Blaw 3430 Exam 2 6,7,8,9,10 Unt

Front 1

List the governmental powers that agencies can exercise

Back 1

Federal agencies are bureaucracies of non-elected officials that exercise varying degrees of legislative, executive and judicial power depending on the Agency. An Agency exercises legislative power when it promulgates rules and regulations. Federal Agencies exercise executive power by conducting investigations and citing businesses for non-compliance of Agency Regulations or Federal Statutes. Federal Agencies exercise judicial power when conducting hearings to determine whether violations of regulations or statutes have occurred.

Front 2

Who has created most Federal Agencies

Back 2

For the most part Congress has enacted legislation creating Federal Agencies because of public demands for action and the lack of time and expertise by Congress.

Front 3

Why are Agencies created

Back 3

For the most part Congress has enacted legislation creating Federal Agencies because of public demands for action and the lack of time and expertise by Congress.

Front 4

Explain the Doctrine of Separation of Powers

Back 4

The Doctrine of Separation of Powers is based on the following from the U S Constitution:
Article I Section 1 of the U S Constitution states: “All legislative power...shall be vested in Congress.”
Article II Section 1 states: “The executive power shall be vested in a President.”
Article III Section 1 states: “The judicial power of the U S, shall be vested in one Supreme Court, and in such inferior Courts as the Congress may...establish.”
Thus, only Congress can legislate. Only the Executive Branch can enforce the laws. Only the Judicial Branch can hear and resolve disputes.
The Constitution separates the powers of government to prevent concentration of power by any one branch of government.

Front 5

Explain why the exercise of Legislative Power by an Agency does not violate the Doctrine of Separation of Powers

Back 5

The U.S. Supreme Court has held that agencies can promulgate rules and not be in violation of Article I Section I of the U.S. Constitution so long as statutes creating agencies specify objectives for the agencies and the agencies act in accordance with proscribed objectives.

Front 6

Explain why the exercise of Executive Power by an Agency does not violate the Doctrine of Separation of Powers

Back 6

Federal Agencies exercise executive power that the Department of Justice usually exercises when conducting investigations and issuing citations. The U.S. Supreme Court has held that agencies exercise of executive power does not violate Article II Section I of the U.S. Constitution since the President appoints the heads of agencies and Congress determines the budget of Federal Agencies. In addition Congress can increase or decrease the regulatory authority of an Agency.

Front 7

Explain why the exercise of Judicial Power by an Agency does not violate the Doctrine of Separation of Powers

Back 7

The U.S. Supreme Court has held that agency hearings where facts are found, law applied and a decision rendered other than in a trial court are valid under Article III Section I of the U.S. Constitution since the losing party has a right to appeal a final agency decision to a Federal Court of Appeals.

Front 8

State the term that describes an Agency exercising legislative power.

Back 8

Explain how Federal Agency exercise of Legislative Power is defined.
An agency exercising legislative power is promulgating.

Front 9

Explain where proposed actions on rules/regulations are officially announced.

Back 9

Rules/regulations that have been issued by federal agencies are officially published in the Code of Federal Regulations.

Front 10

Define the official governmental publication that lists existing agency rules.

Back 10

of proposed rules, modifications or repeals are officially published in the Federal Register.

Front 11

Define Substantive Rules.

Back 11

Agency rules/regulations that have the same force as statutes passed by Congress

Front 12

Define Interpretative Rules.

Back 12

Agency rules/regulations that affect the rights and duties of persons and enterprises covered by the rules, that are not binding on the courts even though the courts usually accept them out of deference to tm,he expertise of the agency

Front 13

Define Procedural Rules.

Back 13

govern policies and practices of Agencies

Front 14

Explain Hybrid Rulemaking.

Back 14

is a cross between formal and informal rulemaking that may involve invited comments and formal hearings.

Front 15

Explain Formal Rulemaking.

Back 15

occurs where hearings are scheduled, notice is given in the Federal Register of times, dates and places inviting interested parties to appear and make oral presentations.

Front 16

Explain Informal Rulemaking

Back 16

rulemaking occurs where interested persons are invited by notice given in the Federal Register to submit written responses favoring or criticizing agency activities respecting rules.

Front 17

List challenges to Agency Rulemaking.

Back 17

(1) the agency failed to follow appropriate procedures in rulemaking such as failing to appropriately give public notice of rule making,
(2) the agency acted in an arbitrary and capricious manner in promulgating the rule
(3) the agency exceeded delegated authority.
(4) the conclusions of the agency are not supported by substantial evidence
evidence that a reasonable mind would accept as adequate to support a conclusion utilized in reviewing formal and hybrid rulemaking
(5) constitutional provisions have been violated

Front 18

Explain how Agencies exercise Executive Power.

Back 18

Federal Agencies exercising executive power issue subpoenas and conduct on site investigations in determining whether violations exists. Fourth Amendment issues are raised as to whether particular subpoenas or on site investigations are appropriate Federal Agencies exercise executive power to determine
whether Business is in compliance and or whether rules and
regulations are appropriate.
To determine compliance and appropriateness Agencies
(1) Require submission of information on specified forms,
(2) Subpoena of documents and records and
(3) Conduct on site investigations.
Fourth Amendment issues may be raised as to the validity of
(2)subpoenas as well as (3)on site investigations.

Front 19

List challenges to Agency Subpoenas for records.

Back 19

Challenges to an agency investigation include:
(1) not for a legitimate purpose - beyond power of the agency
(2) inquiry is not relevant to purpose of the particular investigation
(3) agency already has information
(4) administrative steps have not been followed - information requested not appropriately described - not within time guideline
The above defenses have been articulated in an attempt to protect Fourth Amendment rights.

Front 20

Explain whether Warrants are required under the Fourth Amendment in order to conduct Agency onsite inspections.

Back 20

Fourth Amendment issues may be raised as to the validity of
(2)subpoenas as well as (3)on site investigations.

Front 21

Explain what can amount to probable cause for obtaining a Warrant for conducting an onsite inspection

Back 21

The rules set forth by the Court in Marshall v Barlow are precedent for other Governmental Agencies such as The Environmental Protection Agency that have reason to conduct on site inspections to determine whether firms are in compliance with regulations

Front 22

Explain Administrative and Legislative inspections.

Back 22

The Court in Marshall v. Barlow stated Probable Cause as
required to obtain a warrant by the Fourth Amendment could be
satisfied by Legislative and or Administrative Standards. Such
standards involve preparing an inspection plan utilizing objective
means to assure that firms with a higher incidence of injuries in
the workplace are inspected prior to those with lesser incidence
of injuries. OSHA develops such a plan by utilizing data on
injuries from the Insurance Industry and other sources that collect
information on workplace injuries. OSHA then prepares and presents to a judge an inspection plan that schedules inspections of firms with a higher history of injuries prior to those with lesser rates of injuries. If the judge finds credible evidence to support the plan, he will issue the warrants

Front 23

Explain what occurs at an Agency Hearing (Judicial Procedure).

Back 23

Agency hearings are trial court type proceedings conducted by administrative law judges or agency hearing officers who find facts, apply law and render a decision in other than a trial court.

Front 24

Explain when a party not satisfied with Agency Hearings can access the courts and where.

