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UNCW BLA 361 - Sup Ct Cases re Economic Activity

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State Oil Co. v. KhanCitation: 522 U.S. 3 (1997)Facts of the CaseBarkat U. Khan and his corporation contracted with State Oil to lease and run a gas station. Under the agreement, State Oil set a maximum profit margin for gasoline and required Khan to return any excess profits to State Oil. Khan fell behind in lease payments and was evicted. Khan then sued State Oil claiming that State Oil had engaged in price fixing in violation of Section 1 of the Sherman Act, which disallows restrictions on trade. State Oil claimed that in setting profit margins, they had not prevented Kahn from setting prices and therefore were not guilty of price fixing. On appeal, the U.S. Court of Appeals for the Seventh Circuit found in favorof Kahn based on the logic of Albrecht v. Herald Co. in which the Supreme Court ruled that some restrictions on trade, such as price-fixing, always have such negative effects coupled with such little competitive benefit that these restrictions are always unlawful. QuestionIs the setting of maximum prices always ("per se") a violation of the Sherman Act's prohibition on price fixing?ConclusionNo. In a unanimous decision authored by Justice Sandra Day O'Connor, the Court overturned the Albrecht decision. The Court noted that antitrust cases are typically decided by weighing the costs and benefits of restrictions in each individual case instead of by per se rules as in Albrecht. Also, there was significant precedent contradicting the assertion that all trade restrictions are illegal, and there was evidence that the effects of price-fixing are not as detrimental as the Court thought at the time of Albrecht.FDA v. Brown & Williamson Tobacco Corp.Citation: 529 U.S. 120 (2000)Facts of the Casehe Food, Drug, and Cosmetic Act (FDCA) grants the Food and Drug Administration (FDA) the authority to regulate, among other items, "drugs" and "devices." In 1996, the FDA asserted jurisdiction to regulate tobacco products, concluding that, under the FDCA, nicotine is a "drug" and cigarettes and smokeless tobacco are "devices" that deliver nicotine to the body. Accordingly, the FDA promulgated regulations governing tobacco products' promotion, labeling,and accessibility to children and adolescents. Brown & Williamson Tobacco Corporation, and a group of tobacco manufacturers, retailers, and advertisers, filed suit challenging the FDA's regulations. Brown moved for summary judgement on the ground that the FDA lacked the jurisdiction to regulate tobacco products as customarily marketed, or without manufacturer claims of therapeutic benefit. The District Court ruled that the FDA had jurisdiction over tobaccoas a device, but that the agency had overstepped its authority in attempting to restrict tobacco advertising. In reversing, the Court of Appeals held that Congress had not granted the FDA jurisdiction to regulate tobacco products. The court found that the FDA's definition of tobacco as a device was flawed because the agency could not prove that the impact of tobacco products on the body was "intended" under the act.QuestionDoes the Food and Drug Administration have the authority to regulate tobacco products as "drugs" and "devices" under the Food, Drug, and Cosmetic Act?ConclusionNo. In a 5-4 opinion delivered by Justice Sandra Day O'Connor, the Court held that "Congress has not given the FDA the authority to regulate tobacco products as customarily marketed." The ruling was based on the FDCA as a whole and in conjunction with Congress' subsequent tobacco-specific legislation. "By no means do we question the seriousness of the problem that the FDA has sought to address," Justice O'Connor wrote for the majority. Nonetheless, Justice O' Connor wrote, "Congress, for better or for worse, has created a distinct regulatory scheme for tobacco products, squarely rejected proposals to give the FDA jurisdiction over tobacco, and repeatedly acted to preclude any agency from exercising significant policymaking authorityin the area."Campbell v. Acuff-Rose MusicCitation: 510 U.S. 569 (1994)Facts of the CaseAcuff-Rose Music, Inc. sued 2 Live Crew and their record company, claiming that 2 Live Crew'ssong "Pretty Woman" infringed Acuff-Rose's copyright in Roy Orbison's "Oh, Pretty Woman." The District Court granted summary judgment for 2 Live Crew, holding that its song was a parody that made fair use of the original song. In reversing, the Court of Appeals held that the commercial nature of the parody rendered it presumptively unfair.QuestionMay 2 Live Crew's commercial parody of Roy Orbison's "Oh, Pretty Woman" be a fair use within the meaning of the Copyright Act of 1976?ConclusionYes. In a unanimous opinion delivered by Justice David H. Souter, the Court held that a parody's commercial character is only one element to be weighed in a fair use enquiry and that insufficient consideration was given to the nature of parody in weighing the degree of copying. The Court found that the Court of Appeals erred in applying the presumption that the commercial nature of the parody rendered it presumptively unfair, as no such evidentiary presumption was available to address either the character and purpose of the use or the market harm. Justice Souter wrote that the appellate court "erred in holding that 2 Live Crew had necessarily copied excessively from the Orbison original, considering the parodic purpose of the use." Justice Anthony M. Kennedy filed a concurring opinion.Eldred v. AshcroftCitation: 537 U.S. 186 (2003)Facts of the CaseUnder the Copyright and Patent Clause of the Constitution, Article 1, section 8, "Congress shallhave Power...to promote the Progress of Science...by securing [to Authors] for limited Times...the exclusive Right to their...Writings." In the 1998 Copyright Term Extension Act (CTEA), Congress enlarged the duration of copyrights by 20 years, making copyrights now run from creation until 70 years after the author's death. Petitioners, whose products or services build on copyrighted works that have entered the public domain, argued that the CTEA violates both the Copyright Clause's "limited Times" prescription and the First Amendment's free speech guarantee. They claimed Congress cannot extend the copyright term for published works with existing copyrights. The District Court and the District of Columbia Circuit disagreed.QuestionDoes the 1998 Copyright Term Extension Act's extension of existing copyrights exceed Congress's power under the Copyright Clause? Does the CTEA's extension of


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UNCW BLA 361 - Sup Ct Cases re Economic Activity

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