US Constitution: Branches, Articles, and Amendments

• The US Constitution outlines the structure of the government.
• Article I describes the Legislative Branch.
• Article II describes the Executive Branch.
• Article III describes the Judicial Branch.
• Article IV delineates the relationship between the states and the relationship between the federal government and the states.
• Article V outlines the process for amending the Constitution.
• Article VI contains the Supremacy Clause and prohibits religious tests for government positions.
• Article VII describes the ratification process.
• There are 27 amendments to the Constitution.

Key Concepts Related to Business

• Separation of Powers.
• Supremacy Clause.
• Commerce Clause.
• Contract Clause.

Separation of Powers

• The powers are split across the three governments branches.
• Checks and Balances exist between branches.
• Federalism divides power between federal and state governments.
• Each branch can check the power of the other branches.
• This prevents any one branch from becoming too powerful.
• Federalism is a division of power between federal and state governments.
• The federal government was created by the states.
• The Tenth Amendment reserves powers not delegated to the federal government to the states or the people.
• This ensures that the federal government remains limited in scope.

Supremacy Clause

• The Supremacy Clause comes from Article VI.
• The Constitution and federal laws are the supreme law of the land.
• State judges are bound by the Constitution, even if state laws conflict with it.
• The Constitution is the highest law, and federal law is superior to state or local laws.
• Any state or local law conflicting with federal law can be preempted/struck down.

Preemption

• Under the Supremacy Clause, federal law preempts state law.
• Express preemption happens when Congress explicitly states that federal law preempts state law.
• Implied preemption occurs even without explicit language if certain conditions are met.
• Even with express preemption language, the scope of preemption can be debated to analyze Congress's intent.
• Congress may also explicitly state it does not intend to preempt state regulation in a specific area.
• Implied preemption can occur if there is conflict preemption or field preemption.
• Conflict preemption happens when it's impossible to comply with both state and federal law, or the state law interferes with the federal law's objectives.
• Field preemption is established if the federal government fully occupies a field it has chosen to regulate.
• Field preemption does not require a conflict between state and federal law; it can occur even if state law furthers the same purpose.

Commerce Clause

• The Commerce Claude is from Article 1, Section 8.
• Congress has the power to regulate commerce with foreign nations, among states, and with Indian tribes.
• The federal government regulates business in three stated areas according to the Commerce Clause.

Regulation of Foreign Commerce

• The federal government alone has the power to regulate foreign commerce.
• It can prohibit trade entirely, e.g., the trade embargo with Cuba.
• It can impose conditions on foreign trade, e.g., tariffs.

Regulation of Interstate Commerce

• The federal government can regulate commerce between the states.
• Gibbons v. Ogden (1824): SCT concluded that regulation of steamboat operators who were conducting interstate commerce.
• NY could not pass a law that interfered with interstate commerce.
• Gibbons allowed to operate a competing steamboat, NY law invalid.
• "Affectation Doctrine" says Congress can regulate any activity that, in the aggregate, has a substantial economic effect on interstate commerce.
• Wickard v. Filburn (1942): Regulation valid under Commerce Clause as regulating commerce among the states.
• Federal regulation of wheat production stabilized wheat prices during WWII.
• Katzenbach v. McClung (1964): The Civil Rights Act is a constitutional exercise of the power under the Commerce Clause.
• Civil Rights Act of 1964 outlawed segregation in schools and public places.
• Racial discrimination in restaurants has a large impact and segregation creates an artificial limitation on commerce between the states.
• U.S. v. Lopez (1995) – US SCT voided 1990 Gun-Free School Zones Act, which prohibited possession of a gun within 1000 feet of a school because schools isn't economic activity.
• U.S. v. Morrison (2000) – US SCT voided aspects of the 1994 Violence Against Women Act, due again to the act not being economic activity.
• Gonzales v. Oregon (2006) – US SCT held that USAG cannot interpret federal Controlled Substances Act to override Oregon state law (Death with Dignity Act) permitting physician-assisted suicide for incurably ill patients.
• The Commerce Clause affirmatively grants the federal government the authority to regulate interstate commerce

State Regulation of Interstate Commerce

• The Constitution does not grant the federal government the exclusive right to enact laws that impact interstate commerce.
• It also does not expressly address whether or the extent to which state governments may pass laws that impact interstate commerce.
• The Tenth Amendment says the powers not delegated to the federal government are reserved to the states or the people.
• Police powerthe general power of the states to establish and enforce laws protecting the welfare, safety, and health of the public.
• Under the Dormant Commerce Clause doctrine, because Congress has power over interstate commerce, states cannot discriminate nor unduly burden it, even without federal legislation.
• Restrictions on state power are a necessary implication of granted authority to Congress.

Dormant Commerce Clause

• A key question in evaluating if a state law violates the clause asks if it imposes an undue burden on interstate commerce.
• State interstate commerce laws that discriminate are subject to rigorous review and often create an undue burden.
• State laws with only incidental interstate commerce effects violate the Dormant Commerce Clause if burdens outweigh local benefits.
• This is known as the balancing test.
• Preemption requires both federal and state law on the same subject.
• If there is no federal law, there is no preemption argument, but there could be a Dormant Commerce Clause argument.
• If there is a federal law, there may be both a preemption and Dormant Commerce Clause argument if interstate commerce is discriminated against or unduly burdened.

Contract Clause

• The Contract Clause from Art. 1, Sec. 10 says "No State shall pass any Law impairing the Obligation of Contracts.”
• This clause does not limit the federal government's power.
• It prohibits states from enacting laws that impact existing, valid contracts.
• A rare except to the Contract Clause is state laws enacted in response to certain emergencies have been upheld, e.g. state law to prevent mass mortgage foreclosures in the Great Depression.