explain how freedom of speech is protected by the First Amendment.
● Explain how freedom of religion is protected and how the government may not
promote religion.
● Explain the equal protection doctrine and how it protects persons from unequal
treatment by the government.
Learning Objectives
● Describe the Due Process Clause and substantive and procedural due process.
● Explain how the government can take private property but must pay just
compensation for the taking.
● Explain how the privileges and immunities doctrine protects citizens from
unfavorable treatment by the government.
Constitution of the United States of America
● Federalism and delegated powers
○ The U.S. form of government is federalism
■ Federal government and fifty state governments share powers
○ Enumerated powers: Certain powers delegated to the federal government by the states.
○ Reserved powers: Powers not delegated to the federal government by the Constitution and
reserved for the state governments.
● Doctrine of Separation of Powers
○ Article I - Legislative branch
■ Part of the government that makes federal laws
■ Congress - Senate and the House of Representatives
○ Article II - Executive branch
■ Part of the U.S. government that enforces the federal law
■ President and the vice president
● Doctrine of Separation of Powers
○ Article III - Judicial branch
■ Part of the U.S. government that interprets the law
■ Supreme Court and other federal courts
○ Checks and balances
■ Built into the Constitution to ensure no one branch of the federal government becomes too
powerful
Supremacy Clause
● Establishes that the U.S. Constitution, federal treaties, laws and regulations are
the supreme law of the land
● State and local laws that conflict with valid federal law are unconstitutional
● Preemption doctrine: Doctrine that provides that federal law takes precedence
over state or local law
○ Congress may expressly provide that a federal statute exclusively regulates an area or activity
○ Or local governments are given concurrent powers
Case Study: Supremacy Clause
● Case
○ Mutual Pharmaceutical Company, Inc. v. Bartlett
○ 133 S.Ct. 2466 (2013)
● Facts
○ Bartlett was prescribed a medication made by Mutual. After Bartlett took the drug, she suffered
severe injuries and sued under New Hampshire labeling law.
● Issue
○ Does the federal drug labeling law preempt a stricter state drug labeling law?
Commerce Clause
● Grants Congress the power to regulate commerce with foreign nations, among
the several states, and with Indian tribes
● Federal government has the power to regulate three types of commerce
○ Commerce with Native American tribes
○ Foreign Commerce
○ Interstate Commerce
Commerce with Native American Tribes
● During the formative years of the United States, federal government regulated
commerce with Native American tribes
● Federal government entered into treaties with many Native American nations
● Native Americans are treated as domestic dependent nations with limited
sovereignty
Foreign and Interstate Commerce
● Foreign Commerce Clause: Commerce clause grants the federal government the
authority to regulate foreign commerce
○ Direct and indirect regulation by state or local governments that burdens foreign commerce
violates the clause and is therefore unconstitutional
● Interstate commerce: Commerce that moves between states or that affects
commerce between states
○ Anything that “effects” commerce
Dormant Commerce Clause
● Situation in which the federal government has the Commerce Clause power to
regulate an area of commerce but has chosen not to regulate that area of
commerce
● State can enact laws to regulate that area of commerce with its police power
○ Police Power: Power that permits states and local governments to enact laws to protect or
promote the public health, safety, morals, and welfare.
Dormant Commerce Clause
● Regulation by state should not unduly burden interstate commerce
○ Unduly burden interstate commerce: States may enact laws if the laws do not burden interstate
commerce
Case Study: Commerce Clause
● Case
○ Tennessee Wine and Spirits Retailers Association v. Thomas
○ 139 S.Ct. 2449 (2019)
● Facts
○ Tennessee requires people who wish to sell liquor in the state be residents
● Issue
○ Does Tennessee’s two-year residency requirement to obtain a retail liquor store license violate
the Dormant Commerce Clause
E-Commerce and the Constitution
● Electronic commerce (e-commerce)
○ Parties are permitted to obtain website domain names and conduct business electronically
● E-commerce can be used for:
○ Sales of goods
○ Licensing of intellectual property
○ Sales of services
Bill of Rights and other Amendments to the U.S. Constitution
● Bill of Rights
○ First ten amendments to the U.S. Constitution
○ Guarantees certain fundamental rights to natural persons
○ Protects from intrusive government action by:
■ Federal government
■ State governments (Incorporation doctrine)
Freedom of Speech
● The right to engage in oral, written, and symbolic speech protected by the First
Amendment
○ Fully protected speech
○ Limited protected speech
○ Unprotected speech
● Fully protected speech
○ Cannot be regulated or prohibited by government
○ Can be oral, written, or symbolic
■ Example - Criticizing the President, burning the U.S. flag as protest
Case Study: Freedom of Speech
● Case
○ Iancu v. Brunetti
○ 139 S.Ct 2294 (2019)
● Facts
○ An entrepreneur founded a clothing line under the brand FUCT and was denied a trademark by
the U.S. Patent and Trademark Office
● Issue
○ Does the “immoral and scandalous matter” provision of the Lanham Act violate the Free Speech
Clause of the First Amendment?
