Question

Background: TLG has explained to the GC owners that it is vital to understand the legal system and processes, including the court system and jurisdiction of the courts. This is especially important as GC plans to conduct business over the internet and thus, will have potential transactions throughout the U.S. and, possibly, globally.

For an in initial meeting between GC owners and TLG, Winnie and Ralph asked you to present an overview of the law and the legal system. You explained federalism, common law (see link in Overview), and the court system (see link in Overview in Saylor, Advanced Business Law and the Legal Environment).

In addition, your presentation discussed the nature of law and the legal process. Some of the points included in your presentation are:

(1) the primary purpose of law is to establish a set of rules and guidelines for Society to promote order and to create parameters for acceptable and prohibited behavior;

(2) laws are inevitably subject to interpretation and reinterpretation by courts;

(3) laws must be reasonably specific, and yet sufficiently general, with an inherent flexibility, to withstand the rigors of interpretation and the "test of time";

(4) laws that strike a balance as described in (3) above, usually endure as relevant, applicable rules, even with societal changes and reinterpretations;

example: the U.S. Constitution has withstood the test of time, partly because of an inherent balance of specificity, generality, and flexibility

(5) laws are promulgated and interpreted by human beings, and thus, are imperfect;

(6) some laws have a worthy purpose, but are difficult to adequately enforce, i.e., speed limit laws;

(7) all laws are not necessarily ethical; some conduct can be legal, but considered unethical;

(8) U.S. law has a very dominant protective purpose – protecting all citizens, as well as providing special protections for certain groups of people, in certain circumstances, i.e., minors;

(9) fairness to all is a primary goal of law, but what is fair to one group may be unfair to another group; what is fair in one situation may be unfair in another situation - every right granted to an individual or group, to some extent, impinges on the rights of another individual or group;

(10) legislatures enacting laws, and courts interpreting laws, must weigh and balance the right(s) granted v. the rights restricted by a specific law to determine if the law is justifiable and fair - this weighing and balancing involves determining if there a compelling public interest or purpose for the law that justifies granting certain rights while restricting other rights;

example: highway speed limit laws protect everyone (drivers, passengers, and pedestrians), but also restrict the freedom of drivers to drive at a speed of their choice - on balance, the restriction is easily justified as there is an important purpose in protecting drivers, passengers, and pedestrians

example: laws that prohibit alcohol consumption/purchase by minors grant rights to those 21 years and older, and restrict rights of those under 21 years - on balance, Society, legislatures, and courts have determined this law is justified as Society has a strong public interest in protecting minors who may not have reached a level of maturity and judgment to handle the right to choose to consume/purchase alcohol

(11) the familiar symbol for law and the legal system is the Scale of Justice showing a blindfolded Lady that represents the weighing and balancing process necessary to balance rights v. restrictions granted and imposed by laws.

Instructions:

To explain constitutional law and how it might apply to GC operations and transactions, you decide to prepare a hypothetical example scenario and an accompanying analysis to present to GC owners.

Assume the scenario you prepared follows.

Hypothetical Example Scenario:

EPI sells its green cleaning products to customers in most states. Its biggest product sales are in the Mid-Atlantic states.

Recently, the Delaware legislature enacted a law banning all sales and importation of EPI’s “Brite Clean Floor Cleaner” until further notice. It was discovered that one of the ingredients, derived from corn, is contaminated and causes a quick-growing mold to spread on surfaces to which it is applied. The mold can be toxic for humans and can cause damage to floors.

EPI challenged the new law as unconstitutional.

Address the questions below.

1. Applying the doctrine of "police powers" (see link in Overview) derived from the 10th Amendment of the U.S. Constitution, analyze and discuss whether the Delaware court would likely uphold the Delaware law banning importation of EPI's Brite Clean Floor Cleaner into the state and why or why not. Explain your conclusion in detail.

2. Create an original hypothetical scenario - in a business setting - of a constitutional state law limiting some business activity under the state's police power.

explain why the example is constitutional

Format Instructions:

Prepare the analysis in a report, addressed to Winnie and Ralph, to be used in discussion with the GC owners.

The report should address the questions in the Instructions above. Label each question as 1., 2. Follow the format below.

REPORT TO: Winnie James, Ralph Anders

FROM: (your name)

DATE: RE: Constitutional Law and Business Regulation

1.

2.

Answer 1

The states existed before the Constitution, so the founders said little about their powers until the Tenth Amendment was added in 1791. It holds that “powers not delegated to the United States…nor prohibited by it [the Constitution] to the States, are reserved to the States…or to the people.” States maintain inherent powers that do not conflict with the Constitution. Notably, in the mid-nineteenth century, the Supreme Court recognized that states could exercise police powers to protect the public’s health, safety, order, and morals

Some powers are reserved to the states, such as ratifying proposed amendments to the Constitution and deciding how to elect Congress and the president. National officials are chosen by state elections. Congressional districts are drawn within states. Their boundaries are reset by state officials after the decennial census. So the party that controls a state’s legislature and governorship is able to manipulate districts in its favor. Republicans, having taken over many state governments in the 2010 elections, benefited from this opportunity.