Chapter 3 Business and the Constitution An Overview of the U S Constitution Article I defines the power of Congress and that it s composed of the Senate and a Article II gives the president the executive power as well as other powers of the House of Representatives president Article III gives the judicial power to the U S Supreme Court o These three articles set up a system of checks and balances The Constitution recognizes federalism in the way it structures power relations between the federal government and the states Article IV states that the Constitution is supreme over any state law Article V sets the procedures for amending the Constitution o the first 10 amendments are the Bill f Rights The Evolution of the Constitution and the Role of the Supreme Court Courts under the power of judicial review can declare the actions of other government bodies unconstitutional Judges run into many problems because they are appointed and the decisions they make result in the people calling the system bias and undemocratic The Coverage and Structure of This Chapter A great function of the U S Constitution is that it limits the power of the government o o it lists the powers Congress can exercise or the enumerated powers it limits both the federal and state power by placing independent checks there are certain protected spheres that the federal nor the state government may pass A federal law must be based on enumerated power of Congress and not collide with independent checks in order to be considered constitutional State and Federal Power to Regulate State Regulatory Power The Constitution lists the powers the Congress can exercise An important state legislative power is the police power a broad state power to In many areas Congress and state legislatures have concurrent powers regulate for the public health safety morals and welfare Federal Regulatory Power The Constitution gives Congress the power to regulate commerce among the states lay and collect taxes and the spend for the general welfare of the nation The Commerce Power o Gives Congress the power to regulate commerce among the states Regulate the channels of interstate commerce Regulate and protect the instrumentalities of interstate commerce as well as person or things in that interstate commerce Regulate activities that substantially affect interstate commerce Gonzales v Raich U S Supreme Court 2005 A California made statute listed medical marijuana as legal and California residents Angel Raich and Diane Monson were prescribed marijuana by their doctor for a cure They grew their own and when the DEA seized and destroyed all of her plants they sued the Attorney General of the U S and the head of the DEA They argued that the DEA was violating the Commerce Clause DECISION The Supreme Court ruled in favor of Gonzales the Attorney General stating that because the Federal Government did not recognize the use of weed for medicinal purposes within the CSA the government was to put bans on the possession of medicinal marijuana The Taxing Power excises o Congress shall have the power to lay and collect taxes duties imposts and o The main purpose of taxing power is to provide a means of raising revenue for the federal government o Also Congress can impose a heavy tax on an activity to regulate it The Spending Power o Congress can use the spending power to advance specific regulatory ends The purpose of spending should serve a general purpose The Necessary and Proper Clause o Congress should have the power to make all laws which shall be necessary and proper for carrying into execution the foregoing powers Independent Checks on the Federal Government and the States If a regulation is within Congress s enumerated powers but still collided with one of the Constitution s independent checks then it is unconstitutional There are three checks that limit federal and state regulation of the economy o o o Incorporation freedom of speech due process equal protection An example of incorporation is the free speech guarantee that restricts state governments as well as the federal government Most of the Constitution block the actions of government bodies federal local Government or state action requires courts to distinguish between governmental behavior and private behavior Government Action and state Means Ends Tests Means ends tests determine how courts strike the balance between individual rights and the social needs that may justify their suppression an example is the test for determining whether laws that discriminate on the basis of sex violate equal protection There are three general kinds of means ends tests o The rational basis test a typical formulation is to say that government action need only have a reasonable relation to the achievement of a legitimate government purpose to be constitutional Intermediate security o o o Full strict scrutiny The court might say that the challenged law must be necessary to the fulfillment of a compelling government purpose Business and the First Amendment The marketplace of ideas operates most effectively according to a rationale when restrictions on speech are kept to a minimum and all viewpoints can be considered Political and Other Noncommercial Speech o Political speech speech the deals with government issues or policies is often described as the core of the First Amendment o The First Amendment protects noncommercial speech such as speech of a literary or artistic nature speech dealing with scientific ethical educational or economic issues If a corporation engages in political or noncommercial expression they have full First Amendment protection just as an individual would Commercial Speech o Commercial speech is speech that proposes a commercial transaction Commercial speech receives no protection from the First Amendment if it misleads or seeks to promote an illegal activity government action is constitutional noncommercial speech receives full protection government action is constitutional only if action is necessary to fulfillment of compelling government purpose Commercial speech that is non misleading and about lawful activity has intermediate protection Government action is constitutional if government has substantial underlying interest action directly advances that interest and action is no more extensive than necessary to fulfillment of that interest 44 Liquormart Inc v Rhode Island U S Supreme Court 1996 Two Rhode Island Statutes prohibited advertising the retail price of alcoholic beverages