Dynamic Business Law 3rd Edition By Nancy K. Kubasek and M. Neil Browne - Test Bank

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The U.S. Constitution establishes a system of government based on the principle of federalism, according to which the authority to govern is divided between federal and state governments.

TRUE

Congress, the legislative or lawmaking branch, has the power to enact legislation, but the president can veto a law that Congress passes.

FALSE

Although the Constitution does not explicitly allow courts to review legislative and executive actions to determine whether they are constitutional, early common law established this process, which is known as judicial review.

TRUE

The landmark 1803 U.S. Supreme Court case of Marbury v. Madison established that if the law and the constitution apply to a case, the court must determine which of the rules governs, which is the essence of judicial duty.

FALSE

The primary source of authority for federal regulation of business is the commerce clause, located in Article I, Section 8, of the Constitution.

TRUE

Federal laws include laws passed by federal administrative agencies.

TRUE

As with its power to tax, Congress can use its spending power to achieve social welfare objectives.

FALSE

The first 10 amendments to the U.S. Constitution, known as the Bill of Rights, substantially affect government regulation of business.

FALSE

The First Amendment protections apply to corporations although courts do not, however, treat all corporate speech the same.

TRUE

Not all corporate speech is political speech; and some corporate speech is commercial speech meaning speech that conveys information related to the sale of goods and services.

The U.S. Constitution establishes a system of government based on the principle of federalism, according to which the authority to govern is divided between federal and state governments.

According to the Tenth Amendment to the Constitution, all powers that the Constitution neither gives exclusively to the federal government nor takes from the states are reserved for the states.

Because the federal government has only those powers granted to it by the Constitution, federal legislation that affects business must be based on an expressed constitutional grant of authority.

In addition to allocating authority between state and federal governments, the Constitution allocates the power of the federal government among the three branches of government.

The first three articles of the Constitution establish three independent branches of the federal government: the legislative, executive, and judicial branches.

Although the Constitution does not explicitly allow courts to review legislative and executive actions to determine whether they are constitutional, early common law established this process, which is known as judicial review.

The supremacy clause, located in Article VI of the Constitution, provides that the Constitution, laws, and treaties of the United States constitute the supreme law of the land, “any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.”

As long as the law affects commerce among the states, or interstate commerce, in some way, the regulation is generally constitutional.

Police power consists of the residual powers retained by each state to safeguard the health and welfare of its citizenry.

Although the supremacy clause establishes the sovereignty of federal law, courts generally presume that laws passed in accordance with states’ police power are valid.

The restriction on states’ authority to pass laws that substantially affect interstate commerce is called the dormant commerce clause.

We court held that the law violated the Commerce Clause “because the effect of its particular gallonage cap is to change the competitive balance between in-state and out-of-state wineries in a way that benefits Massachusetts’s wineries and significantly burdens out-of-state competitors.”

In Lopez the Court ruled that Congress had exceeded its commerce clause authority when it passed the Gun-Free School Zone Act.

The privileges and immunities clause prohibits states from discriminating against citizens of other states when those nonresidents engage in ordinary and essential activities including buying and selling property, seeking employment, and using the court system.

The full faith and credit clause provision requires that courts in all states uphold contracts and public acts established in other states.

Article I, Section 8, of the Constitution gives the federal government the “Power to lay and collect Taxes, Duties, Imports and Excises,” and the federal government can use taxes for purposes other than the provision of essential services.

As with its power to tax, Congress can use its spending power to achieve social welfare objectives, and as an example, in the 1987 case of South Dakota v. Dole, the Supreme Court upheld a federal statute granting federal funds for state highways to only those states in which 21 is the legal drinking age.

Although Article I, Section 8, of the Constitution gives the federal government the “Power to lay and collect Taxes, Duties, Imports and Excises,” the taxes laid by Congress must be uniform across the states.

The first 10 amendments to the U.S. Constitution, known as the Bill of Rights, substantially affect government regulation of business.

The Fourteenth Amendment extends most of the provisions in the Bill of Rights to the states, prohibiting state interference in citizens’ exercise of their rights.

Exhibit 5-2, “Summary of the Bill of Rights,” reflects the protection of the Second Amendment that in light of the need for a well-regulated militia for security, government cannot infringe on citizens’ right to bear arms.

Exhibit 5-2, “Summary of the Bill of Rights” reflects the protection of the Eighth Amendment prohibiting cruel and unusual punishment.

Corporations engage in political speech when they support political candidates or referenda.

Fighting words are a class of unprotected speech.

The First Amendment contains two provisions, establishment clause and free-exercise clause that protect citizens’ freedom of religion.

The international community is less protective of hate speech than the U.S., and the United Nations declaration and a number of foreign laws state that hate speech is not a protected form of expression.

The establishment clause maintains that government “shall make no law respecting an establishment of religion.”

The free-exercise clause states that government cannot make a law “prohibiting the free exercise” of religion.

A search warrant is a court order that authorizes law enforcement agents to search for or seize items specifically described in the warrant.

