Business Its Legal Ethical and Global Environment 9th Edition by Marianne M. Jennings - Test Bank

Business Its Legal Ethical and Global Environment 9th Edition by Marianne M. Jennings – Test Bank

 

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CHAPTER 5—BUSINESS AND THE CONSTITUTION

 

TRUE/FALSE

 

1. Article I of the U.S. Constitution establishes the executive branch of government.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Article I

 

2. Article III of the U.S. Constitution establishes the judicial branch of government.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Article III

 

3. The executive branch of the federal government has no enforcement authority.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   executive branch

 

4. The Bill of Rights contains the Commerce Clause.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Bill of Rights

 

5. The Bill of Rights covers freedom of speech.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Bill of Rights

 

6. The Commerce Clause authorizes Congress to regulate interstate and international commerce.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Commerce Clause

 

7. If the underlying activity Congress attempts to regulate is not economic in nature, authority for such regulation is not part of the Commerce Clause.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   interstate

 

8. The Supreme Court uses the direct and immediate effect test in reviewing congressional regulation of interstate commerce.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   interstate

 

9. States can never regulate interstate commerce.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   interstate

 

10. State regulation of commerce is controlled by both the commerce and supremacy clauses.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   state regulation

 

11. One state can impose a tax on a corporation’s property if the corporation does any business in the state.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   taxation

 

12. A state cannot tax catalogue sales made to residents in the state from firms located outside the state.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   taxation

 

13. In supremacy clause cases, legislative intent of Congress is examined.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Supremacy Clause

 

14. In supremacy clause cases, the pervasiveness of the regulatory scheme is examined.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Supremacy Clause

 

15. The states’ police powers are subject to a balancing test.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   police power

 

16. During President Obama’s State of the Union address in 2009, Justice Roberts was captured on camera visibly disagreeing with the President about that case’s outcome.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Supreme Court

 

17. Corporate political speech is afforded the same First Amendment protection as individual political speech.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   corporate speech

 

18. The Fifth and Fourteenth Amendments provide procedural due process protections for corporations and individuals.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   due process

 

19. An unconstitutionally vague statute cannot be a basis for criminal prosecution.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   vagueness

 

20. Substantive due process is the same as procedural due process.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   due process

 

21. The First Amendment does not cover corporate ads on ballot propositions.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   corporate speech

 

22. Corporate political speech enjoys less First Amendment protection than individual political speech.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   corporate speech

 

23. Procedural due process rights exist in administrative, civil, and criminal proceedings.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   due process

 

24. A state law that covers all businesses cannot give in-state businesses an advantage over out-of-state businesses.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   interstate

 

25. Advertising by professionals is permitted because of First Amendment protections.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   first amendment

 

26. The Altria Group case held that federal law (here the Labeling Act) pre-empts state law that deals with the duty not to deceive.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   preemption

 

27. Corporations cannot make political contributions because of First Amendment constraints.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   corporate speech

 

28. The U.S. Supreme Court has always found interstate commerce is involved regardless of how small the business or its impact.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   corporate speech

 

29. The U.S. Supreme Court has prohibited regulation of advertising by professionals.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   corporate speech

 

30. The 2007-2008 data shows that, once again, the American Bankers Association is the largest dollar contributor to political candidates through its PAC.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   political contributions

 

31. Chief Justice Roberts not only clerked for former Chief Justice Rehnquist but also succeeded him as Chief Justice of the Supreme Court.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Chief Justice Roberts

 

32. The Ollie’s Barbeque case and the Morrison case have nothing in common legally because one involved interstate commerce and the other case involved intrastate commerce.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   commerce clause

 

33. The First Amendment prohibits state regulation of false advertising.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   corporate speech

 

34. To be constitutional, federal statutes regulating commerce within a state must involve some economic activity.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Commerce Clause

 

35. There are no limitations on what constitutes an effect on interstate commerce for purposes of constitutionality of a federal statute.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Commerce Clause

 

36. Federal regulation of the Internet is unconstitutional under the commerce clause.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Commerce Clause

