MGMT 311 Exam 1

United States Supreme Court

The ultimate decider of the US

Has 4 Main Parts


1. United States Court of Appeals for the Armed Forces


1. Military Courts
2. 12 United States Court of Appeals


1. United States Tax Court
2. 94 United States District Courts


1. Most cases go through here
2. 4 in Texas
3. Texas is part of the 5th circuit
3. 90 United States Bankruptcy Courts
3. United States Court of Appeals for the Federal Circuit


1. United States Court of International Trade
2. United States Court of Federal Claims


1. For suing federal court
3. United States Court of Appeals for Veterans Claims
4. State Supreme Courts

Texas Court

1. State Highest Appellate Courts

* Supreme Court
* Civil Jurisdiction only
* 9 Justices
* Court of Criminal Appeals
* Criminal Jurisdiction Only
* 9 Judges


2. State Intermediate Appellate Courts

* Court of Appeals
* Intermediate appellate Jurisdiction
* 14 courts
* hang all criminal and civil cases


3. State Trial Court of General and Special

* District Courts
* Trial Courts of General Civil and Criminal Jurisdiction (some courts specialize by subject matter)


3. County Trial Courts of Limited Jurisdiction

* Statutory Probate Courts
* limited to probate matters
* County Courts at Law
* limited Civil and/or criminal jurisdiction
* Constitutional County Courts
* Limited Civil and Criminal Jurisdiction (1 in each county)


4. Local Trial Courts of Limited Jurisdiction

* Municipal Courts
* limited Criminal Jurisdiction
* Justice of the Pease Courts
* Limited Civil and Criminal Jurisdiction (small claims courts)

What is the law?

* the law defines what is legally right and wrong that is meant to provide stability, predictability, and continuity so that people know how to order their affairs
* The law establishes rules that govern society by establishing:
* Sanctions (penalties imposed on crimes) and remedies (relief given to an innocent party to enforce/compensate for violation of a right for violations
* Provides confidence and predictability to individuals
* The rules consist of written laws and court decisions
* Courts interpret written laws to make rulings

Legal Liability

the state of being legally responsible for something

Four Primary Sources of American Law

1. Constitutions
2. Statutory laws
3. regulations
4. Case law/Common law Doctrine

Constitutions

US- Supreme law of the land

State Constitutions

Statutory Laws

US, state and local laws

* higher laws supersede lower laws
* Fed sets the floor and states set the ceilings

Regulations

created by administrative agencies

Case Law/ Common Law Doctrine

Principles of lows handed down from English Common law

* Federal and State case law

Secondary Sources of Law

includes books and articles that summaries ethe clarify the primary sources

Constitution

Establish organization, powers, limits of government


1. US Constitution


1. Article VI- Supreme Law of the Land
2. Creates the US Government
3. 10th amendment- reservation clause- establishes States Rights
2. State Constitutions


1. creates the state government and governor power
2. highest form of law within the state
3. still subject to US Constitution

Statutory Law

enacted by legislative bodies

* Types
* Federal Statutes- found in Federal Cost or US Code
* States Statutes- State Registry
* Local/municipal- county, city, town ordinances
* lower level stuff likes zoning laws, building restrictions, and speed limits
* Do not violate US of State constitution

Uniform Laws

a model law created by the National Conference of Commissioners on Uniform State laws and/or the American Law Institute for the states to consider adopting

* if state chooses to adopt law, it becomes statutory law in the state

Administrative Law

rules, orders, decisions, or decrees issued by administrative agency

Types of Administrative Bodies


1. Executive agencies- answer to president/governor


1. extension of the executive branch
2. US DOT and Texas Department of Transportation
2. Regulatory Agencies- answer to a board or commissioner appointed


1. president can’t exhume a lot of power over them
2. SEC and FCC

Case Law

rules of law announced in court decisions- interprets statues, regulations, constitutional provisions and other case law

Common Law

American law is based upon old English Law

general body of rules that are applied throughout the entire English's realm

Old English Law

based on ancient midevil times and two types


1. Courts of Law and Remedies at Law- righted a wrong


1. damages or remedies- land, items, or money
2. Courts of Equity- Justise and fair dealing


1. damages are unable- specific performance, injunction, recission

Today we have one court that can grant both

Equitable maximums

general propositions or principals of law that have to do with fairness

Plaintiff/ Petitioner (Equity)

Bring the action

* convincing

Defendant/respondent (Equity)

party being sued

* responding to charges

Laches

defenses raised by respondent

* SOL- Statue of Limitation (depends on crime)- guidelines that dictate time period to bring problem to court