Government officials can obtain search warrants only if they can show probable cause to believe that the search will uncover specific evidence of criminal activity.

The Fourth Amendment guarantees citizens the right to be “secure in their persons, their homes, and their personal property.”

An example of when government officials do not need a search warrant is when law enforcement officials believe it is likely that the items sought will be removed before they can obtain a warrant.

Although administrative searches usually require search warrants, courts have established an exception to this rule in that if an industry has a long history of pervasive regulation, a warrantless search is not unreasonable although the pervasive-regulation exception is not always easy to interpret.

In Braswell v. United States, the U.S. Supreme Court found that “subpoenaed business records are not privileged, and as a custodian for the records, the act of producing the records is in a representative capacity, not a personal one, so the records must be produced.” The Court held that a subpoena on such records violates the privilege against self-incrimination if a business is a sole proprietorship.

The U.S. Supreme Court, in a 2001 case, ruled that police using thermal-imaging devices to detect heat patterns emanating from private homes constitutes a search that requires a warrant.

The Fifth Amendment protects against self-incrimination, meaning that in a criminal case, the defendant does not have to testify in court as a witness against herself or himself.

At a minimum, procedural due process entitles a person to notice of any legal action against them, and to a hearing before an impartial tribunal.

The Fifth Amendment protects against self-incrimination, meaning that in a criminal case, the defendant does not have to testify in court as a witness against herself or himself.

The Fifth Amendment protects against double jeopardy.

The Fifth Amendment protects against double jeopardy meaning that the government cannot try a person more than once for the same crime.

The due process clause guarantees two types of due process: procedural and substantive.

Substantive due process refers to the basic fairness of laws that may deprive an individual of her life, liberty, or property.

The Fifth Amendment’s taking clause provides that when government takes private property for public use, it must pay the owner just compensation, or fair market value, for the property.

Courts have interpreted the Ninth Amendment, together with the First, Third, Fourth, and Fifth amendments, as providing individuals with a right to privacy.

If a law prevents individuals from exercising a fundamental right, the action will be subject to strict scrutiny.

If the law’s classification scheme is based on gender or on the legitimacy of children, courts use intermediate scrutiny.

The constitution of Belarus, adopted in 1994, provides Belarusian citizens with an exhaustive set of rights that surpasses most other nations’ constitutions and guarantees, for example, that citizens accused of crimes are presumed innocent until proven guilty.

In the 1987 case South Dakota v. Dole, the Supreme Court upheld a federal statute that grants federal funds for state highways to only those states in which 21 is the legal drinking age.

The United States Supreme Court upheld the individual mandate of the Affordable Care Act (ACA) on the ground that it was a valid exercise of congressional power under the taxing clause.

The court refused to find the section constitutional rejecting the argument that Congress may regulate noneconomic, violent criminal conduct based solely on that conduct’s aggregate effect on interstate commerce.

According to the Ninth Circuit, “the prominence of the Cross in the Memorial, leads us to conclude that a reasonable observer would perceive the Memorial as projecting a message of religious endorsement, not simply secular memorialization,” and the memorial was therefore found to violate the establishment clause.

Sales taxes are a large source of revenue for state governments, but states can require that a business submit sales tax payments only if the business has a store or distribution center in the state.

The Constitution establishes the system of checks and balances. Each branch’s powers keep the other branches from dominating the government. Congress, the legislative branch, has the power to enact legislation, but the president can veto a law that Congress passes. The legislature, however, can overturn a presidential veto with a two-thirds vote of the members of Congress. Also, if Congress passes a bill and the president signs it, the judiciary can strike it down as unconstitutional.

The dormant commerce clause is a restriction on the state’s authority to pass laws that substantially affect interstate commerce. If the purpose of a state law is to regulate interstate commerce or to discriminate against interstate commerce, the law is usually unconstitutional. Likewise, if a law substantially interferes with interstate commerce, it is generally unconstitutional.

While the First Amendment protects freedom of speech, like other rights, First Amendment rights are not absolute. For that reason, a person does not have the right to yell fire as did Christen. Additionally, the First Amendment does not protect false statements about another that are injurious to that person’s reputation.

The test has four aspects as follows:

(1) Does the speech concern an illegal activity? Is it misleading?
(2) Is the government interest served by the restriction on commercial speech substantial?
(3) Does the regulation directly advance the government interest asserted?
(4) Is the regulation more extensive than necessary to serve the government interest?

As long as the speech is not illegal or misleading, in order to have a restriction on speech upheld, the government must show that the interest served by the restriction on commercial speech is substantial. The regulation at issue must also directly advance the government interest asserted, and the regulation must not be more extensive than necessary to serve the government interest involved.

If a law prevents individuals from exercising a fundamental right, or if the law’s classification scheme involves suspect classifications, the action will be subject to strict scrutiny. Suspect classifications include classifications based on race, national origin, and citizenship. Courts uphold suspect classifications only if they are necessary to promote a compelling state interest. In cases involving suspect classifications, courts do not begin their analysis with a presumption that the classification is constitutional, so few laws pass the strict-scrutiny standard.