Freedom of Speech
● Limited protected speech: Speech that the government may not prohibit but
that is subject to time, place, and manner restrictions.
○ Offensive speech: Speech that is offensive to many members of society
○ Commercial speech: Speech used by businesses, such as advertising
● Unprotected speech: Speech not protected by the First Amendment and may be
forbidden totally
○ Ex. Dangerous speech, child pornography, etc.
Freedom of Religion
● Establishment Clause: First Amendment clause prohibiting the government
from either establishing a state religion or promoting one religion over another
● Free exercise clause: First Amendment clause that prohibits the government
from interfering with the free exercise of religion in the United States
Case Study: Establishment Clause
● Case
○ The American Legion v. American Humanist Association
○ 139 S.Ct. 2067 (2019)
● Facts
○ A war memorial contained a large cross. An atheist organization challenged the presence of the
cross on public property
● Issue
○ Does the cross on public property and its maintenance by a public entity violate the
Establishment Clause?
Equal Protection
● Equal protection clause: A clause that provide that a state cannot deny to any
person within its jurisdiction the equal protection of the laws
○ Laws cannot classify and treat similarly situated persons differently
○ Artificial persons, such as corporations, are also protected
○ Does not make the classification of individuals unlawful
Standards of Review
● Strict scrutiny test: Test that is applied to determine constitutionality of of
classifications by the government based on:
○ Suspect class (e.g., race)
○ Fundamental rights (e.g., voting)
● Intermediate scrutiny test: Applied to classifications based on protected classes
(e.g., gender)
Standards of Review
● Rational basis test: Applied to classifications not involving a suspect or
protected class (e.g., age)
○ Court will uphold government regulation so long as there is a justifiable reason for it
○ Permits much of the government regulation of business
Case Study: Due Process and Equal Protection Clauses
● Case
○ Obergefell v. Hodges
○ 135 S.Ct. 2584 (2015)
● Facts
○ Same sex couples challenged various state laws that defined marriage as a union between one
man and one woman.
● Issue
○ Do laws that prohibit same-secx marriage violate the Due Process Clause and Equal Protection
Clause of the Fourteenth Amendment to the U.S. Constitution?
Due Process
● Due process clause: No person shall be deprived of life, liberty or property
without due process of the law
○ Fifth Amendment - Federal government action
○ Fourteenth Amendment: State and local government action
○ The government is not prohibited from taking a person’s life, liberty or property
■ Must follow due process in order to do so
Due Process
● Substantive due process
○ Requires government statutes, ordinances, regulations, or other laws to be clear on their face and
not overly broad in scope
○ Tested using a reasonable person’s understanding of the law
○ Laws failing the test are declared void for vagueness
● Procedural due process
○ Requires the government to give a person proper notice and hearing of legal action before
depriving that person of life, liberty, or property.
Government Taking of Property
● Takings clause
○ A clause that allowes the government to take property for public use.
■ Requires:
● Public use
● Just compensation
Privileges and Immunities
● Privileges and Immunities Clause
○ “The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the
several states”
○ No state shall make or enforce any law that shall abridge the privileges or immunities of the
citizens of the United States
● The clauses prohibit states from enacting laws that unduly discriminate in favor
of their residents
● The clauses apply only to citizens of the and do not protect corporations or
aliens

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