 

37. California cannot impose taxes on a corporation that is incorporated in Arizona and doing business in California and thirty-two other states.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   interstate

 

38. A statute that requires only out-of-state milk companies to undergo additional testing for their products is unconstitutional.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Commerce Clause

 

39. So called “soft money” donations are protected under the First Amendment.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   First Amendment

 

40. The Fifth Amendment and Fourteenth Amendment are the “due process” amendments.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   due process

 

41. Citizen’s United involves the genesis of the sub-prime loan scandals.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   First Amendment

 

42. McCain-Feingold refers to the Bipartisan Campaign Reform Act of 2002.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   political speech

 

43. The Nike dispute dealt with the right of a company to publish editorials and letters to the editor in its defense.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   commercial speech

 

44. States have authority over international commerce that comes within their borders and can circumvent U.S. treaties.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Commerce Clause

 

45. Taxes on sales across the Internet will be subject to constitutional protections and constraints.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   taxes

 

46. The U.S. Supreme Court declared statutory restrictions on distribution of pornography over the Internet unconstitutional.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   pornography

 

47. The Internet Tax Freedom Act of 1998 prohibits sales tax on Internet transactions.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   taxes

 

48. The Commerce Clause was the basis for federal authority for passing and enforcing the Civil Rights Act.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   interstate

 

49. In those areas in which federal laws and regulation are extensive and detailed, the likelihood is that the Supremacy Clause precludes state regulation.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Supremacy Clause

 

50. A state law that exempts in-state businesses from additional licensing and inspections but that applies to out-of-state businesses is not a proper exercise of police powers.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   police power

 

51. Requiring farmers shipping goods from outside the state to use only in-state companies for transportation is not a proper exercise of the police power.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   police power

 

52. Advertising is commercial speech and cannot be limited because of First Amendment protections.

 

ANS:  F                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   corporate speech

 

53. An unconstitutionally vague statute is a violation of substantive due process rights.

 

ANS:  T                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   due process

 

MULTIPLE CHOICE

 

1. Which of the following sections of the U.S. Constitution establishes the judicial branch of government?

a.	Article I
b.	Article II
c.	Article III
d.	none of the above

 

 

ANS:  C                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   U.S. Constitution

 

2. Which of the following is currently the test for determining whether conduct is or is not interstate commerce?

a.	direct and immediate effect test
b.	affectation doctrine
c.	regulation of goods and not businesses
d.	none of the above

 

 

ANS:  B                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   interstate

 

3. The city of Mesa has developed a street improvement plan that will add lanes to one of the major north/south corridors. Because of the addition of the lanes, businesses along the corridor will lose frontage. However, none of the businesses will be required to move. Which of the following statements is true?

a.	The city need not compensate the businesses since they will still remain intact.
b.	The city must compensate the businesses for taking.
c.	The city cannot take land for this purpose.
d.	The city can attach “0” value to the frontage.

 

 

ANS:  B                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   eminent domain

 

4. The Supremacy Clause:

a.	controls whether Congress or the states have the authority to regulate commerce.
b.	gives Congress full authority to regulate all areas of commerce.
c.	is never applied in state regulation cases.
d.	none of the above

 

 

ANS:  A                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Supremacy Clause

 

5. Which of the following is not a requirement for a valid state tax?

a.	Tax cannot discriminate against interstate business.
b.	Tax cannot apply to businesses in interstate commerce.
c.	There must be a sufficient nexus between the state and the business being taxed.
d.	none of the above

 

 

ANS:  B                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   taxation

 

6. The state of Montana, in response to “outsiders” controlling ranch properties, has passed a statute that requires 6 months of residency before an individual can purchase 40 or more acres of land. The statute is:

a.	a legitimate exercise of state powers.
b.	an unconstitutional burden on interstate commerce.
c.	constitutional because the statute applies only to intrastate lands.
d.	constitutional because all buyers must be residents.

