SOLUTION & ANSWER GUIDE
Business Law Today - The Essentials Text &
Summarized Cases, Cengage, 13th edition,
Roger LeRoy Miller, Chapters 1 - 25, Complete
,CHAPTER 1: Legal and Constitutional Foundations of Business
—Appendix to Chapter 1: Finding and Analyzing the Law
CHAPTER 2: Courts and Alternative Dispute Resolution
CHAPTER 3: Ethics in Business
—Appendix to Chapter 3: Code of Ethics Example
CHAPTER 4: Tort Law
CHAPTER 5: Intellectual Property Rights
CHAPTER 6: Internet Law, Social Media, and Privacy
CHAPTER 7: Criminal Law and Cyber Crime
CHAPTER 8: Agreement and Consideration in Contracts
CHAPTER 9: Capacity, Legality, and Enforceability
CHAPTER 10: Contract Performance, Breach, and Remedies
CHAPTER 11: Sales and Lease Contracts
CHAPTER 12: Performance and Breach in Sales and Lease Contracts
CHAPTER 13: Negotiable Instruments
CHAPTER 14: Banking
CHAPTER 15: Creditors’ Rights and Bankruptcy
CHAPTER 16: Agency Relationships in Business
CHAPTER 17: Employment Law
CHAPTER 18: The Entrepreneur’s Options
,CHAPTER 19: Corporations
CHAPTER 20: Investor Protection, Insider Trading, and Corporate
Governance
CHAPTER 21: Antitrust Law and Promoting Competition
CHAPTER 22: Consumer Law
CHAPTER 23: Personal Property, Bailments, and Insurance
CHAPTER 24: Real Property and Environmental Law
CHAPTER 25: International and Space Law
,Solution and Answer Guide
Miller, Business Law Today, The Essentials Text & Summarized Cases 13e,
9780357635346;Chapter 01: Legal and Constitutional Foundations of Business
Table of Contents
Critical Thinking Questions in Features......................................................................................................... 1
Adapting the Law to the Online Environment .......................................................................................... 1
Critical Thinking Questions in Cases.............................................................................................................. 2
Case 1.1 ..................................................................................................................................................... 2
Case 1.2 ..................................................................................................................................................... 3
Case 1.3 ..................................................................................................................................................... 3
Chapter Review ............................................................................................................................................. 4
Practice and Review .................................................................................................................................. 4
Practice and Review: Debate This ............................................................................................................. 5
Issue Spotters ............................................................................................................................................ 5
Business Scenarios and Case Problems..................................................................................................... 5
Critical Thinking and Writing Assignments ............................................................................................. 10
Critical Thinking Questions in Appendix Exhibit 1A–3 ................................................................................ 11
Exhibit 1A–3 ............................................................................................................................................ 11
Critical Thinking Questions in Features
Adapting the Law to the Online Environment
1. One observer has said that the American legal system should evaluate social media companies based on
how ―they affect us as citizens, not only [on how] they affect us as consumers.‖ What is your opinion of
this statement?
Solution
The person who made this statement clearly sees a ―citizen‖ as having different motivations and concerns
than a ―consumer.‖ Presumably, a citizen is mostly concerned with the good of society as a whole, and
therefore would be open to the idea of government regulation that restricted thenegative influence of
social media, regardless of the First Amendment. A consumer, by contrast, would be primarily concerned
with having a marketplace that offers the widest possible varieties of freedom (of choice, of speech, etc.)
and would for that reason be opposed to government regulation of social media. There is, however, an
argument to be made that the citizens that make up a society benefit when the marketplace of ideas—
whether they are subjectively
―positive‖ or ―negative‖—is allowed to flourish in the absence of government regulation.
2. Tim Cook, Apple‘s chief operating officer, has suggested that the United States Congress shouldpass a
law limiting the ability of Apple and other tech countries to keep consumer data private. Why would a
business executive make such a request?
, Solution
Cook may have wanted to end a controversy that puts Apple squarely at odds with the federal
government. After all, large companies such as Apple rely on favorable treatment from the government
in regulatory matters, international trade agreements, and many other areas. Also, large corporations
such as Apple sometimes gain an advantage over competitors when their industries are regulated. For
example, Apple has significant resources with which to lobby Congress for favorable treatment, and it is
better positioned to bear the costs of regulation thanare other, smaller tech companies. Finally, Apple‘s
position as a champion of consumer privacy would be damaged if it ―caved‖ and changed its stance
without being forced to do so by a new federal law.
Critical Thinking Questions in Cases
Case 1.1
1. What ―dangerous conditions‖ might have prompted the city to enact the ordinances at issue in this
case? Why?
