LSB 3213 Legal and Regulatory Environment of Business Professor Jack Wroldsen Office 210 Spears Business Building jack wroldsen okstate edu 405 744 5418 Today s Goals Final admin issues note taker Overarching context of legal system US Constitution Federal and state laws Federal Laws 10th Amendment Checks and balances Why Compare to other systems Most important SCOTUS case Federal Power Need specific authorization in Constitution Subject to checks and balances Generally federal laws preempt state laws Limits on State Laws 1 Federal Preemption 2 Privileges and Immunities 3 Full Faith and Credit 4 Dormant Commerce Clause Privileges and Immunities Clause Definition Two part test Substantial reason to discriminate AND Interfere with essential activity Tuition Marriage Employment Full Faith and Credit Clause Definition Examples Collect a KS judgment in OK CO driver license in OK Dormant Commerce Clause Commerce clause federal laws for interstate commerce Dormant commerce clause state laws for intrastate commerce States cannot unduly burden interstate commerce Where to draw the line Dormant Commerce Clause Dormant commerce clause limits the effect of state laws on interstate commerce Balancing test Importance of state interest vs Burden on interstate commerce Winemaker Case Facts Three tier system producer wholesale retail Internet disintermediation In state wineries can sell online or in stores Out of state must choose one or the other Later only small wineries producing less than 30 000 gallons can sell both ways Winemaker Case Legal Issue Effect in state wineries can sell directly and through middlemen Out of state must choose Law discriminates against out of state or large wineries in order to help MA wineries grow Is MA allowed to do this Football Wine Lobbying Law Winemaker Case Applicable Law Commerce clause federal laws Dormant commerce clause state laws Balancing test State interest vs Burden on interstate commerce Can Drew send wine to Tom Winemaker Case Legal Reasoning State laws that alter conditions of competition to favor instate interests over out of state competitors in a market have long been subject to invalidation Which legal arguments Natural law Positive law Historical approach Legal realism So far Federal laws Specific authorization in Constitution For instance commerce clause Preempt state laws State laws keep business flowing Privileges and immunities clause Full faith and credit clause Dormant commerce clause Next Class Continue chapter 4