Constitutional Law for Business and E-Commerce

U.S. Constitution and Federalism

• Federalism: U.S. government structure where federal and state governments share powers.
• Delegated powers: Powers given to the federal government by states.
• Enumerated powers: Specific powers delegated to the federal government.
• Reserved powers: Powers not delegated to the federal government are reserved for state governments.

Separation of Powers

• Doctrine of Separation of Powers: Divides government into three branches.
  • Article I: Legislative branch (Congress - Senate and House of Representatives) makes federal laws.
  • Article II: Executive branch (President and Vice President) enforces federal laws.
  • Article III: Judicial branch (Supreme Court and federal courts) interprets laws.
• Checks and balances: System to prevent any one branch from becoming too powerful.

Supremacy Clause

• U.S. Constitution, federal treaties, laws, and regulations are supreme law of the land.
• State and local laws conflicting with federal law are unconstitutional.
• Preemption doctrine: Federal law takes precedence over state or local law.
  • Congress can expressly regulate an area exclusively.
  • Concurrent powers may be given to local governments.

Case 4.1: Supremacy Clause

• Mutual Pharmaceutical Company, Inc. v. Bartlett, 133 S.Ct. 2466 (2013).
• Issue: Does federal drug labeling law preempt a stricter state drug labeling law?

Commerce Clause

• Congress has power to regulate commerce with foreign nations, among states, and with Indian tribes.
• Three types of commerce regulated by the federal government:
  • Commerce with Native American tribes
  • Foreign commerce
  • Interstate commerce

Commerce with Native American Tribes

• Federal government regulated commerce with Native American tribes during U.S. formative years.
• Treaties were entered into with many Native American nations.
• Native Americans are treated as domestic dependent nations with limited sovereignty.

Foreign and Interstate Commerce

• Foreign Commerce Clause: Federal government regulates foreign commerce.
  • State/local regulations burdening foreign commerce are unconstitutional.
• Interstate commerce: Commerce moving between states or affecting commerce between states.

Dormant Commerce Clause

• Federal government has Commerce Clause power but chooses not to regulate an area.
• States can regulate with their police power.
  • Police power: States/local governments enact laws to protect public health, safety, morals, and welfare.
• State regulation should not unduly burden interstate commerce.
  • States can enact laws as long as they don't burden interstate commerce.

E-Commerce and the Constitution

• Electronic commerce (e-commerce): Parties can obtain website domain names and conduct business electronically.
• E-commerce uses:
  • Sales of goods
  • Licensing of intellectual property
  • Sales of services

Bill of Rights and Amendments

• Bill of Rights: First ten amendments to the U.S. Constitution.
  • Guarantees fundamental rights to natural persons.
  • Protects from intrusive government action by federal and state governments (Incorporation doctrine).

Freedom of Speech

• Right to oral, written, and symbolic speech protected by the First Amendment.
  • Fully protected speech: Cannot be regulated or prohibited.
  • Example: Criticizing the President, burning the U.S. flag.
  • Limited protected speech: Subject to time, place, and manner restrictions.
  • Offensive speech: Offensive to many members of society.
  • Commercial speech: Used by businesses, such as advertising.
  • Unprotected speech: Not protected and may be forbidden.
  • Examples: Dangerous speech, child pornography.

Case 4.2: Free Speech Rights and the Internet

• Packingham v. North Carolina, 2017 U.S. Lexis 3871 (2017).
• Issue: Does North Carolina statute prohibiting registered sex offenders from using social media violate the First Amendment?

Freedom of Religion

• Establishment Clause: Prohibits government from establishing a state religion or promoting one religion over another.
• Free Exercise Clause: Prohibits government from interfering with the free exercise of religion.

Equal Protection

• Equal protection clause: States cannot deny equal protection of the laws to any person within its jurisdiction.
  • Laws cannot classify and treat similarly situated persons differently.
  • Corporations are also protected.
  • Classification of individuals is not inherently unlawful.

Standards of Review

• Strict scrutiny test: Applied to classifications based on suspect class (e.g., race) or fundamental rights (e.g., voting).
• Intermediate scrutiny test: Applied to classifications based on protected classes (e.g., gender).
• Rational basis test: Applied to classifications not involving suspect or protected class (e.g., age).
  • Court upholds regulation if there's a justifiable reason.
  • Permits government regulation of business.

Case 4.3: Due Process and Equal Protection Clauses

• Obergefell v. Hodges, 135 S.Ct. 2584 (2015).
• Issue: Do state laws not permitting same-sex marriage violate the Due Process Clause and Equal Protection Clause of the Fourteenth Amendment?

Due Process

• Due process clause: No person shall be deprived of life, liberty, or property without due process of the law.
  • Fifth Amendment: Federal government action.
  • Fourteenth Amendment: State and local government action.
  • Government is not prohibited from taking a person’s life, liberty, or property but must follow due process.

Substantive and Procedural Due Process

• Substantive due process: Laws must be clear and not overly broad.
  • Tested using a reasonable person’s understanding.
  • Laws failing the test are void for vagueness.
• Procedural due process: Government must give proper notice and hearing before depriving a person of life, liberty, or property.

Government Taking of Property

• Takings clause: Government can take property for public use with just compensation.
  • Public use.
  • Just compensation.

Case 4.4: Takings Clause and Just Compensation

• Horne v. Department of Agriculture, 135 S.Ct. 2419.
• Issue: Does the government’s action constitute a taking of personal property under the Takings Clause requiring just compensation?

Privileges and Immunities

• Privileges and Immunities Clause: Citizens of each state are entitled to all privileges and immunities of citizens in the several states.
  • No state shall abridge the privileges or immunities of citizens of the United States.
• Prohibits states from unduly discriminating in favor of their residents.
• Applies only to citizens, not corporations or aliens.