Solution
As noted in the facts of the case, both ordinances at issue included an extensive rationale fortheir
adoption, stating essentially that a geographically small city has the right to restrict a
business from operating within the city when the restriction is for the safety of the city‘s citizensand
visitors.
The appellate court referred to ―the dangerous conditions‖ created by the irresponsible driving behavior of
scooter renters, especially at night, amplified by the lack of training, supervision, and oversight practiced
by the rental scooter businesses that ―existed throughout the entire city‖ as the basis for the city‘s
regulation. The court paraphrased the expressive clauses in the ordinancesmore specifically:
• The City is geographically small and crowded and is being besieged by inexperienced scooter drivers
seeking amusement and driving in a dangerous manner.
• The City is a tourist destination frequented by tens of thousands, and its streets are congested by
scooters that are being driven illegally and in areas where they are not permitted.
• The City‘s residents and visitors are put in dangerous situations as a result of the improper use of
scooters, especially at night.
• City businesses have complained about numerous trespasses on their property by people driving
scooters while being disruptive
• City police have been unable to cope with the situation and essential police resources are being
drained.
• The City has been unable to control the situation through less restrictive means.
, 2. What is the likely economic impact of the ordinances on the businesses in the city? Discuss.
Solution
With the exception of the scooter rental businesses, the effect on the city‘s economy is likely tobe
positive in light of the result in the Classy case.
The answer to the previous question contains the reasons in support of this outlook. With a banon
motorized scooters, the ―small and crowded‖ city is not likely to be ―besieged by inexperienced scooter
drivers seeking amusement and driving in a dangerous manner.‖ The streets, filled with ―tens of
thousands‖ of tourists will not be ―congested by scooters that are
being driven illegally and in areas where they are not permitted.‖ Residents and visitors will not be ―put
in dangerous situations as a result of the improper use of scooters, especially at night.‖ There will be an
end to the ―numerous trespasses‖ on business property ―by people driving
scooters while being disruptive.‖ And ―essential police resources‖ will not be ―drained,‖ at least not by
irresponsible scooter drivers and riders. All of which bodes well for business.
Case 1.2
1. If this case had involved a small, private retail business that did not advertise nationally, wouldthe result
have been the same? Why or why not?
Solution
It is not likely that the result in this case would have been different even if the facts had involveda small,
private retail business that did not advertise nationally. The intended impact of the decision in Heart of
Atlanta was to uphold the constitutionality of the Civil Rights Act of 1964 andthe power of Congress to
regulate interstate commerce to stop local discriminatory practices. In the Supreme Court‘s opinion, ―The
power of Congress to promote interstate commerce also includes the power to regulate the local
incidents thereof, including local activities in both the States of origin and destination, which might have a
substantial and harmful effect upon that
commerce.‖
Thus, if the case had involved a small, local retail business, the Court would have found participation in
interstate commerce based on the use of a phone, or a Facebook page (or otherWeb presence), or sales to
customers who traveled across state lines—or, as in Wickard v.
Filburn, participation might have been based on any transaction that might otherwise have
occurred in interstate commerce.
Case 1.3
1. Whose interests are advanced by the banning of certain types of advertising?
Solution
The government‘s interests are advanced when certain ads are banned. For example, in the BadFrog case,
the court acknowledged, by advising the state to restrict the locations where certain ads could be
displayed, that banning of ―vulgar and profane‖ advertising from children‘s sight arguably advanced the
state‘s interest in protecting children from those ads.
, 2. If Bad Frog had sought to use the offensive label to market toys instead of beer, would thecourt‘s
ruling likely have been the same? Explain your answer.
Solution
Probably not. The reasoning underlying the court‘s decision in the case was, in part, that ―the State‘s
prohibition of the labels . . . does not materially advance its asserted interests in insulating children from
vulgarity . . . and is not narrowly tailored to the interest concerning
children.‖ The court‘s reasoning was supported in part by the fact that children cannot buy beer.If the
labels advertised toys, however, the court‘s reasoning might have been different.
Chapter Review
Practice and Review
A state legislature enacted a statute that required any motorcycle operator or passenger on the state‘s
highways to wear a protective helmet. Jim Alderman, a licensed motorcycle operator, suedthe state to
block enforcement of the law. Alderman asserted that the statute violated the equal protection clause
because it placed requirements on motorcyclists that were not imposed on other motorists. Using the
information presented in the chapter, answer the following questions.
1. Why does this statute raise equal protection issues instead of substantive due process concerns?
Solution
When a law or action limits the liberty of some persons but not others, it may violate the equal
protection clause. Here, because the law applies only to motorcycle operators and passengers, it raises
equal protection issues.
2. What are the three levels of scrutiny that the courts use in determining whether a law violatesthe
equal protection clause?