 

 

ANS:  B                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Commerce Clause

 

7. Which of the following is not a relevant issue examined in a preemption issue?

a.	legislative history
b.	level of detail in the federal regulation
c.	benefits of federal regulation
d.	degree of conflict
e.	All of the above are relevant issues.

 

 

ANS:  E                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Supremacy Clause

 

8. The police power of the states:

a.	has no federal limitations.
b.	can extend to interstate business.
c.	has been severely curtailed in recent years.
d.	none of the above

 

 

ANS:  B                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   police power

 

9. The balancing test:

a.	is one applied in supremacy issue cases.
b.	is one applied in state regulation of interstate commerce.
c.	involves the exercise of state taxation powers.
d.	none of the above

 

 

ANS:  B                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   interstate

 

10. The First Amendment:

a.	does not afford protection for corporate political speech.
b.	does not permit regulation of corporate advertising.
c.	provides limited protection for corporate political speech.
d.	is applied differently to commercial speech.
e.	none of the above

 

 

ANS:  E                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   First Amendment

 

11. In administrative proceedings, procedural due process requires:

a.	a trial in which the party charged can be heard.
b.	notice of hearing.
c.	right to an attorney.
d.	none of the above

 

 

ANS:  B                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   due process

 

12. Advertising by lawyers:

a.	can be prohibited in the interest of protecting the public.
b.	enjoys no First Amendment protections.
c.	can be regulated but not prohibited.
d.	none of the above.

 

 

ANS:  C                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   First Amendment

 

13. Corporate political speech:

a.	enjoys full First Amendment protection.
b.	can be regulated.
c.	can be prohibited.
d.	none of the above

 

 

ANS:  A                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   corporate speech

 

14. A new statute passed by the state of Vermont prohibits the sale of any maple syrup not produced in Vermont anywhere in Vermont. The legislators maintain that the statute is for the health and welfare of Vermont residents because the state of Vermont regulates producers to ensure quality and sanitation standards. The new statute is:

a.	constitutional as an exercise of the health and safety regulatory powers of the state.
b.	constitutional as a control of intrastate commerce.
c.	constitutional because it applies only to sales in the state.
d.	unconstitutional because of its excessive approach.

 

 

ANS:  D                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   interstate

 

15. Which of the following is not part of the amendments to the U.S. Constitution?

a.	freedom of speech
b.	supremacy clause
c.	due process
d.	privacy

 

 

ANS:  B                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   amendments

 

16. The Bellotti doctrine gives corporations:

a.	less First Amendment protections for political speech than individuals have.
b.	the same First Amendment protections for political speech than individuals have.
c.	more First Amendment protections for political speech than individuals have.
d.	no First Amendment protections for political speech than individuals have.

 

 

ANS:  B                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Bellotti doctrine

 

17. Which of the following is not a right protected in the Bill of Rights?

a.	noninterference with contracts
b.	freedom of speech
c.	right to privacy
d.	right to due process

 

 

ANS:  A                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Bill of Rights

 

18. Which two amendments to the U.S. Constitution provide for equal protection?

a.	First and Fourth
b.	Fourth and Fifth
c.	First and Fifth
d.	Fifth and Fourteenth

 

 

ANS:  D                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   equal protection

 

19. Under the Commerce Clause, the authority to regulate foreign commerce is given to:

a.	Congress.
b.	the executive branch.
c.	the individual states.
d.	only the Senate.

 

 

ANS:  A                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Commerce Clause

 

20. Police power is:

a.	the states’ authority to bypass the Fifth Amendment.
b.	the states’ authority to conduct searches under the Fourth Amendment.
c.	government agencies’ authority to conduct a search of private property at any time.
d.	the states’ power to pass laws to promote public welfare and health and safety .