Back 24

One challenging an agency claim of a violation must participate in agency hearings where the agency has been given judicial power by Congress. One must participate in agency hearings prior to challenging agency decisions in Court. Generally challenges to agency hearing decisions must be filed in a Federal Appellate Court. Note that the agency hearing process takes the place of trial court proceedings. Some agencies afford one or more appeals processes which dissatisfied parties must utilize before they can exercise their right to appeal to a Federal Appellate Court. One must exhaust all agency hearing/appeals before one can seek review by a Federal Court of Appeals

Front 25

Explain if the Constitution limits/defines the power of Congress to Legislate and if so where?

Back 25

Yes. Article 1 Section 8.
Congress power to legislate is not open ended. The power of Congress to legislate is defined in Article I Section 8. The power is articulated in terms of subject matters including the power to impose and collect taxes, to borrow money, to regulate commerce with foreign nations and among the states, to enact bankruptcy laws, to coin money, to declare war as well as to constitute courts inferior to the Supreme Court.

Front 26

Explain the Constitutional basis for the federal regulation of business as noted in Wickard.

Back 26

The Commerce Clause provides the basis for the regulation of business.

Front 27

The Commerce Clause as stated in the Constitution

Back 27

Congress shall have the power... to regulate Commerce with foreign nations, and among the several States, and with the Indian Tribes.

Front 28

Does the Constitution define Commerce?

Back 28

No

Front 29

What is a dictionary definition of Commerce?

Back 29

Economic transactions such as the buying and selling of goods.

Front 30

How do the Courts describe commerce among the States?

Back 30

Commerce among the states is defined as intERstate commerce.

Front 31

How do the Courts describe commerce wholly within a state?

Back 31

Commerce wholly within a state is defined as intRAstate commerce.

Front 32

Explain what activity Congress was attempting to regulate in Wickard and why.

Back 32

[7]Begin: In July of 1940, pursuant to the Agricultural Adjustment Act of 1938, as then amended, there were established for the appellee's 1941 crop a wheat acreage allotment of 11.1 acres and a normal yield of 20.1 bushels of wheat an acre. He was given notice of such allotment in July of 1940 before the Fall planting of his 1941 crop of wheat, and again in July of 1941, before it was harvested. He sowed, however, 23 acres, and harvested from his 11.9 acres of excess acreage 239 bushels, which under the terms of the Act as amended on May 26, 1941, constituted farm [317 U.S. 111, 115] marketing excess, subject to a penalty of 49 cents a bushel, or $117.11 in all. The appellee has not paid the penalty and he has not postponed or avoided it by storing the excess under regulations of the Secretary of Agriculture, or by delivering it up to the Secretary. The Committee, therefore, refused him a marketing card, which was, under the terms of Regulations promulgated by the Secretary, necessary to protect a buyer from liability to the penalty and upon its protecting lien. 4
The general scheme of the Agricultural Adjustment Act of 1938 as related to wheat is to control the volume moving in interstate and foreign commerce in order to avoid surpluses and shortages and the consequent abnormally low or high wheat prices and obstructions to commerce. 5 Within prescribed limits and by prescribed standards the Secretary of Agriculture is directed to ascertain and proclaim each year a national acreage allotment for the next crop of wheat, which is then apportioned to the states and their counties, and is eventually broken up into allotments for individual farms. 6 Loans and payments to wheat farmers are authorized in stated circumstances. 7 [7]End

Front 33

Explain whether the statute in Wickard governed interstate or intrastate activity.

Back 33

because Filburn's wheat growing activities reduced the amount of wheat he would buy for chicken feed on the open market, and because wheat was traded nationally, Filburn's production of more wheat than he was allotted was affecting interstate commerce, and so could be regulated by the federal government.

Front 34

Explain whether regulating the number of acres a farmer could plant in wheat was commerce.

Back 34

It effects the price of wheat by driving prices down.

Front 35

. Explain how the Court in Wickard stated Congress could regulate intrastate/local activities that did not amount to commerce.

Back 35

sustaining the federal power to regulate production of goods for commerce except for the fact that this Act extends federal regulation to production not intended in any part for commerce but wholly for consumption on the farm.

Front 36

How did the court explain that what an individual farmer plants has a national consequence(economic), since the Court stated farming was not commerce and the actions of an individual farmer were not interstate

Back 36

One of the primary purposes of the Act in question was to increase the market price of wheat and to that end to limit the volume thereof that could affect the market. It can hardly be denied that a factor of such volume and variability as home-consumed wheat would have a substantial influence on price and market conditions. This may arise because being in marketable condition such wheat overhangs the market and if induced by rising prices tends to flow into the market and check price increases. But if we assume that it is never marketed, it supplies a need of the man who grew it which would otherwise be reflected by purchases in the open market. Home-grown wheat in this sense competes with wheat in commerce. The stimulation of commerce is a use of the regulatory function quite as definitely as prohibitions or restrictions thereon. This record leaves us in no doubt that Congress [317 U.S. 111, 129] may properly have considered that wheat consumed on the farm where grown if wholly outside the scheme of regulation would have a substantial effect in defeating and obstructing its purpose to stimulate trade therein at increased prices.

Front 37

What were the provisions of the statute the defendant was charged under in Lopez? Was the statute state or federal? Was the statute criminal or civil? If the statute was Federal what was the Constitutional basis?

Back 37

Congress' Commerce Clause authority, Federal, Criminal, The Government's principal argument was that the possession of a firearm in an educational environment would most likely lead to a violent crime, which in turn would affect the general economic condition in one of two ways: first, because violent crime causes damage and creates expense, it raises insurance costs, which are spread throughout the economy; and second, by limiting the willingness to travel in the area perceived to be unsafe. The Government also argued that the presence of firearms within a school would be seen as dangerous, resulting in students' being scared and disturbed; this would, in turn, inhibit learning; and this, in turn, would lead to a weaker national economy since education is obviously an important element of the nation's economic health.

Front 38

.Did the Court in Lopez accept or reject the nearly 50 year old analysis of the Commerce Clause in Wickard?

Back 38

After reviewing and analyzing precedent on the Commerce Clause
the Court found Wickard valid and applicable.

Front 39

What did the Court in Lopez say was the proper test for determining whether an act/statute is appropriate under the commerce clause?

Back 39

[T]he proper test requires an analysis of whether the regulated
activity "substantially affects" interstate commerce.
(Substantial is defined as more than trivial). For the Wickard commerce clause analysis to be applicable, need a statute regulating activities that will have national economic effect.

Front 40

How did the Court differentiate between the statute in Wickard and the statute in Lopez?

Back 40

Wickard, which is perhaps the most far reaching example of
Commerce Clause authority over intrastate activity, involved
economic activity in a way that the possession of a gun in a
school zone does not.

Front 41

16. Explain what the Court said about the Commerce Clause and criminal statutes.

Back 41

a criminal statute that by its terms has nothing to do with "commerce" or any sort of economic enterprise, however broadly those terms are defined The Act in question is a criminal statute that by its terms has
nothing to do with “Commerce" or any sort of economic
enterprise, however broadly one might define those terms.
The Act is not an essential part of a larger regulation of
economic activity, in which the regulatory scheme could be
undercut unless the intrastate activity were regulated. It cannot,
therefore, be sustained under our cases upholding regulations
of activities that arise out of or are connected with a commercial
transaction, which viewed in the aggregate, substantially
affects interstate commerce.