Solution
The three levels of scrutiny that courts apply to determine whether the law or action violates equal
protection are (1) strict scrutiny (if fundamental rights are at stake), (2) intermediate scrutiny (in cases
involving discrimination based on gender or legitimacy), and (3) the ―rational basis‖ test (in matters of
economic or social welfare).
3. Which level of scrutiny or test would apply to this situation? Why?
Solution
The court would likely apply the rational basis test, because the statute regulates a matter of social
welfare by requiring helmets. Similar to seat-belt laws and speed limits, a helmet statute involves the
state‘s attempt to protect the welfare of its citizens. Thus, the court would considerit a matter a social
welfare and require that it be rationally related to a legitimate government objective.
, 4. Under this standard or test, is the helmet statute constitutional? Why or why not?
Solution
The statute is probably constitutional, because requiring helmets is rationally related to a legitimate
government objective (public health and safety). Under the rational basis test, courts rarely strike down
laws as unconstitutional, and this statute will likely further the legitimate stateinterest of protecting the
welfare of citizens and promoting safety.
Practice and Review: Debate This
1. Under the doctrine of stare decisis, courts are obligated to follow the precedents established in their
jurisdictions unless there is a compelling reason not to. Should U.S. courts continue to adhere to this
common law principle, given that our government now regulates so many areas bystatute?
Solution
Both England and the U.S. legal systems were constructed on the common law system. The doctrine ofstare
decisis has always been a major part of this system—courts should follow precedents when they are clearly
established, excepted under compelling reasons. Even though more common law is being turned into statutory
law, the doctrine of stare decisis is still valid. After all, even statutes have to be interpreted by courts. What
better basis for judges to render their decisions than by basing them on precedents related to the subject at
hand?
In contrast, some students may argue that the doctrine of stare decisis is passé. There is certainly less
common law governing, say, environmental law than there was 100 years ago. Given that federal and
state governments increasingly are regulating more aspects of commercialtransactions between
merchants and consumers, perhaps the courts should simply stick to statutory language when disputes
arise.
Issue Spotters
1. The First Amendment to the U.S. Constitution provides protection for the free exercise of religion.A state
legislature enacts a law that outlaws all religions that do not derive from the Judeo- Christian tradition. Is
this law valid within that state? Why or why not?
Solution
No. The U.S. Constitution is the supreme law of the land, and applies to all jurisdictions. A law inviolation of
the Constitution (in this question, the First Amendment to the Constitution) will be declared
unconstitutional.
2. South Dakota wants its citizens to conserve energy. To help reduce consumer consumption of electricity,
the state passes a law that bans all advertising by power utilities within the state. Whatargument could the
power utilities use as a defense to the enforcement of this state law?
Solution
Even if commercial speech is neither related to illegal activities nor misleading, it may be restricted if a
state has a substantial interest that cannot be achieved by less restrictive means. In this situation,
however, the interest in energy conservation is substantial, but it could be achieved by less restrictive
means. That would be the utilities‘ defense against the enforcementof this state law.
Business Scenarios and Case Problems
1. Binding versus Persuasive Authority. A county court in Illinois is deciding a case involving anissue that has
never been addressed before in that state‘s courts. The Iowa Supreme Court, however, recently decided a
case involving a very similar fact pattern. Is the Illinois court
obligated to follow the Iowa Supreme Court‘s decision on the issue? If the United States Supreme
, Court had decided a similar case, would that decision be binding on the Illinois court? Explain.(See The
Common Law.)
Solution
A decision of a court is binding on all inferior courts. Because no state‘s court is inferior to any
other state‘s court, no state‘s court is obligated to follow the decision of another state‘s court on an issue.
The decision may be persuasive, however, depending on the nature of the case and theparticular judge
hearing it. A decision of the United States Supreme Court on an issue is binding, like the decision of any
court, on all inferior courts. The United States Supreme Court is the
nation‘s highest court, however, and thus, its decisions are binding on all courts, including statecourts.
2. Sources of Law. This chapter discussed a number of sources of American law. Which source oflaw takes
priority in the following situations, and why? (See Sources of American Law.)
1. A federal statute conflicts with the U.S. Constitution.
Solution
The U.S. Constitution—The U.S. Constitution is the supreme law of the land. A law in violation of the
Constitution, no matter what its source, will be declared unconstitutional andwill not be enforced.
2. A federal statute conflicts with a state constitutional provision.
Solution
The federal statute—Under the U.S. Constitution, when there is a conflict between a federallaw and a
state law, the state law is rendered invalid.
3. A state statute conflicts with the common law of that state.
Solution
The state statute—State statutes are enacted by state legislatures. Areas not covered bystate
statutory law are governed by state case law.