 

 

ANS:  D                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Commerce Clause

 

21. Which justice was seen on camera disagreeing with President Obama during his Stat of the Union address in 2009?

a.	Justice Roberts
b.	Justice Scalia
c.	Justice Alito
d.	Justice Thomas

 

 

ANS:  C                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Supreme Court

 

22. The state of Arizona has just passed a mandatory seat belt law that will require anyone traveling in Arizona to put on his/her seat belt. Several travelers from other states that do not have such seat belt laws have brought suit challenging the constitutionality of the Arizona law as an undue burden on interstate commerce. What test will the court apply in reviewing the statute?

a.	the apportionment test
b.	the impairment test
c.	the balancing test
d.	none of the above

 

 

ANS:  C                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Commerce Clause

 

23. What authority would the state of Arizona claim for passing a mandatory seat belt law requiring anyone traveling in Arizona to put on his/her seat belt?

a.	preemption clause
b.	police power
c.	the nexus power
d.	none of the above

 

 

ANS:  B                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Commerce Clause

 

24. Spiegel, Inc., has a catalog merchandise return facility in Nevada. Spiegel employs many phone operators for processing return requests, and merchandise is returned to the facility and stored there for later dispatch. The state of Nevada has proposed taxing Spiegel’s full inventory based on the theory that it could have passed through the Nevada facility. Spiegel’s main warehouse is in Chicago, Illinois. Nevada:

a.	has the power to tax Spiegel’s full inventory because of its location in the state.
b.	has the power to tax Spiegel so long as all merchants in Nevada are taxed the same way.
c.	has properly apportioned its tax since it only applies to inventory and not income.
d.	does not have the authority under the U.S. Constitution to tax Spiegel’s full inventory.

 

 

ANS:  D                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   taxation

 

25. The purpose of the Supremacy Clause is to:

a.	resolve conflicts of federal and state law by declaring the federal law supreme.
b.	resolve conflicts of federal and state law by declaring state law supreme.
c.	allow Congress to preempt all state regulation of interstate commerce.
d.	none of the above

 

 

ANS:  A                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Supremacy Clause

 

26. Which case ruled that when acting as a private person even the president of the United States is not above the law?

a.	Citizen’s United
b.	Nixon v. Administrator of General Services
c.	Clinton v. Jones
d.	Altria Group

 

 

ANS:  C                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   precedent

 

27. Which of the following actions by a corporation would enjoy full First Amendment protection (i.e., could not be regulated)?

a.	a media campaign by a tobacco company against a cigarette tax increase
b.	a media campaign for soap that inaccurately labels the soap “hypoallergenic”
c.	advertising by an attorney that is misleading with respect to the fees charged for services
d.	a mailing that contains offers for the sale of fraudulent securities

 

 

ANS:  A                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   First Amendment

 

28. Which of the following would not be a taking for purposes of eminent domain?

a.	the condemnation of land for use in a low-income housing project
b.	the requirement that beach-front land owners allow public access to the beach through their lots
c.	the placement of a 4″ ´ 6″ cable box on the roof of an apartment building by a public cable firm
d.	All of the above are takings.

 

 

ANS:  D                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   eminent domain

 

29. The rights of land owners in eminent domain are protected by the:

a.	First Amendment.
b.	Fifth Amendment.
c.	Fourteenth Amendment.
d.	Fourth Amendment.

 

 

ANS:  B                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   eminent domain

 

30. Substantive due process rights:

a.	no longer exist.
b.	have been changed to procedural due process rights.
c.	are found in criminal procedure statutes.
d.	prevent laws that take property without reason and justification.

 

 

ANS:  D                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   substantive due process

 

31. The state of Arizona has just passed a law requiring that oranges shipped into the state from growers located outside of the state meet certain minimum size requirements. The size requirements do not apply to oranges grown in Arizona. The new Arizona statute is:

a.	a permissible regulation of commerce.
b.	permissible so long as the statute promotes the health and welfare of the state’s residents.
c.	an impermissible regulation of interstate commerce.
d.	constitutional if there is a regulatory protest means available.

 

 

ANS:  C                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   corporate speech

 

32. South Dakota is the location for many national banks’ credit card operations. How much income tax could the state of South Dakota collect on the banks that operate their credit card divisions there?

a.	South Dakota could collect tax on the banks’ full income.
b.	South Dakota cannot collect income tax unless the banks are headquartered or incorporated there.
c.	South Dakota cannot collect any income tax from foreign corporations.
d.	South Dakota can collect income taxes from earnings on the credit card operations.