Stare Decisis

the doctrine of precedent under which a court must follow earlier decisions when the same facts/law appear (to stand on decided cases)

* courts are duty bound to follow precedents

Legal precedent

is a court decision that is considered controlling on either the facts or legal issue

Jurisdiction

is the power to make legal decisions and judgements

Reporters

a publication in which court cases are published/reported

Controlling precedents

precedents that must be followed within a jurisdiction- type of binding authority

Binding authority

any source of law that a court must follow when deciding a case

Concept of Stare Decisis

general principle- judges must follow precedent- Two main aspects


1. Courts should not overturn its precedent absent a really good reason
2. Decision by higher courts are binding

US Supreme Court Decisions are binding

Exceptions to precedent

* ruling precent is simply wrong on the law
* social change have rendered the precedent inapplicable

Examples of Deviations from Precedent

* Roe v Wade and Dobbs v Jackson Woman
* 14th amendment
* equal protections clause
* Brown Board of Education and Plessy v Ferguson
* separate but equal

Cases of First Impression

when no binding precedent exists

Persuasive authority

legal authority that courts look to for guidance

* precedent from other jurisdictions
* legal treatises- legal dictionaries
* unrecorded decisions- decisions from lower level courts
* law review article- written by experts that help decide

Legal Reasoning IRAC

process of evaluating how various laws apply to a given situation that the process by which a judge harmonizes her/his opinion with the judicial decisions in pervious cases

* Issue- What is the case or controversy about?
* Rule- What rule of law will apply?- what legal standard will apply
* Application- applying the rule of law to facts and circumstances giving rise to the controversy- lawyers and judges look to apply or distinguish previously decided
* Conclusion- decision

Legal Reasoning Things to consider

Decisions are not black and white

* open to interpretation
* solid arguments can be made by both sides
* higher the court the higher the controversy

Laws/statutes can be flexibly interpreted

* courts look at intent behind the law
* written/passed without congress fully understanding to courts must interpret

Personal beliefs/ moral philosophies can play a role

* judges are human with morals and political agendas

Jurisprudence

the science/ philosophy of law

Natural law theory

based on belief that the legal system should reflect universal moral and ethical principals that are inherent in human nature

Legal positivism

no higher laws than the ones created by national government and natural rights are given

Historical school

emphasizes the evolutionary process of law by focusing on origin/history

Regal realism

law is just one of many institutions in society

Sociological school

views laws as a tool or promoting justice in society

Classifications of law

* Substantive and procedural
* federal and state
* public and private laws
* civil and criminal laws
* cyberlaw

Substantive and procedural

* substantive- defines and creates legal right and obligations- what does they law say or do
* procedural- methods of enforcing the rights established- think about the process

Federal and State

federal is on the top and states go into more details

Public and private laws

* public addresses the relationship between person and government
* private address relationship between private entities

Civil and criminal laws

* criminal comes with punishment- concerned with the wrongs committed against the public as a whole
* civil- usually regulates problem- spells out rights/duties that exist between persons agreements
* burden of proof

Cyberlaw

new bodies of law that govern transactions over the internet

* laws change slow but internet changes fast

How to read Case Law

* Trial court cases- Titles
* plaintiff/petitioner- party bringing the suit is listed first
* defendant/respondent- party defending the suit listed second
* Appellate courts- names my flip
* the appellant is listed first(taking the appeal)- losing party becomes appellant
* the appellee is listed second
* Higher or highest court names by flip again

Decisions and Opinions

written opinions/decisions outline or explains the courts rationale for deciding the case in law and facts

Types of decisions

* unanimous deicison
* majority opinion
* concurring opinion
* dissenting opinion
* plurality opinion

Unanimous deicison

all justices agree on the law and facts- very infrequently- 9-0

Majority opinion

outlines the rational of the judges that decided the case- 5-3 or 6-3

Concurring opinion

outlines the rational of the judges agreeing on the ultimate outcome but not the majority’s legal reasoning

* agree on outcome but split on rational/ interpretation of law varies

Dissenting opinion

outlines the rational on why the justices disagree with the majority’s opinion

* help in rational for future courts but won’t change the vote

Plurality opinion

unable to get a majority

Federal Form of Government

system of government in which the states form a union and the sovereign power is divided between a central government and the states

Shared Governance

The US is a republic with a federal government

* the federal and state government share sovereign power
* 10th amendment- gives state power unless expressly granted to the Fed
* Commonly referred to as police powers- states have power to regulate health and safety of people