4. A state constitutional amendment conflicts with the U.S. Constitution.
Solution
The U.S. Constitution—State constitutions are supreme within their respective borders unlessthey
conflict with the U.S. Constitution, which is the supreme law of the land.
3. Equal Protection. Abbott Laboratories licensed SmithKline Beecham Corp. to market an Abbott human
immunodeficiency virus (HIV) drug in conjunction with one of SmithKline‘s drugs. Abbott then increased
the price of its drug fourfold, forcing SmithKline to increase its prices and therebydriving business to
Abbott‘s own combination drug. SmithKline filed a suit in a federal district court against Abbott. During
jury selection, Abbott struck the only self-identified gay person among the potential jurors. (The pricing
of HIV drugs is of considerable concern in the gay community.) Could the equal protection clause be
applied to prohibit discrimination based on sexual orientation in jury selection? Discuss. [SmithKline
Beecham Corp. v. Abbott Laboratories, 740 F.3d 471 (9th Cir. 2014)] (See Due Process, Equal Protection,
and Privacy.)
Solution
Yes. The equal protection clause can be applied to prohibit discrimination based on sexual orientation in
jury selection. The appropriate level of scrutiny would be intermediate scrutiny. Under the equal
protection clause of the Fourteenth Amendment, the government cannot enact alaw or take another
action that treats similarly situated individuals differently. If it does, a court examines the basis for the
distinction. Intermediate scrutiny applies in cases involving
, discrimination based on gender. Under this test, a distinction must be substantially related to an
important government objective.
Gays and lesbians were long excluded from participating in our government and the privileges of
citizenship. A juror strike on the basis of sexual orientation tells the individual who has been struck, as
well as the trial participants and the general public, that the judicial system still treats gays and lesbians
differently. This deprives these individuals of the opportunity to participate in ademocratic institution on
the basis of a characteristic that has nothing to do with their fitness to serve.
In the actual case on which this problem is based, SmithKline challenged the strike. The judge
denied the challenge. On SmithKline‘s appeal, the U.S. Court of Appeals for the Ninth Circuit heldthat the
equal protection clause prohibits discrimination based on sexual orientation in jury selection and requires
that heightened scrutiny be applied to equal protection claims involving sexual orientation. The appellate
court remanded the case for a new trial.
4. Procedural Due Process. Robert Brown applied for admission to the University of Kansas School of Law.
Brown answered ―no‖ to questions on the application asking if he had a criminalhistory and
acknowledged that a false answer constituted ―cause for . . . dismissal.‖ In fact, Brown had criminal
convictions for domestic battery and driving under the influence. He was accepted for admission to the
school. When school officials discovered his history, however, he was notified of their intent to dismiss
him and given an opportunity to respond in writing. He demanded a hearing. The officials refused to
grant Brown a hearing and then expelled him. Didthe school‘s actions deny Brown due process?
Discuss. [Brown v. University of Kansas, 599 Fed.Appx. 833 (10th Cir. 2015)] (See Due Process, Equal
Protection, and Privacy.)
Solution
No. The school‘s actions did not deny Brown due process. Procedural due process requires that any
government decision to take life, liberty, or property must be made fairly. The government must give a
person proper notice and an opportunity to be heard. The government must use fairprocedures—the
person must have at least an opportunity to object to a proposed action before a fair, neutral decision
maker.
In this problem, Robert Brown applied for admission to the University of Kansas School of Law. He
answered ―no‖ to the questions on the application about criminal history and acknowledged that a false
answer constituted cause for dismissal. He was accepted for admission to the school. But Brown had
previous criminal convictions for domestic battery and driving under the influence.When school officials
discovered this history, Brown was notified of their intent to dismiss him and given an opportunity to
respond in writing. He demanded a hearing. The officials refused, and expelled him. As for due process,
Brown knew he could be dismissed for false answers on hisapplication. The school gave Brown notice of
its intent to expel him and gave him an opportunity to be heard (in writing). Due process does not require
that any specific set of detailed proceduresbe followed as long as the procedures are fair.
In the actual case on which this problem is based, Brown filed a suit in a federal district court against the
school, alleging denial of due process. From a judgment in the school‘s favor, Brownappealed. The U.S.