 

 

ANS:  D                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   taxation

 

33. The state of Wyoming has just passed a law requiring all cars entering the state to be equipped with side air bags. The Wyoming requirement:

a.	is constitutional because it does not apply to commerce.
b.	is unconstitutional.
c.	is constitutional so long as Wyoming residents are subject to the same rule.
d.	is constitutional if side airbags are technologically feasible.

 

 

ANS:  B                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Commerce Clause

 

34. Congress passed a law permitting those who were the victims of hate crimes to bring suit in federal district court to recover from the perpetrators of the hate crimes. Such a statute:

a.	is a legitimate exercise of Congressional authority.
b.	is an unconstitutional expansion of the Commerce Clause.
c.	is constitutional so long as the state agrees.
d.	is constitutional so long as there is an economic impact of hate speech.
e.	none of the above

 

 

ANS:  B                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Commerce Clause

 

35. Congress passed a law prohibiting any organization from spending money on ads against ballot propositions. The legislative history shows that Congress found that organizations spend far too much money on these ads and regular citizens’ voices cannot be heard and disseminated against such powerful communication. The statute:

a.	is an unconstitutional violation of the First Amendment.
b.	is constitutional so long as the factual findings are adequate.
c.	is constitutional because there are no money limits, only a prohibition.
d.	is constitutional if it applies to corporations as well as nonprofits.
e.	none of the above

 

 

ANS:  A                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   First Amendment

 

36. Which of the following pairs is incorrect?

a.	Article III of the U.S. Constitution – the Courts
b.	The Bill of Rights – First Ten Amendments to the U.S. Constitution
c.	The Fifth Amendment – due process
d.	The First Amendment – substantive due process
e.	The Fourteenth Amendment – due process

 

 

ANS:  D                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Constitution

 

37. Where in the U.S. Constitution are the provisions governing a student’s right to a hearing prior to suspension from school?

a.	First Amendment
b.	Commerce Clause
c.	Article III
d.	Article II
e.	Fifth Amendment

 

 

ANS:  E                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Constitution

 

38. A company is incorporated in Pennsylvania and has offices in Michigan, Ohio, West Virginia and Indiana. Which states may tax the business?

a.	Pennsylvania only
b.	Michigan, Ohio, West Virginia, Indiana
c.	only those states in which it has physical contact with the customers
d.	only those states which recognize other states’ taxation policy
e.	Pennsylvania, Michigan, Ohio, West Virginia and Indiana proportionately

 

 

ANS:  E                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   taxation

 

39. For state regulation of interstate commerce to be constitutional:

a.	the state’s purpose must be to protect the public’s health and safety.
b.	the state cannot place an undue burden on interstate commerce.
c.	either a or b
d.	both a and b

 

 

ANS:  D                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Commerce Clause

 

40. LL Bean has warehouse facilities in Maine, Nevada, Washington, Idaho, Utah, and North Dakota.

a.	Any states in which LL Bean does business can tax the warehouse inventory.
b.	Any states in which LL Bean has warehouses can tax LL Bean on all of its inventory.
c.	Any state in which LL Bean has warehouses can tax LL Bean on the inventory in that state.
d.	none of the above

 

 

ANS:  C                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   taxation

 

41. Son-of-Sam laws:

a.	deal with political contributions by corporations.
b.	provide for taxation differences on interstate vs. intrastate commerce.
c.	prevent perpetrators from profiting from their crimes.
d.	none of the above

 

 

ANS:  C                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   free speech

 

42. The Bipartisan Campaign Reform Act:

a.	regulates soft money use.
b.	regulates PACs.
c.	outlawed think tanks.
d.	none of the above

 

 

ANS:  A                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   political speech

 

43. The Bipartisan Campaign Reform Act is more commonly referred to as the _____ law.

a.	Violence Against Women
b.	McCain-Feingold
c.	PAC Pre-emption
d.	Rainbow Coalition

 

 

ANS:  B                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   political speech

 

44. Which of the following areas has Congress preempted?

a.	auto vehicle safety standards
b.	aircraft routes
c.	both a and b
d.	none of the above

 

 

ANS:  C                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   Supremacy Clause

 

45. Which areas of commercial speech are fully and constitutionally regulated?

a.	political donation
b.	corporate campaigns on issues with referenda
c.	speech on social issues
d.	All of the above are fully and constitutionally regulated.