Front 42

17. What did the Court say about legislative findings concerning the statute in Lopez as part of Commerce Clause analysis?

Back 42

[A]s part of our independent evaluation of constitutionality
under the Commerce Clause we of course consider legislative
findings, and indeed even congressional committee findings,
regarding effect on interstate commerce. The Government
concedes that "[n]either the statute nor its legislative history
contain[s] express congressional findings regarding the
effects upon interstate commerce of gun possession in a school
zone."

Front 43

18. What arguments did the Government make for the first time before the Supreme Court in support of the statute in Lopez?

Back 43

The Government's essential contention, in fine, is that we
may determine here that the Act is valid because possession
of a firearm in a local school zone does indeed substantially
affect interstate commerce. The Government argues that
possession of a firearm in a school zone may result in violent
crime and that violent crime can be expected to affect the
functioning of the national economy in two ways.
First, the costs of violent crime are substantial, and,
through the mechanism of insurance, those costs are
spread throughout the population.

Front 44

19. What concerns did the Court express in response to the Governments arguments?

Back 44

Under the theories that the Government presents in support
of the Act, it is difficult to perceive any limitation on federal
power under the commerce clause, even in areas such as criminal law enforcement or education where States historically have been sovereign. Thus, if we were to accept the Government's arguments, we are hard‑pressed to posit any activity by an individual that Congress is without power to regulate.

Front 45

20. Explain why the Court was not willing to accept the Governments arguments.

Back 45

To uphold the Government's contentions here, we would have
to pile inference upon inference in a manner that would bid
fair to convert congressional authority under the Commerce
Clause to a general police power of the sort retained
by the States…. This we are unwilling to do.

Front 46

21. Explain who the Constitution designates to determine what should be regulated under the Commerce Clause.

Back 46

In judicial review under the Commerce Clause, it reflects
our respect for the institutional competence of the Congress
on a subject expressly assigned to it by the Constitution

Front 47

22. Explain how the Court has traditionally analyzed legislation under the Commerce Clause.

Back 47

In reviewing congressional legislation under the Commerce
Clause, we defer to what is often a merely implicit
congressional judgment that its regulation addresses a
subject substantially affecting interstate commerce "if there
is any rational basis for such a finding."

Front 48

23. Explain why the Court has deferred to Congress on Subject Matter for Regulation under the Commerce Clause.

Back 48

[O]ur appreciation of the legitimacy that comes from
Congress's political accountability in dealing with matters
open to a wide range of possible choices. (Congress is elected. The Court is not.)

Front 49

24. According to the Dissent what limits the power of Congress to regulate?

Back 49

Left in question was how the Court might have decided
the case had Congress made express findings linking
the Criminal Act and the Commerce Clause.
Watch for how the Court addresses the issue in Morrison!

Front 50

What were the provisions of the statute the defendant was charged under in Morrison? Was the statute state or federal? Was the statute criminal or civil? If the statute was Federal what was the Constitutional basis?

Back 50

The Violence Against Women Act of 1994, states that "[a]ll persons
shall have the right to be free from crimes of violence motivated
by gender." To enforce that right, subsection (c) declares:
"A person who commits a crime of violence motivated by gender
and thus deprives another of the right declared in subsection (b) of
this section shall be liable to the party injured, in an action for the
recovery of compensatory and punitive damages, injunctive and
declaratory relief, and such other relief as a court may
deem appropriate." (The Act was federal criminal statute based on the Commerce Clause.)

Front 51

. Explain the Constitutional basis of the statue in question.

Back 51

Every law enacted by Congress must be based on one or more of
its powers enumerated in the Constitution. "The powers of the
legislature are defined and limited; and that those limits may not be
mistaken or forgotten, the constitution is written."
Congress explicitly identified the sources of federal authority on
which it relied in enacting §13981. It said that a "federal civil
rights cause of action" is established "[p]ursuant to the affirmative
power of Congress ... under section 8 of Article I of the Constitution."

Front 52

. How did the Court explain Congress power to regulate
under the Commerce Clause?

Back 52

Congress' commerce authority includes the power to
regulate those activities having a substantial relation to
interstate commerce, ... i.e., those activities that
substantially affect interstate commerce."

Front 53

28. Explain what the Court said about the statute in question
under the Commerce Clause.

Back 53

Gender‑motivated crimes of violence are not, in any sense
of the phrase, economic activity. While we need not adopt
a categorical rule against aggregating the effects of any
noneconomic activity in order to decide these cases, thus far
in our Nation's history our cases have upheld Commerce
Clause regulation of intrastate activity only where that
activity is economic in nature.

Front 54

How did the Court respond to the Congressional findings
that the statute in Morrison affected commerce?

Back 54

In contrast with the lack of congressional findings that we
faced in Lopez, §13981 is supported by numerous findings
regarding the serious impact that gender‑motivated violence
has on victims and their families. But the existence of
congressional findings is not sufficient, by itself, to sustain
the constitutionality of Commerce Clause legislation. As
we stated in Lopez, " `[S]imply because Congress may
conclude that a particular activity substantially affects
interstate commerce does not necessarily make it so.' ". Rather, "
`[w]hether particular operations affect interstate commerce
sufficiently to come under the constitutional power of Congress
to regulate them is ultimately a judicial rather than a legislative
question, and can be settled finally only by this Court.' "

Front 55

30. What was the Court’s concern about Congressional findings?

Back 55

[T]he concern that we expressed in Lopez that Congress might
use the Commerce Clause to completely obliterate the
Constitution's distinction between national and local authority
seems well founded. The reasoning that petitioners advance
seeks to follow the but‑for causal chain from the initial occurrence
of violent crime (the suppression of which has always been the
prime object of the States' police power) to every attenuated
effect upon interstate commerce. If accepted, petitioners'
reasoning would allow Congress to regulate any crime as long
as the nationwide, aggregated impact of that crime has
substantial effects on employment, production, transit,
or consumption.

Front 56

31. What did the Court conclude about the statute in Morrison?

Back 56

We accordingly reject the argument that Congress may regulate
noneconomic, violent criminal conduct based solely on that
conduct's aggregate effect on interstate commerce. The
Constitution requires a distinction between what is truly
national and what is truly local.
("The Constitution ... withhold[s] from Congress a plenary
police power"); ("[W]e always have rejected readings of the
Commerce Clause and the scope of federal power that would
permit Congress to exercise a police power")

Front 57

Did the Court in Morrison develop any framework for articulating the power of Congress under the Commerce Clause and the police power of the states?

Back 57

32. The issue manifesting from Lopez and Morrison is how far the
power of Congress to regulate under the Commerce Clause extends
vis a vie the Police Power of the states. The array of activities
that “substantially affects interstate commerce” is vast. That
criminal statutes substantially affect interstate commerce is arguable,
but such cannot be used the Court states to wipe out the distinction
between what is national(interstate) and subject to regulation
under the Commerce Clause and what is local(intrastate) and
subject to regulation under the Police Power of the states.
The Court is expressing concern about Federal Statutes on subjects
traditionally regulated by the states such as criminal activity and
family law including divorce, child welfare, wills and estates,
but has yet to question regulation of business activities.

Front 58

What was the statute in question in Raich? Was the statute state or federal? Was the statute criminal or civil? If the statute was Federal
what was the Constitutional basis?