Court of Appeals for the Tenth Circuit affirmed, concluding that ―the
procedures afforded to Mr. Brown were fair.‖
5. The Commerce Clause. Regency Transportation, Inc., operates a freight business throughout the eastern
United States. Regency maintains its corporate headquarters, four warehouses, and amaintenance facility
and terminal location for repairing and storing vehicles in Massachusetts. All of the vehicles in Regency‘s
fleet were bought in other states. Massachusetts imposes a use tax on all taxpayers subject to its
jurisdiction, including those that do business in interstate
Business Law Today - The Essentials Text &
Summarized Cases, Cengage, 13th edition,
Roger LeRoy Miller, Chapters 1 - 25, Complete
,CHAPTER 1: Legal and Constitutional Foundations of Business
—Appendix to Chapter 1: Finding and Analyzing the Law
CHAPTER 2: Courts and Alternative Dispute Resolution
CHAPTER 3: Ethics in Business
—Appendix to Chapter 3: Code of Ethics Example
CHAPTER 4: Tort Law
CHAPTER 5: Intellectual Property Rights
CHAPTER 6: Internet Law, Social Media, and Privacy
CHAPTER 7: Criminal Law and Cyber Crime
CHAPTER 8: Agreement and Consideration in Contracts
CHAPTER 9: Capacity, Legality, and Enforceability
CHAPTER 10: Contract Performance, Breach, and Remedies
CHAPTER 11: Sales and Lease Contracts
CHAPTER 12: Performance and Breach in Sales and Lease Contracts
CHAPTER 13: Negotiable Instruments
CHAPTER 14: Banking
CHAPTER 15: Creditors’ Rights and Bankruptcy
CHAPTER 16: Agency Relationships in Business
CHAPTER 17: Employment Law
CHAPTER 18: The Entrepreneur’s Options
,CHAPTER 19: Corporations
CHAPTER 20: Investor Protection, Insider Trading, and Corporate
Governance
CHAPTER 21: Antitrust Law and Promoting Competition
CHAPTER 22: Consumer Law
CHAPTER 23: Personal Property, Bailments, and Insurance
CHAPTER 24: Real Property and Environmental Law
CHAPTER 25: International and Space Law
,Solution and Answer Guide
Miller, Business Law Today, The Essentials Text & Summarized Cases 13e,
9780357635346;Chapter 01: Legal and Constitutional Foundations of Business
Table of Contents
Critical Thinking Questions in Features......................................................................................................... 1
Adapting the Law to the Online Environment .......................................................................................... 1
Critical Thinking Questions in Cases.............................................................................................................. 2
Case 1.1 ..................................................................................................................................................... 2
Case 1.2 ..................................................................................................................................................... 3
Case 1.3 ..................................................................................................................................................... 3
Chapter Review ............................................................................................................................................. 4
Practice and Review .................................................................................................................................. 4
Practice and Review: Debate This ............................................................................................................. 5
Issue Spotters ............................................................................................................................................ 5
Business Scenarios and Case Problems..................................................................................................... 5
Critical Thinking and Writing Assignments ............................................................................................. 10
Critical Thinking Questions in Appendix Exhibit 1A–3 ................................................................................ 11
Exhibit 1A–3 ............................................................................................................................................ 11
Critical Thinking Questions in Features
Adapting the Law to the Online Environment
1. One observer has said that the American legal system should evaluate social media companies based on
how ―they affect us as citizens, not only [on how] they affect us as consumers.‖ What is your opinion of
this statement?
Solution
The person who made this statement clearly sees a ―citizen‖ as having different motivations and concerns
than a ―consumer.‖ Presumably, a citizen is mostly concerned with the good of society as a whole, and
therefore would be open to the idea of government regulation that restricted thenegative influence of
social media, regardless of the First Amendment. A consumer, by contrast, would be primarily concerned
with having a marketplace that offers the widest possible varieties of freedom (of choice, of speech, etc.)
and would for that reason be opposed to government regulation of social media. There is, however, an
argument to be made that the citizens that make up a society benefit when the marketplace of ideas—
whether they are subjectively
―positive‖ or ―negative‖—is allowed to flourish in the absence of government regulation.
2. Tim Cook, Apple‘s chief operating officer, has suggested that the United States Congress shouldpass a
law limiting the ability of Apple and other tech countries to keep consumer data private. Why would a
business executive make such a request?
, Solution
Cook may have wanted to end a controversy that puts Apple squarely at odds with the federal
government. After all, large companies such as Apple rely on favorable treatment from the government
in regulatory matters, international trade agreements, and many other areas. Also, large corporations
such as Apple sometimes gain an advantage over competitors when their industries are regulated. For
example, Apple has significant resources with which to lobby Congress for favorable treatment, and it is
better positioned to bear the costs of regulation thanare other, smaller tech companies. Finally, Apple‘s
position as a champion of consumer privacy would be damaged if it ―caved‖ and changed its stance
without being forced to do so by a new federal law.
Critical Thinking Questions in Cases
Case 1.1
1. What ―dangerous conditions‖ might have prompted the city to enact the ordinances at issue in this
case? Why?