Sovereignty

having independent authority over a geographic area

Police Powers

not limited to criminal laws

* rights of states to regulate private activity for the good of society- health and safety and security
* delegated to local municipalities
* states have broad powers to regulate

Privileges and Immunities Clause

Article 4 section 2

* Citizens in each state are entitle to enjoy the privileges and immunities of all the states
* States can’t discriminate for property, employment, and the court system

EXCEPTIONS:

* the foreign state must have a substantial reason for treating non residents different
* College Tuition- rational being in state resident pay taxes
* Fees for hunting and fishing licenses- taxes being paid
* Homestead exemption- taxes
* Ward v Maryland- imposing an extra sales tax on nonresidents good- Maryland was stopped because this was discriminating and stopping in state commerce

Full Faith and Credit Clause

Article 4 section 1

* every state will respect every other state’s public acts, records, and judicial proceedings
* without this clause we would function less like the US and more like the EU
* allows people to move states and conduct business throughout states
* includes deeds, wills, contracts, and marriage licenses
* Importance of this clause:
* allows people and business to effectively and uniformly conduct business across state lines
* Protects people- protects orders and child custody issues- makes restraining orders valid within all states
* Allows 50 states to act as 1

Separation of Powers

3 branches of government

* executive
* legislature
* judicial

Checks and balances system

* Legislature enacts laws, but require executive approval (veto power)
* judicial reviews the actions of both executive and legislature but legislature determines courts jurisdiction and executive appoints justices
* executive handles foreign affairs but treaties and declarations of war require legislature approval
* no absolute power

Commerce Clause

enacted to prevent the states from enacting laws that would interfere or restrict trade and commerce among the states

* Article 1 section 8
* congress has the authority to regulate commerce with foreign nations and among the states- impacts businesses
* Commerce Clause today
* feds have jurisdiction over every commercial enterprise
* Dormant Commerce Clause
* state regulations of interstate commerce- state regulation is limited
* it is a balancing test-purpose v burden on interstate commerce

Supremacy clause

Federal law is the “Supreme law of the Land”

* article 6
* Federal law v state law- preemption occurs
* State/local law- may exceed federal law
* environmental law
* employment laws

Tax and spending

Congress has the explicit power to lay and collect taxes, duties, etc

* article 1 section 8
* taxes must be uniform- cannot negatively impact one group of people
* If reasonable- permissible under commerce clause

Congress also has the power to pay debt and provide for the common defense and general welfare of the US

* article 1 section 8
* congress can place stipulations on its payments to states
* policies choices- taxpayer and politicians must live with
* mandatory vaccinations- threatened to cut funding if state didn’t make vaccinations mandatory

Bill of Rights

adopted to protect individuals against government

* 1st 10 amendments

Corporations are considered legal entities or legal person

* as such corporations are protect by the Bill of Rights and enjoy the same protections

14th Amendment

No state shall deprive any person of life, liberty, or property without due process of law

* originally applied only to the Federal Government
* Starting in the 1900’s court started applying the same to state governments

Today the 14th amendment applies equally to all forms/sources of government

Freedom of Speech

Essential to democratic form of government

* courts have held this sacred- essence of being American
* Applies not only to spoken words but gestures, movements, and clothing

Courts have applied reasonable restrictions on Free Speech

* courts must balance individuals and society’s rights
* Cannot yell Fire in a crowded theater

Laws that regulate contents of speech must show a compelling government interest

* for the law to be constitutional there must be a compelling governmental interest that can only be furthered by the statute
* courts have held that schools can limit free speech
* Bong hits for Jesus- promoting drug use

Corporate Free speech

corporations are free to make political contributions just like individual

* not absolute- still subject to reasonable restrictions

Commercial free speech

refers to advertisement and marketing

* government may limit misleading or false advertisement (fraud)
* Government must show
* there exist a substantial government interest
* the law must directly advance that interest
* the law must go no further than necessary to achieve the interest
* Bad frog brewery case/beer advertisement in schools

Unprotected speech

Fighting words- words likely to lead to violence

* very fine line- content specific

Defamatory speech- harms an individual reputation

* tort- several factors need to be considered

Threatening speech

* there must be a true threat with intent to commit violence

Obscene speech

* courts have struggled with this

Freedom of Religion

Government may not establish any religion nor prohibit the free exercise thereof

* no official religion/state sponsored religion- better known Establishment Clause- no favoritism
* individuals may practice any religion of their choosing- Free Exercise clause

Under the Establishment clause for a law/policy to be constitutional, it must not have the primary effect of promoting or inhibiting religion

* requires separation of Church and state just not complete separation
* often involves issues such as
* prayer in school, state vouchers for religious schools, nativity scenes on public grounds