Back 58

Federal Drug Enforcement Administration (DEA) agents seized and destroyed marijuana plants of plaintiffs Raich and Monson. Plaintiffs brought action seeking injunctive and declaratory relief prohibiting the enforcement of the Federal Controlled Substances Act (CSA), a statute with criminal provisions, to the extent it prevented them from possessing, obtaining, or manufacturing marijuana for their personal medical use as provided by California's Compassionate Use Act which authorizes limited marijuana use for medicinal purposes that had been approved by defendants doctors. The Constitutional basis for the Federal Statute intended to regulate supply and demand of controlled substances was the Commerce Clause as noted in the beginning of the majority opinion by Justice Stevens.

Front 59

34. Explain what precedent [if any] the Court considered in analyzing the CSA under the commerce clause.

Back 59

Wickard, is of particular relevance.
Wickard establishes that Congress can regulate purely intrastate activity that is not itself "commercial," if it concludes that failure to regulate that class of activity would undercut the regulation of the interstate market in that commodity.

Front 60

35. How did the Court explain the decisions in Lopez and Morrison where Federal statutes were found invalid under the Commerce Clause?

Back 60

[W]e held the statutes in Lopez and Morrison unconstitutional because they did not regulate economic activity. We concluded that "the noneconomic, criminal nature of the conduct at issue was central to our decision" in Lopez. Where economic activity substantially affects interstate commerce, legislation regulating that activity will be sustained.

Front 61

Explain how the Dissent viewed Lopez and Morrison.

Back 61

Dissenting: Justice O’Connor, The Chief Justice, Justice Thomas 36. The States' core police powers have always included authority to define criminal law and to protect the health, safety, and welfare of their citizens.
Exercising those powers, California has come to its own conclusion about the difficult and sensitive question of whether marijuana should be available to relieve severe pain and suffering. Today the Court sanctions an application of the federal Controlled Substances Act that without any proof that the personal cultivation, possession, and use of marijuana for medicinal purposes, if economic activity in the first place, has a substantial effect on interstate commerce and is therefore an appropriate subject of federal regulation. In so doing, the Court announces a rule that gives Congress a perverse incentive to legislate broadly pursuant to the Commerce Clause--nestling questionable assertions of its authority into comprehensive regulatory schemes--rather than with precision. That rule and the result it produces in this case are irreconcilable with our decisions in Lopez and Morrison,

Front 62

. Explain provisions of the Fifth Amendment applicable to private property

Back 62

37. The Fifth Amendment provides in part - [N]or shall private property be taken for public use without just compensation. Private property may be taken for public use by eminent domain.

Front 63

Explain how the Fifth Amendment is applicable to the states.

Back 63

38. The Fifth Amendment to the Constitution, made applicable to the States by the Fourteenth Amendment, provides that "private property [shall not] be taken for public use, without just compensation."

Front 64

Explain the taking that occurred in Kelo.

Back 64

The Kelo case decided in 2005 by the U S Supreme Court has resulted in controversy as to when the taking of private property is appropriate under the Fifth Amendment – specifically what constitutes public purpose.
Kelo - Stevens wrote opinion joined by Kennedy, Souter, Ginsburg, and Breyer,
39. The City of New London Conn approved a development plan to help revitalize the distressed city economy. A private nonprofit entity formed under state and local statutes was charged with acquiring the property necessary to implement the development plan with authority to use eminent domain as necessary to acquire property. Certain property owners challenged that the taking of their properties under the development plan was not for “public use” as required by the Fifth Amendment.

Front 65

What was the issue considered by the Court?

Back 65

 40.The U S Supreme Court stated “the disposition of this case therefore turns on the question whether the City's development plan serves a ‘public purpose’. Without exception, our cases have defined that concept broadly, reflecting our longstanding policy of deference to legislative judgments in this field.”

Front 66

Explain how the Court analyzed whether the taking served a public purpose.

Back 66

41. The Court cited precedents dating back to the 19th century holding that public use was not restricted to acquisitions that were to be open to and used by the public – for general public use.

Front 67

How did the Court respond to claims that public purpose might be too broadly defined?

Back 67

42. Petitioners contend that using eminent domain for economic development impermissibly blurs the boundary between public and private takings. Precedent exists where eminent domain found to serve a public purpose has benefited private parties.

Front 68

Explain the three categories of takings considered appropriate as noted by the Dissent

Back 68

43. Over two centuries ago, just after the Bill of Rights was ratified, Justice Chase wrote: "An act of the Legislature (for I cannot call it a law) contrary to the great first principles of the social compact, cannot be considered a rightful exercise of legislative authority 

Front 69

Explain the role of the courts advocated by the Dissent in determining whether a taking for private use serves a public purpose

Back 69

We give considerable deference to legislatures' determinations about what governmental activities will advantage the public. But were the political branches the sole arbiters of the public-private distinction, the Public Use Clause would amount to little more than hortatory fluff. An external, judicial check on how the public use requirement is interpreted, however limited, is necessary if this constraint on government power is to retain any meaning.

Front 70

Explain the objective of the First Amendment according to the Supreme Court.

Back 70

Early Supreme Court decisions stated the purpose of the drafters
of the First Amendment was to protect and provide free and open
political discussion to facilitate the democratic process.

Front 71

Explain how the First Amendment is applicable to the states.

Back 71

Although by its terms The First Amendment limits only Congress, the United States Supreme Court has held that the Fourteenth Amendment’s due process clause makes the freedom of speech provision operate to limit the authority of state and local governments as well.
[No state shall make any law which shall abridge privileges of
citizens. No state shall deprive any person of life, liberty or property
without due process of law] – from 14th

Front 72

Explain right of business to speak on political affairs under the First Amendment.

Back 72

47. The First Amendment and Business Speech on Political Affairs
Speech on public and political affairs by Business is protected under the First Amendment as declared by the U. S. Supreme Court in First National Bank of Boston v. Bellotti in 1978. However the Court has opened the door to limitations with a 1990 decision upholding a state law prohibiting corporations from using general corporate funds for independent expenditures in state political campaigns.

Front 73

Explain the right of business to promote products and services - engage in commercial speech under the First Amendment.

Back 73

Although commerce and advertising has played an important role
in our nation’s culture since its early days, it was not until the 1970’s that the United States Supreme Court extended First Amendment protection to commercial messages. Prior to that time regulation of commercial advertising by federal, state and local authorities was a fact of business existence.

Front 74

Explain the power of the states to regulate business.

Back 74

The power of states to regulate business is defined as police power - the inherent power to regulate for the health, safety and welfare of residents.

Front 75

. Explain whether the states and Congress can regulate the same activity noting what occurs(the concept) if a conflict exists between state and federal regulation.

Back 75

The states and the federal government can regulate the same subject matter so long as not in conflict with federal law, or state regulation does not discriminate or unduly burden interstate commerce. If a conflict exists the state statute is preempted - invalidated under the Supremacy Clause Art VI. State law should not offend the Bill or Rights or subject matters that Congress has determined should be reserved to it as well as the flow of interstate commerce

Front 76

Explain how the courts determine whether a conflict exists between federal and state regulation.

Back 76

States can regulate unless
(1)a federal enactment specifically prohibits
(2)a federal statute effectively occupies the entire subject matter in question thus leaving the states no room to regulate or national uniformity is necessary
(3) a statute discriminates against interstate commerce. - highway/rr

Front 77

State Discrimination prohibited by Title VII.