 

 

ANS:  A                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   First Amendment

 

46. Jamie has been accused of plagiarizing his sociology term paper from an Internet site. His professor has given him a failing grade and there is no right to a hearing or an appeal. Jamie asks, “What rights do I have?”

a.	Some form of due process: hearing or vote or right of appeal to an administrator or board.
b.	No rights because Jamie goes to a private school.
c.	No rights because it is the teacher’s decision only.
d.	none of the above

 

 

ANS:  A                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   due process

 

47. Which of the following qualifies as a presence in a state for purposes of collecting sales tax from an Internet merchant?

a.	having an office in the state
b.	having an employee who works in the state
c.	owning or leasing property in the state
d.	All of the above constitute a qualifying presence.

 

 

ANS:  D                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   taxes

 

48. In which of the following areas of constitutional law is the balancing test used?

a.	state police powers
b.	Congressional regulation of commerce
c.	preemption
d.	The balancing test is used in all of the above areas of constitutional law.

 

 

ANS:  A                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   police power

 

49. In which of the following areas of constitutional law is the nexus test used?

a.	state police powers
b.	state regulation of commerce
c.	state taxation of commerce
d.	All of the above areas use the nexus test.

 

 

ANS:  C                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   taxation

 

50. State and local governments can exercise eminent domain under the Kelo decision:

a.	only when there is a clear public purpose use proposed for the land being taken.
b.	if there is a plan for economic development or revitalization.
c.	only if the land will be used by another public entity.
d.	both a and c

 

 

ANS:  B                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   eminent domain

 

51. Contributions to PACs are protected by:

a.	the due process clause.
b.	the First Amendment.
c.	various state laws, but not protected at the federal level.
d.	none of the above

 

 

ANS:  B                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   First Amendment

 

52. Janis Hoffman was involved in a tailgate brawl that took place in the parking lot of State U just prior to one of State’s football games. Janis and others have charges pending with the county attorney. State U has filed charges against Janis and the others for violation of State U’s code of conduct that prohibits disorderly conduct on university property. She has been suspended for a semester. When she requested a hearing she was told that the charges by the county were sufficient proof for her university misconduct charges.

a.	State U officials are correct; the criminal charges will give Janis her due process.
b.	State U officials must still provide Janis with a hearing on the University charges.
c.	The University charges will not stand until Janis is convicted.
d.	both b and c

 

 

ANS:  B                    PTS:   1                    NAT:  AACSB: Analytic

TOP:   due process

 

ESSAY

 

1. The State of Louisiana’s Sunday closing law provides that “all stores, shops, saloons, and all places of public business, licensed under the law of Louisiana or under any parochial or municipal law, shall be closed on Sunday.” The statute had 25 exemptions including drug stores, hotels, restaurants, theaters, the 1984 Exposition, and stores occupying a space of 1,500 square feet or less. Home Depot wishes to challenge the closing law on its constitutionality. What constitutional provisions would apply?

 

ANS:

The state is using its police power, but the statute may have the effect of favoring small local businesses over the large interstate chains. Also, the effect may raise issues of substantive due process – a right is taken away without discussion. See for full details: Home Depot Inc. v. Guste, 773 F.2d 616 (5th Cir. 1985).

 

PTS:   1                    NAT:  AACSB: Analytic                           TOP:   police power

 

2. The city of Renton, Washington, has passed an ordinance that prohibits adult motion picture theaters from locating within 1,000 feet of any residential zone, single- or multiple-family dwelling, church, park, or school. Several businesses have brought suit challenging the constitutionality of the ordinance. What would be the basis for such a suit? Discuss possible results.