Free exercise clause guarantees individuals can hold whatever religious beliefs they want

* to limit free exercise the government must
* compelling state interest for restricting free exercise
* the restriction is the only way to achieve that interest
* restrictions must not be substantial
* cannot modify or violate one’s belief
* Public policy exceptions
* public safety is an issue- little bit more jurisdiction
* life saving measures or vaccinations regardless of religious beliefs

4th amendment

Protects the rights of the people to be secure in their persons, houses, papers, and effects

* better known as search and seizure- need probable cause and a search warrant from a judge

5th amendment

No person shall be compelled in any criminal to be a witness against himself

* cannot be forced to give testimony that might subject to criminal proceeding- the right to remain silent
* applies to Federal and state cases
* only applies to a natural person- not corporations or partnerships
* but sole proprietors with no legal business entity may invoke the 5th
* 5th amendment may be waiver
* individuals have the right to remain silent but may not the ability

Due Process

the 5th and 14th amendment provides for two types of due process prior to a taking of life, liberty, or property

* Procedural (equitable or fair)- requires prior notice and opportunity to be heard
* right to call witnesses, present evidence, right to appeal a decisions, and right to be presented with exculpatory evidence
* Substantive focuses on the content of the law rather than fairness
* standard of review for violations of fundamental rights
* government must have a legitimate and compelling reason
* standard of review not involving fundamental right
* rationally relates to any legitimate governmental interest
* examples of fundamental rights- travel, marriage, family, privacy

Equal Protection

14th amendment forbids states from denying any person equal protection under the law

* equal protection (like substantive due process)- relates to substance of the law or action

The courts use three standards:

* Strict Scrutiny
* Intermediate Scrutiny
* Rational Basis test

Strict Scrutiny

is applied when the law prohibits or inhibits some people from exercising fundamental rights

* there must be a compelling governmental interest
* example- providing minority business preferential treatment for government contracts

Intermediate Scrutiny

applied in cases in based upon gender

* the law must be substantially related to government objective
* example- limiting beer sales to men under 21 but not women

Rational basis test

applied to cases involving social welfare or economics

* is there a rational basis related to legitimate government interest
* example- limiting certain business from selling alcohol

Privacy rights

No expressed constitutional right to privacy

* Griswold v Connecticut- held that the right of privacy was implied in the 1,3,4,5, and 9th amendments
* several Federal statutes and state constitutions recognize the right of privacy

Congress has enacted several statutes that protect individuals’ personal information from government and private business

* HIPPA- health information
* FERPA- educational information

Congress and states have also passed laws providing individuals access to information

* freedom of information act

The US Patriot act- post 9/11

* US law more power to stop terrorist attacks
* there have been several constitutional challenges, but no court has limited its power or authority

Ethics

the study of what is right and wrong

* personal beliefs that people follow
* moral principles that govern behavior or conduct

Business ethics

constitutes what is right or wrong in the business world

* application of moral and ethical principals in the decision making process

Relationship between law & ethics

law does not equal ethics

* cannot possibly regulate all ethical situations
* legislatures have enacted laws to help regulate ethics in response
* fraud and misleading representations- what companies can or cannot say or do- bribery of public official- what can someone accept as a gift
* Moral minimum
* Private Code of Ethics
* Industry ethical code

Moral Minimum

mere compliance with the law- lowest acceptable ethical standard- bare minimum to comply with the law

* failure to comply- significant consequences

Private Code of Ethics

businesses internal code of ethics (not laws but corporate principals)- use a top down approach

* Aggie Core Values- live and breathe then, and if you don’t meet then you are punished

Industry Ethical Code

Whereby the industry helps to regulate itself

* provide guidance on ethical questions
* violations may lead to sanctions
* Ex. Bar Associations- heavily regulated
* government may pass ethical regulations for certain professions

Role of Business in Society

Business as Profit maximizer- old school

Business as a Corporate Citizen- new school

Four Part Analysis to making making business decision

Business as a Profit Maximizer

Even the most profit dominated company must be ethical

* customers satisfaction
* making money makes everyone happy but could lead to cutting corners
* legal ramifications for unethical behavior
* Wells Fargo- Mortgage Collapse and Account scandal
* Selling high risk housing loans that many people faltered on
* also set up ghost accounts and charged people unknown interest
* VW emission scandal- make new clean diesel but they are lying about it

Business as a Corporate Citizen

Impact on people and the planet

Triple bottom line- money, people, and environment

* Starbucks- ethically sourced coffee, helps farmers, green initiatives products/ building, community services and college program for employees

