Chapter 3 Business and the Constitution Separation of powers gives distinct powers to Congress the president and the federal courts Article I level creates bicameral Congress gives it power to legislate at the federal o Sets its legislative powers determining when Congress can make laws commerce tax and spending powers gives the president executive power power to execute and enforce Article II the laws Congress passes o Lists other presidential powers command national army and to make treaties Article III courts Gives judicial power to the Supreme Court and other federal o Determines the types of cases the federal courts can decide Checks and balances system of measures that the constitution enacts so that each branch can ensure that no one branch can become too powerful Federalism The powers that the constitution doesn t give to the federal government are given to the states or the people Federal supremacy The constitution laws and treaties of the U S are supreme over state laws Judicial Review courts have the power to declare the actions of other government bodies unconstitutional Constitution limits government regulatory power in ways o 1 Restricts federal legislative authority by listing powers that Congress can exercise enumerated powers o 2 Limits state and federal power by placing certain independent checks in the path of each provides certain protected spheres where neither the federal nor sate governments can go Federal law must meet two conditions to be constitutional o 1 It must be based on an enumerated power of Congress o 2 It must not collide with nay of the independent checks State Regulatory Power o Constitution doesn t list the powers state legislatures can exercise does place certain independent checks in the path of state lawmaking o Also declares that certain powers can only be exercised by Congress taxing imports creating currency o Many areas states and Congress have concurrent powers both can make laws unless Congress makes a law under the supremacy clause Federal Regulatory Power o Congress power to coin and borrow money regulate commerce with foreign nations establish uniform laws regarding bankruptcy create post offices and enact copyright and patent laws o Article I Section most important powers regulate commerce among states lay and collect taxes and spend for the general welfare Commerce Power power to regulate commerce that occurs among the states has expanded to Congress regulating many activities within a state s boarders Gonzales v Raich Taxing Power power to lay and collect taxes duties imposts and excises main purpose of the power is to provide a means of raising revenue for the federal government also the power to destroy Congress can regulate a disfavored activity by taxing it heavily Spending Power power to spend for general welfare uses the power to reach specific regulatory ends bases the receipt of federal money on the performance of certain conditions Limits 1 Spending must serve general public purposes rather than particular interests 2 Congress must set clear conditions for conditioned money 3 Condition must be reasonably related to the purpose underlying the expenditure Independent Checks on the Federal Government and the States o Incorporation All Bill of Rights provisions apply to the states and the 14th Amendment s equal protection guarantee s now applied to federal government action through incorporation of it within the Due Process Clause o Government Action forces courts to distinguish between governmental behavior and private behavior Constitution s individual rights provisions block actions only of governmental bodies private actions are not constitutional issues o Means End Test Determine how courts strike the balance between individual rights and the social needs that may justify their suppression The ends specifies how significant a social purpose must be in order to justify the restriction of a right The means states of effectively the challenged law must promote that purpose in order to be constitutional Rational Basis Test government action only has to have a reasonable relation to the achievement of a legitimate government purpose to be constitutional Intermediate Scrutiny Full Strict Scrutiny Challenged law must be necessary to the fulfillment of a compelling government purpose o Business and the First Amendment Political speech is at the core of the 1st Amendment Some cooperate speech is classified as commercial speech Commercial speech speech that proposes a commercial transaction o Due Process Federal government must observe due process when depriving a person of life liberty or property has procedural and substantive meanings Procedural Due Process establishes the procedures that government must follow when it takes life liberty or property core is adequate notice of the action and some sort of fair trial or hearing Substantive Due Process sometimes due process clauses are used to attack the substance of government action o Equal Protection 14th Amendment states nor the federal government cant deny any person equal protection Basic Test rational basis test applied to social and economic regulations that are challenged as denying equal protection Stricter Scrutiny laws that discriminate regarding to fundamental rights or suspect classes must be more rigorously reviewed Suspect Classes 1 Race and national origin classifications involving racial or national minorities 2 Alienage classifications based on one s status as an alien 3 Sex 4 Illegitimacy classifications based on one s illegitimate birth Independent Checks Applying Only to the States o Contract Clause Deals with state laws that change the parties performance obligations under the an existing contract after that contract has been made protects the obligations of governmental contracts charters and grants o Burden on or Discrimination against Interstate Commerce o Federal Preemption