Back 77

Identify the Statute that prohibits discrimination in employment on the basis of race, color, national origin, religion or sex.

Title VII of the Civil Rights Act of 1964 also known as The Equal Employment Opportunity Act or The Fair Employment Practices Act proscribes discrimination by employers in hiring, firing, promotion, training programs, benefits or other aspects of employment on the basis or race, color, national origin, religion, or sex. Applicable to enterprises with 15 or more employees. The purpose is to provide equal economic opportunity.

Front 78

State Discrimination prohibited by Civil Rights Act of 1866.

Back 78

Today the courts will also allow racial and national origin employment discrimination claims to be filed under the Civil Rights Act of 1866 - Section 1981U.S.C. Plaintiffs can file directly in trial court without first filing with the EEOC as required for claims under Title VII. The Statute of Limitations is determined by the State where the claim is filed. Also, a greater array of remedies is also allowed than under Title VII. Punitive damages and attorney fees are available.

Front 79

Explain who administers Discrimination Acts.

Back 79

Identify the Federal Agency responsible for administering Discrimination Statutes.

The Equal Employment Opportunity Commission was created by the Civil Rights Act Title VII. The EEOC is charged with administering Equal Employment Opportunity Legislation and issues guidelines explaining Equal Employment Opportunity Legislation. The guidelines are interpretative. Interpretative rules/guidelines do not have the force of law and are not binding on the courts though the courts usually follow them.

Front 80

Explain where claims under the Civil Rights Act of 1866 are filed.

Back 80

Plaintiffs can file directly in trial court without first filing with the EEOC

Front 81

List governmental powers of the EEOC.

Back 81

The Equal Employment Opportunity Commission
The EEOC has legislative and executive power BUT
no judicial power
The EEOC exercises legislative power by issues guidelines explaining Equal Employment Opportunity Legislation.
The guidelines are interpretative.
Interpretative rules/guidelines do not have the
force of law and are not binding on the courts
though the courts usually follow them.
The EEOC exercises executive power by conducting investigations of alleged discrimination

Front 82

What classification of regulation/rules does the EEOC have authority to issue?

Back 82

3. Classification of Discrimination Claims
Discrimination Claims are Generally Classified by the Courts as Either
DISPARATE TREATMENT or DISPARATE IMPACT
Disparate Treatment is intentional discrimination that occurs
where an employer applies an employment policy such as
penalties for late arrival differently to employees in different
protected classes. A PROTECTED CLASS is a group named in a statute or regulations that may not be discriminated against.

Disparate Impact occurs where an employer has an employment
policy such as educational or experience requirements where the
policy adversely impacts a particular protected class(prevents them from employment). A PROTECTED CLASS is a group named in a statute or regulations that may not be discriminated against.

Front 83

Explain where Discrimination claims are initiated.

Back 83

Discrimination claims are filed with a state agency or the EEOC

Front 84

Explain what action the EEOC takes on claims filed.

Back 84

The State Agency or the EEOC will conduct an investigation

Front 85

Explain what occurs if the EEOC finds evidence of Discrimination

Back 85

if evidence of Discrimination is found the State Agency or EEOC will attempt Conciliation

Front 86

Explain the Right to Sue letter.

Back 86

Plaintiffs can obtain a Right to Sue Letter if:
EEOC cannot obtain conciliation
EEOC finds no evidence of discrimination
EEOC does not complete investigation within reasonable time

Front 87

Define Disparate Treatment.

Back 87

Disparate Treatment is intentional discrimination that occurs
where an employer applies an employment policy such as
penalties for late arrival differently to employees in different
protected classes. A PROTECTED CLASS is a group named in a statute or regulations that may not be discriminated against.

Front 88

Define Disparate Impact

Back 88

Disparate Impact occurs where an employer has an employment
policy such as educational or experience requirements where the
policy adversely impacts a particular protected class(prevents them from employment). A PROTECTED CLASS is a group named in a statute or regulations that may not be discriminated against.

Front 89

Define Protected Classes

Back 89

A PROTECTED CLASS is a group named in a statute or regulations that may not be discriminated against

Front 90

Explain when Disparate Treatment and Disparate Impact Discrimination claims may be filed in court noting what court.

Back 90

Right to Sue Letters are required before claims in trial court for Title VII claims including Harassment, Age Discrimination and Disability Discrimination.

Front 91

Explain what a Plaintiff first attempts to accomplish in court in above cases.

Back 91

Angela will attempt to establish a prima facie case.

A plaintiff establishes a prima facie case of disparate-treatment(intentional discrimination) by showing:

1. P is member of protected class(race, color, sex, age, disability,religion, national origin)

Protected class is a group named in a statute or regulations that may not be discriminated against.

2. P applied and was qualified for job in question

3. P was rejected for promotion by employer

4. Employer continued to promote persons with same or lesser qualifications than plaintiff or other evidence manifesting that actions of employer amounted to discrimination.

Front 92

Explain what occurs if Plaintiff successfully establishes their initial claims in court in above cases.

Back 92

Proof of above by credible(believable evidence) evidence will establish a prima facie case. Plaintiff establishing a prima facie case will win unless contradicted by defendant. ESTABLISHING PRIMA FACIE CASE SHIFTS BURDEN ON EVIDENCE TO DEFENDANT OF WHY FAILURE TO PROMOTE DID NOT AMOUNT TO DISCRIMINATION.

Front 93

Explain what defenses are available to the defendant in above cases.

Back 93

Proof of above by credible(believable evidence) evidence will establish a prima facie case. Plaintiff establishing a prima facie case will win unless contradicted by defendant. ESTABLISHING PRIMA FACIE CASE SHIFTS BURDEN ON EVIDENCE TO DEFENDANT OF WHY FAILURE TO PROMOTE DID NOT AMOUNT TO DISCRIMINATION.


BUSINESS NECESSITY - Business necessity is a court implemented defense allowed employers who can show a practice or job requisite is required for workers to perform a particular job. The defense is usually limited to Disparate Impact cases. Generally employers will be required to document for the defense to be allowed. For example weight lifting requirements will have to be proven necessary for doing a certain job or educational requirements will have to be proven necessary to perform a certain job function.

Job requisites such as physical requirements, educational requisites, or mechanical skills must be validated(shown necessary for job performance) by appropriate tests - CRITERION related validity(statistical relationship must exist between test scores and job performance), or CONTENT validity(measures ability to perform job in question) or CONSTRUCT validity(psychological traits required for successful job performance)






BFOQ - Bona Fide Occupational Qualification is a defense provided by statute that permits discrimination where sex, religion, or national origin is necessary because of circumstances such as a female model for womens clothes or a Japanese person for a Japanese part in a drama.



BONA FIDE SENIORITY SYSTEM - Seniority system that is fair, equitable and fully implemented by an employer

The courts have also held Employers can use subjective criteria for managerial positions so long as criteria are established and applied to all applicants for such positions.

Front 94

Explain how a Plaintiff can respond to an employer’s defense that is not correct.

Back 94

Plaintiff, Angela will claim Employer’s defense is a pretext. An employer defense is a pretext where employer’s response does not tell the whole story or is otherwise inaccurate or a coverup

Front 95

What remedies are available to a Plaintiff in a Disparate Treatment case?