 

ANS:

The businesses brought the challenge alleging the regulation was: (1) an infringement upon their First Amendment rights, and (2) an excessive exercise of the police power.

 

The Court upheld the regulation – the speech itself was not prohibited – only the time, place, and manner were regulated. The Court also found a legitimate state interest in the regulation (near homes) of pornography. See City of Renton v. Playtime Theaters, Inc., 475 U.S. 41 (1986).

 

PTS:   1                    NAT:  AACSB: Analytic | AACSB: Reflective Thinking

TOP:   police power | pornography

 

3. Trailer-on-flatcar (TOFC or “piggyback”) service is a form of mixed train and truck transportation that enables a carrier to transport a trailer and its contents over rail on a flatcar and then to haul the trailer on the highway. The shipment remains within the trailer during the entire journey. The Interstate Commerce Commission (ICC) prohibits states from regulating this mode of shipment since the ICC has extensive regulations in the rail and interstate trucking industry. Discuss the constitutional implications of this decision.

 

ANS:

Students should discuss the issues of preemption and interstate commerce, state police power, and so forth. See ICC v. Texas, 479 U.S. 450 (1987).

 

PTS:   1                    NAT:  AACSB: Analytic | AACSB: Reflective Thinking

TOP:   interstate commerce

 

4. The Lake Nixon Club near Little Rock, Arkansas, had a racial restriction on the use of its 232-acre amusement area, which included areas for swimming, boating, sunbathing, picnicking, miniature golf, and snack bars. Discuss how an interstate commerce connection might be found so that the federal civil rights act could be used to invalidate the restriction.

 

ANS:

Students should compare to Ollie’s Barbecue – food shipments, interstate travelers, supplies, and so on. See Daniel v. Pane, 395 U.S. 298 (1969).

 

PTS:   1                    NAT:  AACSB: Analytic | AACSB: Reflective Thinking

TOP:   interstate commerce

 

5. Discuss the ruling and the importance of Citizen’s United.

 

ANS:

Parts of the BCRA violates the First Amendment even for corporations. Section 441b is an outright ban on political speech. Justice Kennedy said for the Supreme Court that is unlawful because the First Amendment confirms the right to think for ourselves.  “The civic discourse belongs to the people and the government may not prescribe the means used to conduct it.”

 

PTS:   1                    NAT:  AACSB: Analytic                           TOP:   precedent

 

6. The state of Arizona follows a merit review process of proposed securities offerings. The Securities Division reviews proposed offerings to look for problems with fraud. This review is done in addition to the SEC review at the federal level. The state regulators have recently issued an interpretation that provides the state can stop all stock offerings of any firms doing business in Arizona – even if the stock will not be sold to Arizona residents. Can the regulators constitutionally exercise this power?

 

ANS:

In Arizona Corporation Commission v. Media Products, Inc., 736 P.2d 527 (Az. 1989), the Arizona Supreme Court said no. Such an exercise of power was preempted by federal securities laws, and Arizona could not regulate all securities offerings from its state.

 

PTS:   1                    NAT:  AACSB: Analytic                           TOP:   U.S. Constitution

 

7. The state of Colorado has passed Amendment 2, an amendment to the state’s constitution that prohibits classification of homosexuals as a protected category for purposes of civil rights. Does Amendment 2 violate any provisions of the U.S. Constitution?

 

ANS:

In Romer v. Evans, the U.S. Supreme Court held that Amendment 2 did not further a legislative purpose, but made them unequal to everyone else. Colorado’s Amendment 2 was not permitted and was declared to violate the equal protection clause.

 

PTS:   1                    NAT:  AACSB: Analytic                           TOP:   U.S. Constitution

 

8. The state of Arizona has passed a tax reform bill that taxes property owners at a specified rate with the exception of mines and utilities. Both mines and utilities are assigned a higher rate of tax for their properties. A state legislator commented on the bill, “In some of these small towns, without the higher rate of taxation for mines and utilities, the schools in these towns would suffer because the property is worth nothing and there are no property tax dollars coming in. We have to tax these area’s wealthiest citizens at a different rate and those citizens happen to be the mining companies and the public utilities.” Is the tax constitutional?