Solution
As noted in the facts of the case, both ordinances at issue included an extensive rationale fortheir
adoption, stating essentially that a geographically small city has the right to restrict a
business from operating within the city when the restriction is for the safety of the city‘s citizensand
visitors.
The appellate court referred to ―the dangerous conditions‖ created by the irresponsible driving behavior of
scooter renters, especially at night, amplified by the lack of training, supervision, and oversight practiced
by the rental scooter businesses that ―existed throughout the entire city‖ as the basis for the city‘s
regulation. The court paraphrased the expressive clauses in the ordinancesmore specifically:
• The City is geographically small and crowded and is being besieged by inexperienced scooter drivers
seeking amusement and driving in a dangerous manner.
• The City is a tourist destination frequented by tens of thousands, and its streets are congested by
scooters that are being driven illegally and in areas where they are not permitted.
• The City‘s residents and visitors are put in dangerous situations as a result of the improper use of
scooters, especially at night.
• City businesses have complained about numerous trespasses on their property by people driving
scooters while being disruptive
• City police have been unable to cope with the situation and essential police resources are being
drained.
• The City has been unable to control the situation through less restrictive means.
, 2. What is the likely economic impact of the ordinances on the businesses in the city? Discuss.
Solution
With the exception of the scooter rental businesses, the effect on the city‘s economy is likely tobe
positive in light of the result in the Classy case.
The answer to the previous question contains the reasons in support of this outlook. With a banon
motorized scooters, the ―small and crowded‖ city is not likely to be ―besieged by inexperienced scooter
drivers seeking amusement and driving in a dangerous manner.‖ The streets, filled with ―tens of
thousands‖ of tourists will not be ―congested by scooters that are
being driven illegally and in areas where they are not permitted.‖ Residents and visitors will not be ―put
in dangerous situations as a result of the improper use of scooters, especially at night.‖ There will be an
end to the ―numerous trespasses‖ on business property ―by people driving
scooters while being disruptive.‖ And ―essential police resources‖ will not be ―drained,‖ at least not by
irresponsible scooter drivers and riders. All of which bodes well for business.
Case 1.2
1. If this case had involved a small, private retail business that did not advertise nationally, wouldthe result
have been the same? Why or why not?
Solution
It is not likely that the result in this case would have been different even if the facts had involveda small,
private retail business that did not advertise nationally. The intended impact of the decision in Heart of
Atlanta was to uphold the constitutionality of the Civil Rights Act of 1964 andthe power of Congress to
regulate interstate commerce to stop local discriminatory practices. In the Supreme Court‘s opinion, ―The
power of Congress to promote interstate commerce also includes the power to regulate the local
incidents thereof, including local activities in both the States of origin and destination, which might have a
substantial and harmful effect upon that
commerce.‖
Thus, if the case had involved a small, local retail business, the Court would have found participation in
interstate commerce based on the use of a phone, or a Facebook page (or otherWeb presence), or sales to
customers who traveled across state lines—or, as in Wickard v.
Filburn, participation might have been based on any transaction that might otherwise have
occurred in interstate commerce.
Case 1.3
1. Whose interests are advanced by the banning of certain types of advertising?
Solution
The government‘s interests are advanced when certain ads are banned. For example, in the BadFrog case,
the court acknowledged, by advising the state to restrict the locations where certain ads could be
displayed, that banning of ―vulgar and profane‖ advertising from children‘s sight arguably advanced the
state‘s interest in protecting children from those ads.
, 2. If Bad Frog had sought to use the offensive label to market toys instead of beer, would thecourt‘s
ruling likely have been the same? Explain your answer.
Solution
Probably not. The reasoning underlying the court‘s decision in the case was, in part, that ―the State‘s
prohibition of the labels . . . does not materially advance its asserted interests in insulating children from
vulgarity . . . and is not narrowly tailored to the interest concerning
children.‖ The court‘s reasoning was supported in part by the fact that children cannot buy beer.If the
labels advertised toys, however, the court‘s reasoning might have been different.
Chapter Review
Practice and Review
A state legislature enacted a statute that required any motorcycle operator or passenger on the state‘s
highways to wear a protective helmet. Jim Alderman, a licensed motorcycle operator, suedthe state to
block enforcement of the law. Alderman asserted that the statute violated the equal protection clause
because it placed requirements on motorcyclists that were not imposed on other motorists. Using the
information presented in the chapter, answer the following questions.
1. Why does this statute raise equal protection issues instead of substantive due process concerns?
Solution
When a law or action limits the liberty of some persons but not others, it may violate the equal
protection clause. Here, because the law applies only to motorcycle operators and passengers, it raises
equal protection issues.
2. What are the three levels of scrutiny that the courts use in determining whether a law violatesthe
equal protection clause?