Back 95

REMEDIES FOR DISPARATE TREATMENT DISCRIMINATION include legal and equitable remedies. Equitable remedies include injunctions prohibiting further violations and or orders to act including rehiring and payment of back wages and retroactive seniority. A firm may also be required to implement an affirmative action program where imbalance in workforce exists because of past discrimination. As of the Civil Rights Act of 1991 a plaintiff claiming intentional discrimination because of race, color, national origin, sex or religion can obtain a jury trial and plaintiff can recover actual/compensatory and punitive damages. Where intentional discrimination is based on race or color no cap on damages exists. However caps do exist on intentional discrimination based on national origin, sex or religion. Reasonable attorneys’ may also be recovered.

Front 96

Explain remedies available to a Plaintiff in a Disparate Impact case.

Back 96

Remedies by courts for DISPARATE IMPACT include injunctions prohibiting further violations and or orders to act including rehiring and payment of back wages and retroactive seniority as well as reasonable attorneys’ fees.

Front 97

Define Sexual Harassment.

Back 97

Sexual Harassment is a category of DISPARATE TREATMENT - INTENTIONAL discrimination set forth by EEOC guidelines that has been adopted by the courts. Sexual harassment occurs where manifestations regarding ones sex, create a hostile, intimidating or offensive environment.

Front 98

Define the two classifications of Sexual Harassment.

Back 98

Define the classifications of Sexual Harassment

(1) QUID PRO QUO HARASSMENT - something for something that occurs where a raise, promotion, or continued employment is conditioned upon sex or

(2) HOSTILE ENVIRONMENTAL HARASSMENT occurs where unwelcome sexual advances, requests for sexual favors, or other verbal or physical contact of sexual nature create an intimidating, hostile or offensive environment. In most cases such conduct must be repeated over period of time to constitute a violation

Front 99

Explain who promulgated Sexual Harassment guidelines.

Back 99

Plaintiffs should file with state agency or EEOC if no state agency exists within 180 days of alleged discriminatory act.

Front 100

Explain whether Sexual Harassment is classified as Disparate Treatment or Disparate Impact.

Back 100

Remedies by courts for DISPARATE Treatment include injunctions prohibiting further violations and or orders to act including rehiring and payment of back wages and retroactive seniority as well as reasonable attorneys’ fees. Basically everything

Front 101

Explain liability of an employer for Sexual Harassment claims where by a supervisor, by a co-worker or outsider.

Back 101

Employers are liable where Harassment is by a superior. Where harassment is by a co-worker or outsider, it must be shown that the employer knew or had reason to know of the harassment.

Front 102

Explain what employers should do to avoid Sexual Harassment claims.

Back 102

To minimize liability for sexual harassment, employers should implement an ongoing training program including oral and written presentations to create a corporate climate where harassment will be considered inappropriate.
Further mechanisms should be implemented for filing and processing complaints of sexual harassment with penalties for violations.

Front 103

Explain what groups have been held liable under Sexual Harassment guidelines.

Back 103

Employers and employees to some extent.

Front 104

List the components of the Americans with Disabilities Act - ADA

Back 104

Physical or Mental disabilities that limit life activities
Examples of Physical disabilities include deafness, blindness, HIV Infection,carpal tunnel syndrome…

Examples of Mental disabilities include bipolar disorder, mental retardation,major depression…

Front 105

Explain what “affects life’s activities” means.

Back 105

Examples of Life Activities include caring for oneself, learning,working,
sitting, walking…

Front 106

Explain the “duty to reasonably accommodate”

Back 106

Employers have a Duty to make reasonable accommodation

Up to the point it would create an undue hardship.
Hardship is determined by size and wealth of employer.

Front 107

Explain coverage of temporary disabilities AND disabilities that can be controlled or corrected under the ADA

Back 107

Act is generally not applicable.

Front 108

Where does a Plaintiff initiate an ADA claim?

Back 108

Plaintiffs should file with a state agency or the EEOC

Front 109

What action is taken following the filing of a claim?

Back 109

continuing as necessary to • EEOC/State agency will conduct an INVESTIGATION to determine if a violation exists.
• If evidence indicates probable violation, CONCILIATION will be attempted.

Front 110

Explain what occurs if evidence of discrimination is found.

Back 110

plaintiff can file in trial court.

Plaintiffs filing discrimination claims under The Americans With Disabilities Act can allege DISPARATE TREATMENT-INTENTIONAL DISCRIMINATION (employer applying policy differently to different persons - intentional is also defined as “conduct that was not accidental”) and or DISPARATE IMPACT (employer policy applied equally across the board to all persons where the policy adversely impacts a particular protected class. )

A plaintiff establishes a prima facie case of disparate-treatment(intentional discrimination) by showing:
1. P is member of protected class(race, color, sex, age, disability, religion, national origin)
Protected class is a group named in a statute or regulations that may not be discriminated against.
2. P applied and was qualified for job in question
3. P was rejected by employer
4. Employer continued to hire persons with same or lesser qualifications than plaintiff or other evidence manifesting that actions of employer amounted to discrimination.

Proof of above by credible(believable evidence) evidence will establish a prima facie case. Plaintiff establishing a prima facie case will win unless contradicted by defendant.
Establishing prima facie case shifts burden on evidence to defendant of why failure to promote did not amount to discrimination.

Front 111

When and where can a Plaintiff file an ADA case in court and where?

Back 111

/within 180 days of an alleged discriminatory act. Where the trial courts with state age
Generally with the EEOC

Front 112

Explain what type claims Plaintiff can make in an ADA case.

Back 112

Plaintiffs filing discrimination claims under The Americans With Disabilities Act can allege DISPARATE TREATMENT-INTENTIONAL DISCRIMINATION (employer applying policy differently to different persons - intentional is also defined as “conduct that was not accidental”) and or DISPARATE IMPACT (employer policy applied equally across the board to all persons where the policy adversely impacts a particular protected class. )

Front 113

What is the initial obligation of the Plaintiff in court?

Back 113

A plaintiff establishes a prima facie case of disparate-treatment(intentional discrimination) by showing:
1. P is member of protected class(race, color, sex, age, disability, religion, national origin)
Protected class is a group named in a statute or regulations that may not be discriminated against.
2. P applied and was qualified for job in question
3. P was rejected by employer
4. Employer continued to hire persons with same or lesser qualifications than plaintiff or other evidence manifesting that actions of employer amounted to discrimination.

Proof of above by credible(believable evidence) evidence will establish a prima facie case.

Front 114

What occurs if Plaintiff successfully meets their initial obligation in court?

Back 114

Plaintiff establishing a prima facie case will win unless contradicted by defendant.

Front 115

Explain the defenses available to an employer in an ADA case.

Back 115

Establishing prima facie case shifts burden on evidence to defendant of why failure to promote did not amount to discrimination.


Employer can claim disabilities render claimant unable to effectively perform
Employer can claim the disability presents a risk to herself or others
Employer can claim that a good faith effort was made to reasonably accommodate claimant. Actions that would amount to an undue hardship are not required. Whether undue hardship exists is a function of employer size and wealth.

Front 116

State remedies available to a Plaintiff in an ADA case.

Back 116

Remedies by courts include injunctions prohibiting further violations and or orders to act including rehiring and payment of back wages and retroactive seniority. As of the Civil Rights Act of 1991 a plaintiff claiming intentional discrimination can obtain a jury trial and plaintiff can recover actual and punitive damages. However caps do exist on amounts that may be recovered for intentional discrimination respecting persons with disabilities. Reasonable attorney fees may be recovered.

