LSB 3213 1st Edition Lecture 3 Recap of Lecture 2 Schools of Legal Thought Natural law Positive Law Historical Approach Legal Realism Ford Tesla example Hierarchy of Laws Federal and State Systems Hierarchy of Courts Court Awards Common Law vs Civil Law Systems Legal Arguments Lecture 3 Federal Laws 10th Amendment Anything not specifically reserved to the Federal Government is given to the states Answers the question When laws conflict who takes priority Federal Law must have specific authorization in the Constitution Opposite for the states Checks and balances 3 branches of government Executive Judicial and Legislative All have checks over each other so that no branch has full power Why Keeps the government from becoming a dictatorship Gives an opportunity for all to have a voice 3 branches based on the premise that people use power selfishly for themselves so checks and balances keep that from occurring Federal Power Specific authorization in Constitution Checks and balances Preemption of state laws Limits on State Laws 1 Federal preemption These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute 2 Privileges and Immunities 3 Full Faith and Credit 4 Dormant Commerce Clause 2 Privileges and Immunities Clause Definition People in one state should have the same rights and privileges of their home when they are in another state Two part test 1 Substantial reason to discriminate AND 2 Interfere with essential activity Tuition Marriage Employment Example 1 Is making out of state students pay a higher tuition legal 1 Substantial Reasons state taxes some of which go to the university out of state students could be taking away spots opportunities from in state students 2 Essential Activity This would only interfere if the quality of degree is different in state vs out of state nothing legally states that college is a fundamental right or essential activity VALID MEETS BOTH TESTS Example 2 Is it legal to charge more for a marriage license because both members of the couple are not from the state 1 Substantial Reasons No valid reason could make the state taxes argument however over the long run the person from out of state moving in state will pay state taxes 2 Essential Activity The right to marry is definitely a fundamental right INVALID DOES NOT MEET EITHER TEST Example 3 The Oklahoma legislature decides that a 5 000 fee must be paid by companies that hire out of state employees however companies who hire in state employees will receive a tax credit in an effort to decrease the unemployment rate in Oklahoma and motivate companies to hire Oklahoma residents 1 Substantial Reasons There is a valid reason to want to decrease Oklahoma s unemployment rate and hire Oklahoma residents 2 Essential Activity Making a living and providing for yourself and family is an essential activity This law would be interfered with as employers would be less likely to hire out of state residents INVALID DOES NOT MEET THE SECOND TEST 3 Full Faith and Credit Clause Definition Each state must give validity to decisions made by other states Example collect a KS judgment in OK If you sued someone in Kansas and win and then find out that the person you sued is from Oklahoma and has all of their assets in Oklahoma If you bring your judgment paperwork to the Oklahoma court what must they do Cannot refuse to enforce the judgment so the judgment must be enforced in Oklahoma 4 Dormant Commerce Clause Commerce clause federal laws regulate govern interstate commerce Dormant commerce clause state laws cannot unduly burden interstate commerce States cannot regulate activities that cross state lines Balancing test Importance of state interest vs Burden on interstate commerce Example Wine Maker Case Three tier system vs Internet disintermediation in Massachusetts 1 type of liquor license for wine producers another type of license for distributors and a third type of license for retailers Growers decide to use the internet to sell direct to the customer this is not allowed under the 3 tier system as growers do not have a retailers license Law 1 favors in state wineries A grower in MA can sell in store or direct through the internet however a wine grower outside of MA has to choose one or the other direct online or in store Law 2 favors small wineries If the winery is small produces less than 10 000 bottles per year then they can sell direct on line or in store if the winery is large produces more than 10 000 bottles a year than they must choose one or the other sell online or in store All wineries in Massachusetts are considered small wineries Effect one group can sell directly and through middlemen Other group must choose Legal Issue Law 1 discriminatory on its face Law 2 discriminatory by design Does the discrimination violate the dormant commerce clause Applicable Law Commerce clause federal laws Dormant commerce clause state laws Balancing test State interest vs Burden on commerce State interest arguments It would make a difference for in state wineries to expand or become a large winery which could grow themselves out of the law the state should have an interest in growing state wineries the state would bring in more tax revenue if they didn t discriminate against out of state wineries Burden on interstate commerce arguments It directly burdens out of state companies because they have to choose Massachusetts residents also have fewer opportunities to buy out of state wine Legal Reasoning State laws that alter conditions of competition to favor in state interests over out of state competitors in a market have long been subject to invalidation This law argues for a free market The legal decision says that MA can do whatever it wants but cannot discriminate between in and out of state MA did not make this law until January 2015 ignored up until this point Which legal arguments Natural law Should be equal for both in and out of state Positive law They are just enforcing laws that have always been on the books Historical approach Long been subject to invalidation Legal realism Economic argument free competition So Far Federal laws specific authorization e g commerce clause Preempt state laws State laws keep business flowing Privileges and immunities Full faith and credit Dormant commerce clause