Solution
The three levels of scrutiny that courts apply to determine whether the law or action violates equal
protection are (1) strict scrutiny (if fundamental rights are at stake), (2) intermediate scrutiny (in cases
involving discrimination based on gender or legitimacy), and (3) the ―rational basis‖ test (in matters of
economic or social welfare).
3. Which level of scrutiny or test would apply to this situation? Why?
Solution
The court would likely apply the rational basis test, because the statute regulates a matter of social
welfare by requiring helmets. Similar to seat-belt laws and speed limits, a helmet statute involves the
state‘s attempt to protect the welfare of its citizens. Thus, the court would considerit a matter a social
welfare and require that it be rationally related to a legitimate government objective.
, 4. Under this standard or test, is the helmet statute constitutional? Why or why not?
Solution
The statute is probably constitutional, because requiring helmets is rationally related to a legitimate
government objective (public health and safety). Under the rational basis test, courts rarely strike down
laws as unconstitutional, and this statute will likely further the legitimate stateinterest of protecting the
welfare of citizens and promoting safety.
Practice and Review: Debate This
1. Under the doctrine of stare decisis, courts are obligated to follow the precedents established in their
jurisdictions unless there is a compelling reason not to. Should U.S. courts continue to adhere to this
common law principle, given that our government now regulates so many areas bystatute?
Solution
Both England and the U.S. legal systems were constructed on the common law system. The doctrine ofstare
decisis has always been a major part of this system—courts should follow precedents when they are clearly
established, excepted under compelling reasons. Even though more common law is being turned into statutory
law, the doctrine of stare decisis is still valid. After all, even statutes have to be interpreted by courts. What
better basis for judges to render their decisions than by basing them on precedents related to the subject at
hand?
In contrast, some students may argue that the doctrine of stare decisis is passé. There is certainly less
common law governing, say, environmental law than there was 100 years ago. Given that federal and
state governments increasingly are regulating more aspects of commercialtransactions between
merchants and consumers, perhaps the courts should simply stick to statutory language when disputes
arise.
Issue Spotters
1. The First Amendment to the U.S. Constitution provides protection for the free exercise of religion.A state
legislature enacts a law that outlaws all religions that do not derive from the Judeo- Christian tradition. Is
this law valid within that state? Why or why not?
Solution
No. The U.S. Constitution is the supreme law of the land, and applies to all jurisdictions. A law inviolation of
the Constitution (in this question, the First Amendment to the Constitution) will be declared
unconstitutional.
2. South Dakota wants its citizens to conserve energy. To help reduce consumer consumption of electricity,
the state passes a law that bans all advertising by power utilities within the state. Whatargument could the
power utilities use as a defense to the enforcement of this state law?
Solution
Even if commercial speech is neither related to illegal activities nor misleading, it may be restricted if a
state has a substantial interest that cannot be achieved by less restrictive means. In this situation,
however, the interest in energy conservation is substantial, but it could be achieved by less restrictive
means. That would be the utilities‘ defense against the enforcementof this state law.
Business Scenarios and Case Problems
1. Binding versus Persuasive Authority. A county court in Illinois is deciding a case involving anissue that has
never been addressed before in that state‘s courts. The Iowa Supreme Court, however, recently decided a
case involving a very similar fact pattern. Is the Illinois court
obligated to follow the Iowa Supreme Court‘s decision on the issue? If the United States Supreme
, Court had decided a similar case, would that decision be binding on the Illinois court? Explain.(See The
Common Law.)
Solution
A decision of a court is binding on all inferior courts. Because no state‘s court is inferior to any
other state‘s court, no state‘s court is obligated to follow the decision of another state‘s court on an issue.
The decision may be persuasive, however, depending on the nature of the case and theparticular judge
hearing it. A decision of the United States Supreme Court on an issue is binding, like the decision of any
court, on all inferior courts. The United States Supreme Court is the
nation‘s highest court, however, and thus, its decisions are binding on all courts, including statecourts.
2. Sources of Law. This chapter discussed a number of sources of American law. Which source oflaw takes
priority in the following situations, and why? (See Sources of American Law.)
1. A federal statute conflicts with the U.S. Constitution.
Solution
The U.S. Constitution—The U.S. Constitution is the supreme law of the land. A law in violation of the
Constitution, no matter what its source, will be declared unconstitutional andwill not be enforced.
2. A federal statute conflicts with a state constitutional provision.
Solution
The federal statute—Under the U.S. Constitution, when there is a conflict between a federallaw and a
state law, the state law is rendered invalid.
3. A state statute conflicts with the common law of that state.
Solution
The state statute—State statutes are enacted by state legislatures. Areas not covered bystate
statutory law are governed by state case law.