Front 117

List the elements of an Equal Pay Act claim.

Back 117

The Equal Pay Act of 1963 prohibits pay differentials by an employer between men and women who are performing jobs that require EQUAL SKILL, EFFORT AND RESPONSIBILITY UNDER SIMILAR WORKING CONDITIONS. Virtually any employer with employees is covered. (Equal Pay Act is an amendment to the Fair Labor Standards Act with provisions on minimum wages and overtime.) Job title is not controlling. Job titles of Janitor - Maintenance Engineer do not automatically signal authority for different pay. For example, an employer may designate females as Janitors and males as Maintenance Engineers where both perform the same duties. Effort refers to physical or mental exertion actually utilized; skills are those actually used on job; responsibility is that actually discharged on the job

Front 118

Explain where an Equal Pay Act claim may be initiated - two options.

Back 118

PLAINTIFF MAY FILE IN TRIAL COURT WITHOUT FIRST FILING WITH THE EEOC AND A JURY TRIAL MAY BE REQUESTED BY PLAINTIFFS. The statute of limitations for The Equal Pay Act is two years which is longer than under The Equal Employment Opportunity Act, Title VII. PLAINTIFF CAN CHOOSE TO BRING CLAIMS REGARDING EQUAL PAY AS SEX DISCRIMINATION CLAIMS UNDER THE EQUAL EMPLOYMENT OPPORTUNITY ACT, TITLE VII. In fact plaintiff can raise a broader array of sex discrimination issues under The Equal Employment Opportunity Act than under the Equal Pay Act.

Front 119

Explain defenses of an employer to Equal Pay Act claims.

Back 119

Differences in pay may be based on seniority, merit, and quality or quantity of production.

Front 120

State remedies available to a Plaintiff in an Equal Pay Act case.

Back 120

Remedies under the Equal Pay Act include back wages, and LIQUIDATED DAMAGES as well as reasonable attorney fees. (Damages are liquidated where an amount or means of determining is set and applied when a claim is made. LIQUIDATED DAMAGES under the Equal Pay Act are an amount equal to the back wage liability. Thus an award of liquidated damages would for example double the amount of back wages that the court awarded to Plaintiff. Employer will not be liable for liquidated damages if the employer can show he acted in good faith and with reasonable grounds for believing that its actions were lawful.)

Front 121

State where a Plaintiff may initiate an Age Discrimination claim.

Back 121

The Age Discrimination Act is enforced by the EEOC and plaintiff must file first with EEOC. Claims may be disparate treatment or disparate impact. Plaintiffs should file with state agency or EEOC if no state agency exists.

Front 122

Explain the age group applicability of the Age act.

Back 122

Age Discrimination Act 1967 is applicable to individuals 40 or over. The Act proscribes discrimination in hiring, firing, promotion, training programs, benefits or other aspects of employment of individuals 40 or over. Applicable to employers with 20 or more employees. If an employment decision respecting a person over 40 is motivated in part because of age, a claim may exist irrespective of whether the other person is older or younger than the 40 year old or older claimant.

Front 123

Explain defenses of an employer to an Age Act claim.

Back 123

EMPLOYER DEFENSES
BFOQ - AGE: Where employer can demonstrate that all or substantially all employees over a particular age are unable to safely and efficiently perform necessary tasks or that in would be impractical to make such a determination on an individual basis. For example an employer can require crane operators to retire at sixty.
BONA FIDE SENIORITY SYSTEM
FACTORS OTHER THAN AGE (For example education, experience, quantity or quality of performance)

Front 124

Explain remedies available in an Age Act case.

Back 124

Plaintiff is entitled to back wages and liquidated damages and or injunctive remedies including hiring, reinstatement or promotion plus reasonable attorney fees.

Front 125

Define the Employment at Will Doctrine.

Back 125

An employee at will is a person employed for no certain period of time. An employee at will can be fired at any time for no reason, good reason, or bad reason. Likewise an employee employed for no certain period can quit at any time. Employment at will is a common law doctrine.
Implied Covenant to Exercise Good Faith:
Some states have a rule providing employers have an implied covenant to exercise good faith and to deal fairly with employees. Where applicable, an unfairly discharged employee has action for breach of implied covenant of good faith and fair dealing.

Front 126

List the exceptions to the Employment at Will Doctrine.

Back 126

Statutory Exceptions:
(1) Firing for making compensation claims under federal statute(minimum wages, or overtime claims under Fair Labor Stds. Act.)
(2) Dismissals in violation of the civil rights act,
(3) Firing in retaliation for reporting OSHA violations,
(4) Firing for asserting claims under state workers compensation statutes,
(5) Firing in retaliation for asserting rights under whistle blower statutes(protects employees who publicly call attention to employer statutory violations)
Common law exceptions to employment at will doctrine:
Public policy violations: (1) Firing for refusing to commit illegal act
(2) Firing for exercising a statutory right (EX serving on juries, filing workers comp claims)
3)Firing for whistle blowing - objecting to or disclosing employer statutory violations to authorities
Note: Do not worry that certain exceptions appear on the statutory as well as the common law exception list. Some states have enacted statutory exceptions to the Employment at Will Doctrine while other states choose to rely on Common Law exceptions that have been created by state appellate courts.

Front 127

Explain how a typical Workers Compensation Statute works including when an employee is entitled to benefits and the role of negligence-fault

Back 127

All states have workers compensation statutes providing compensation for employees injured in the course of employment without regard to negligence - fault - whether of the employee or the employer. Employees obtaining workers compensation generally may not bring negligence claims against employers for injuries. Employers are not allowed negligence defenses. Course of employment does not include travel to and from work. However employees are covered during travel required by an employer from the time they depart home until their return.

Front 128

Explain whether employers have any defenses to Workers Compensation claims.

Back 128

All states have workers compensation statutes providing compensation for employees injured in the course of employment without regard to negligence - fault - whether of the employee or the employer. Employees obtaining workers compensation generally may not bring negligence claims against employers for injuries. Employers are not allowed negligence defenses. Course of employment does not include travel to and from work. However employees are covered during travel required by an employer from the time they depart home until their return.

Are workers who have made workers compensation claims
allowed to make negligence claims against employers and can employers utilize negligence defenses?

Employees making workers compensation claims cannot base recovery on negligence. Likewise employers are not allowed negligence defenses.

Front 129

Explain what is available to an employee under the Family and Medical Leave Act including eligibility, whether compensation paid during leave, whether former job must be offered on return.

Back 129

Employees making workers compensation claims cannot base recovery on negligence. Likewise employers are not allowed negligence defenses.

Up to 12 weeks during any 12 month period for employee or family
health problems or birth, adoption or foster care responsibilities.
Employers who have 50 or more employees covered.

What about pay during Leave?
Leave is without pay but medical benefits continue.
When is an employee eligible for leave time?
After one year of employment and 1250 hours
State the employers obligation to provide employment to an
employee returning from leave.
Employer is required to restore employee to same or equivalent
position with equivalent pay and benefits. Reinstatement is not
required for employees whose pay is within top 10 percent. Additional remedies include back wages and liquidated damages.

Front 130

State the purpose of Antitrust Statutes.