Four part analysis to making a business decision

1. The legal implication- if you get caught what is the risk
2. The public relations impact- will it hurt our image
3. The safety risks for consumer and employees- is it threating lives of our people
4. Financial Implication- if it goes wrong how much will it cost

Importance of Ethical Leadership

Attitude of top management- it all starts at the top

* rank and file need to see top managements commitment
* Kenneth Lay- Enron bankrupt, several executive went to prison- tried to maximize profits by lying on books and were caught
* Accountability
* set example and hold people to it

Unrealistic Goals for employees

* force people to be unethical, cut corners, cheat

Fostering of unethical conduct

* Managers rewarding employees for unethical behaviors
* Financial Incentives can lead to unethical behavior
* can serious negative consequences

Sources of Ethical Issues in Business Decision

Short term v long term

* Ethical violations more likely when companies think in the short term
* fail to see long term ramifications of its decisions
* compensations can play a key roll

Social Media

* Not protected by 1st amendment
* do not discuss work issue on social media

Right to work States- no requirement to join unions v Unionized Environment- more protections

Factors that cause unethical Decisions

* Awareness
* Rationalization
* Uncertainty

Awareness

Unforeseen or foreseeable consequences- design defect

* what does a company do?- do a cost/benefit analysis based on profit
* investigate or head in the sand
* Ford- Pinto
* Pay now or pay later
* Takata- Air bag grenades case

Rationalization

Excusing or justifying unethical behavior or decision

* not cheating not trying, everyone does it

Avoid rationalization

* what is the cost of doing the unethical thing

Uncertainty

Not sure there is an ethical issue

Uncertainty alone is generally an indicator of an ethical issue

* think, analyze, and discuss

How would I defend this action to my boss, client, public, family member?

Making Ethical Business Decisions

Legal over Ethical

* Decisions tend to be more outcome based
* not necessary value driven
* Generally, more client shareholder driven then CSR
* corporate social responsibility

Business Process Pragmatism (BPP)

* a systematic approach designed to do right thing
* These approaches are designed weed out less attractive alternatives
* Usually designed to be done in a group setting

IDDR ( I Desire to do Right)

1. Inquiry- understand the problem


1. trust your gut- if it doesn’t feel right there is probably issue
2. identify the stakeholders- who need to be involved
3. frame the issue properly
2. Discussion- identify solutions and alternatives


1. discuss impacts of each alternative- positive and negative
2. Discuss ethical and legal ramifications of each alternative


1. focus on what should you do- not what can or will you do
3. Decision- plan of action what are you going to do


1. articulate/document the reason/rationale for the plan of action
4. Review- analyze the results


1. Did the plan achieve the desired results


1. solve the ethical issue
2. stakeholders satisfied with the outcome
3. what could we have done better- lessons learned, any takeaways

Business ethics on a Global Stage

Countries and regions of the world have different ethical or mora expectations

Religions and Cultural norms

* alcohol consumption and treatment of women- dress and behavior
* companies need to make tough ethical decisions

Outsourcing- hiring outside firm or contractors to perform work rather than hiring employees

* ethical issue- outsourcing labor to other countries saves money
* PR issues not per se unethical but can be
* outsourcing domestically generally not an issue

Avoiding Corruption

* Foreign corrupt practices act illegals to bribe foreign officials
* Exception- legal in that country, small amount to grease the wheels, payments to foreign companies/3rd parties
* Ethical issues- easy to justify everyone is doing it, need to establish

Business Ethics on a Global Stage

Monitor Foreign Suppliers- many US Companies hire foreign supplies to produce goods (shoes and clothing)

* lower wages
* less governmental regulations

This can create a host of ethical issues (sweatshops)

* damage companies reputations
* lead to boycotts

Example: Mike and Adidas

* both companies have been accused of child labor laws, running sweatshop, refusing to pay supplies when unrealistic deadlines were missed

Corporate Watch Groups- look to expose US companies when they commit unethical business practices abroad

* ethical or socially responsible firms
* refuse to do business with certain suppliers
* closely monitor suppliers business practices
* H&M is committed to supply chain transparency
* publish a list of supplier and update it quarterly
* corporate goal by 2030 to use 100% recycled or sustainable sourced material

Judicial review

process by which courts decide on the constitutionality of legislative enactments and actions of executives branch

Judiciary’s Role

System of American Government would be meaningless without of the Judicial System

Origins- Marbury v Madison (1803)

* Adams attempted to pass a law right before he left office to give the president more power over the justice system
* court found that the act was unconstitutional and that congress did not have the power to modify the constitution through legislation