 

ANS:

In this case, the Arizona Court of Appeals held that the method of taxation, while certainly motivated by proper concerns, singled out particular businesses for higher tax rates. While business property in general could be taxed at higher rates, the legislature could not single out particular taxpayers for payment of higher rates. The taxation scheme was declared unconstitutional as violative of the equal protection clause.

 

PTS:   1                    NAT:  AACSB: Analytic                           TOP:   U.S. Constitution

 

9. The state of Arizona has passed a law requiring state agencies to conduct their business with the public in both Spanish and English. A voters’ referendum repealed the law and several citizens’ groups brought suit challenging the referendum as a violation of their U.S. Constitutional rights. What would be the basis of their suit?

 

ANS:

Due process; equal rights – fifth and fourteenth amendments.

 

PTS:   1                    NAT:  AACSB: Analytic                           TOP:   due process

 

10. Match the following with the correct letter:

(1) Article III

(2) Fifth Amendment

(3) First Amendment

(4) Fourteenth Amendment

 

a.	Due process protection at the state level
b.	Due process protection at the federal level
c.	Freedom of speech
d.	Federal court system

 

 

ANS:

1 = d, 2 = b, 3 = c, 4 = a

 

PTS:   1                    NAT:  AACSB: Analytic                           TOP:   U.S. Constitution

 

11. Explain why a federal statute that permits federal suits against defendants who have committed crimes against women is unconstitutional while civil rights laws are considered constitutional.

 

ANS:

The underlying economic distinction is critical. The civil rights issues address economic activity such as restaurants and hotels and their impact on interstate commerce. The crimes against women are non-economic based.

 

PTS:   1                    NAT:  AACSB: Analytic                           TOP:   U.S. Constitution

 

12. Analyze and discuss why the top corporate and trade PACs are the top political contributors.

 

ANS:

The top PAC contributors are all involved in markets that are regulated by the government.  It makes sense that these groups would want to influence the elections and opinions of those who will pass legislation concerning their industries.  From the 2007-2008 data, The National Association of Realtors, International Brotherhood of Electrical Workers, AT&T, American Bankers Association, and the National Beer Wholesalers Association are the top 5 contributors in total dollar amounts.  All of these PACs represent highly regulated markets.

 

PTS:   1                    NAT:  AACSB: Analytic                           TOP:   corporate speech

 

13. Bailey’s Brake Service, a bit of an eyesore at a main intersection near the faltering downtown area of Mesa, Arizona, was a family-founded, owned and operated business that had been open in its existing location since 1970. Lenhardt’s True Value Hardware store was also a longstanding Mesa business with a location south and east of Bailey’s and a desire for a better location as well as a professed desire to revitalize Mesa’s downtown area. The Lenhardts had purchased the property abutting Bailey’s but felt that the street-facing Bailey’s property was necessary for its location, location, location.

 

The city fathers and mothers were in favor of condemnation of the Bailey use, a taking by eminent domain, followed by a “reissuing” of the once Bailey property to Lenhardt’s for its construction of a new and much less eyesoreish retail establishment on the site:

 

Randy Bailey challenged the taking of his business as unconstitutional. Discuss the issues in his case and challenge to the city’s taking by eminent domain.

 

ANS:

Students should apply the doctrine of Kelo and note the following:

1.	The U.S. Supreme Court now permits takings for purposes of economic development.
2.	Such a taking requires that there be an economic development plan in place so that property is not simply transferred from one private party to another.
3.	There must be adequate compensation.

 

In this case, Bailey won – the court refused to uphold the taking, but it was the Arizona Supreme Court and there were issues with whether there was an adequate economic development plan in place that required replacement of Bailey’s.

 

PTS:   1                    NAT:  AACSB: Analytic | AACSB: Reflective Thinking

TOP:   eminent domain