4. A state constitutional amendment conflicts with the U.S. Constitution.
Solution
The U.S. Constitution—State constitutions are supreme within their respective borders unlessthey
conflict with the U.S. Constitution, which is the supreme law of the land.
3. Equal Protection. Abbott Laboratories licensed SmithKline Beecham Corp. to market an Abbott human
immunodeficiency virus (HIV) drug in conjunction with one of SmithKline‘s drugs. Abbott then increased
the price of its drug fourfold, forcing SmithKline to increase its prices and therebydriving business to
Abbott‘s own combination drug. SmithKline filed a suit in a federal district court against Abbott. During
jury selection, Abbott struck the only self-identified gay person among the potential jurors. (The pricing
of HIV drugs is of considerable concern in the gay community.) Could the equal protection clause be
applied to prohibit discrimination based on sexual orientation in jury selection? Discuss. [SmithKline
Beecham Corp. v. Abbott Laboratories, 740 F.3d 471 (9th Cir. 2014)] (See Due Process, Equal Protection,
and Privacy.)
Solution
Yes. The equal protection clause can be applied to prohibit discrimination based on sexual orientation in
jury selection. The appropriate level of scrutiny would be intermediate scrutiny. Under the equal
protection clause of the Fourteenth Amendment, the government cannot enact alaw or take another
action that treats similarly situated individuals differently. If it does, a court examines the basis for the
distinction. Intermediate scrutiny applies in cases involving
, discrimination based on gender. Under this test, a distinction must be substantially related to an
important government objective.
Gays and lesbians were long excluded from participating in our government and the privileges of
citizenship. A juror strike on the basis of sexual orientation tells the individual who has been struck, as
well as the trial participants and the general public, that the judicial system still treats gays and lesbians
differently. This deprives these individuals of the opportunity to participate in ademocratic institution on
the basis of a characteristic that has nothing to do with their fitness to serve.
In the actual case on which this problem is based, SmithKline challenged the strike. The judge
denied the challenge. On SmithKline‘s appeal, the U.S. Court of Appeals for the Ninth Circuit heldthat the
equal protection clause prohibits discrimination based on sexual orientation in jury selection and requires
that heightened scrutiny be applied to equal protection claims involving sexual orientation. The appellate
court remanded the case for a new trial.
4. Procedural Due Process. Robert Brown applied for admission to the University of Kansas School of Law.
Brown answered ―no‖ to questions on the application asking if he had a criminalhistory and
acknowledged that a false answer constituted ―cause for . . . dismissal.‖ In fact, Brown had criminal
convictions for domestic battery and driving under the influence. He was accepted for admission to the
school. When school officials discovered his history, however, he was notified of their intent to dismiss
him and given an opportunity to respond in writing. He demanded a hearing. The officials refused to
grant Brown a hearing and then expelled him. Didthe school‘s actions deny Brown due process?
Discuss. [Brown v. University of Kansas, 599 Fed.Appx. 833 (10th Cir. 2015)] (See Due Process, Equal
Protection, and Privacy.)
Solution
No. The school‘s actions did not deny Brown due process. Procedural due process requires that any
government decision to take life, liberty, or property must be made fairly. The government must give a
person proper notice and an opportunity to be heard. The government must use fairprocedures—the
person must have at least an opportunity to object to a proposed action before a fair, neutral decision
maker.
In this problem, Robert Brown applied for admission to the University of Kansas School of Law. He
answered ―no‖ to the questions on the application about criminal history and acknowledged that a false
answer constituted cause for dismissal. He was accepted for admission to the school. But Brown had
previous criminal convictions for domestic battery and driving under the influence.When school officials
discovered this history, Brown was notified of their intent to dismiss him and given an opportunity to
respond in writing. He demanded a hearing. The officials refused, and expelled him. As for due process,
Brown knew he could be dismissed for false answers on hisapplication. The school gave Brown notice of
its intent to expel him and gave him an opportunity to be heard (in writing). Due process does not require
that any specific set of detailed proceduresbe followed as long as the procedures are fair.
In the actual case on which this problem is based, Brown filed a suit in a federal district court against the
school, alleging denial of due process. From a judgment in the school‘s favor, Brownappealed. The U.S.
Court of Appeals for the Tenth Circuit affirmed, concluding that ―the
procedures afforded to Mr. Brown were fair.‖
5. The Commerce Clause. Regency Transportation, Inc., operates a freight business throughout the eastern
United States. Regency maintains its corporate headquarters, four warehouses, and amaintenance facility
and terminal location for repairing and storing vehicles in Massachusetts. All of the vehicles in Regency‘s
fleet were bought in other states. Massachusetts imposes a use tax on all taxpayers subject to its
jurisdiction, including those that do business in interstate