Back 130

The role of antitrust statutes in maintaining or creating economic order:
Competition is characterized by an economy relatively subject to market forces of supply and demand. Competition is thought to result in efficient allocation of resources leading to availability of goods and services at the lowest prices. The purpose of antitrust statutes including the Sherman Act, the Clayton Act and the Federal Trade Commission Act is to preserve or restore competition. Antitrust law attempts to assure that markets are relatively responsive to the forces of supply and demand - to limit power and the exercise of power in markets.

Front 131

Explain how competition can be beneficial.

Back 131

. Competition is thought to result in efficient allocation of resources leading to availability of goods and services at the lowest prices.

Front 132

Define Horizontal activities

Back 132

Business activities involve firms competing with one another. Such activities are classified as horizontal.

Front 133

Define Vertical activities

Back 133

. Business activities also involves firms at different levels in the chain of distribution dealing with one another such as manufacturers selling to wholesalers or retailers. Such activities are classified as vertical.

Front 134

State how Section I violations are classified.

Back 134

Sherman Section One provides that contracts, combinations and conspiracies that restrain trade are prohibited. Sherman Section One violations are characterized by the appellate courts as rule of reason and per se.
PER SE VIOLATIONS
Horizontal and Vertical
Per se violations are activities the courts have determined unreasonably restrain trade - activities that enable firms to exercise power to charge prices other than set by the market or to exclude competitors - activities that enable firms to interfere with market mechanism forces of supply and demand
Activities classified as per se violations
Horizontal Price Fixing occurs where competitors agreeing on price - maximum/minimum price - professional fee schedules - agreements relating to supply/demand

Horizontal Market Division occurs where competitors divide territories – c ustomer allocation - product lines

Joint Refusal to Deal occurs where several agree not to buy or sell to another or others
Today the courts are beginning to reexamine activities classified as per se and to judge such activities by the rule of reason in certain instances as occurred at the end of the 2006-2007 term with the court determining the per se violation of Vertical Price Fixing should be analyzed under the Rule of Reason. This is occurring where the court is persuaded that in certain instances activities may enhance market efficiency or may be necessary to the existence of an activity.

Front 135

Explain who is responsible for the above classifications

Back 135

Common Law and Written Enactment exist to
preserve competition.
Laws intended to preserve competition are defined as
Antitrust Law
Federal Antitrust Statutes include The Sherman Act,
the Clayton Act and the Federal Trade Commission Act

Front 136

List and define activities classified as per se violations as well as what a per se violation is.

Back 136

Per Se Violations are activities the courts have determined
unreasonably restrain trade.
Activities classified as Per Se Violations:
Horizontal price Fixing
occurs where competitors agree on prices
Vertical Price Fixing
occurs where parties at different levels in the chain of
distribution agree on prices for resale
Horizontal Market Division
occurs where competitors divide markets
Joint Refusal to Deal
occurs where competitors agree not to buy from or sell to another

Front 137

Define when Rule of Reason violations exist

Back 137

•The courts determine whether a rule of reason violation exists
by looking to factors including the purpose and economic
effect of the activities of the parties. If either are found to be
anticompetitive, a violation exists. Today the courts are
increasingly examining for rule of reason violations by
determining if the benefits of restraints outweigh the burdens
on the economic process. If the benefits outweigh the
burdens, no violation exists. This framework is sometimes
being applied to activities classified as per se violations

Front 138

Differentiate between proving a rule of reason violation and a per se violation

Back 138

Per Se only requires proving collusion amounting to a
particular violation such as Horizontal Price Fixing -
One Step
•Rule of Reason requires (1)proving collusion plus
(2)how the collusion unreasonably restrains trade
two steps

Front 139

Explain the Colgate Doctrine and why such does not amount to Vertical Price Fixing

Back 139

•9. Colgate Doctrine:
Allows Vertical Price Setting Without Liability for
Vertical Price Fixing
A seller instructs resellers such as retailers to sell
Goods at a certain price or prices. The seller explains
to the retailer that if he does not sell at the designated
price or prices, additional shipments will not occur.
Explain why such does not amount to Vertical Price Fixing.
The resellers/retailers do not promise to sell at the prices set.

Front 140

Explain nolo contendere and why a defendant charged with an antitrust violation would plead such.

Back 140

A PLEA OF NOLO CONTENDERE is a plea of no contest by a defendant to a criminal allegation under Sherman. A plea of nolo contendere accepted by a court is not an admission of guilt but sanctions may be imposed. A plea of nolo contendere cannot be used in a civil case to establish a prima facie case. If a defendant does not plead or is not allowed to plead nolo contendere in a criminal proceeding, and a trail occurs where defendant is found guilty of a Sherman Act violation, an individual/business harmed by defendant’s conduct can use such judgment to prove a Sherman Act civil violation

Front 141

Explain consent decree and why a defendant charged with an antitrust violation would plead such.

Back 141

A CONSENT DECREE is an injunction requested by a defendant in a civil action brought by the justice department under Sherman. A consent decree is not an admission of a violation but sanctions may be imposed. A consent decree cannot be used in a civil action by a party harmed by defendants conduct to establish a prima facie case.

Front 142

Explain what acceptance of a consent decree or nolo contendere by a court will mean for claims by parties harmed by defendant’s conduct against the defendant.

Back 142

It means that the defendant will willing coming up with the evidence against themselves and will not have the criminal law be involved with finding them fault.

Front 143

. Explain what Sherman Section 2 prohibits and how many are required for a violation.

Back 143

One or more. Sherman Section Two proscribes monopolization. Having a monopoly is not illegal. Monopolizing is illegal. Monopolizing occurs where one is exercising the power to control price or exclude competitors(exercising market power) in the relevant product and geographic market where evidence of intent to monopolize exists. Evidence of monopolizing may be determined by inquiring whether market power exists. Market power is determined by examining market share.

Front 144

Define monopolization. including how evidence of such is determined

Back 144

occurs where one or more are (1)exercising
market power to control price or exclude
competitors (2)in the relevant product and
geographic market (3)where evidence of intent to monopolize exists.

Front 145

Explain how it is determined whether market power exists.

Back 145

Market power is determined by analyzing
market share.

The courts have held a market share of 70
percent or more is evidence that market
power may exist.

Front 146

Explain how market share is analyzed to determine whether a Section Two violation exists.

Back 146

The courts will analyze the relevant product and geographic market, The relevant product market is the market share held by defendant. Market share can be determined by analyzing what occurs if defendant raises prices. Are substitutes available to customers so that sales will decrease as price is increased or will customers be forced to pay more or consume less. Where substitutes exist they must be included in calculating market share. Substitutes will reduce market share.
Defining Relevant Geographic Market
The relevant geographic market is where the parties are competing. Geographic markets are usually classified as local, regional or national. If a firm that sells nationally is allegedly engaging in monopolistic activities to deter a local competitor, whether monopolization is occurring will be determined by examining relevant market shares in the local market.

power may exist.

Front 147

Explain relevant product market and how such is determined. (See Slides for Definition)

Back 147

The courts examine how a firm with 70
percent or more market share acquired its
market share and how it responds to
existing and or potential competition. Has
the firm acquired and is it maintaining or
increasing market share by adjusting prices
or product announcements to the detriment
of others? If so evidence of market power
exists.

Front 148

Define relevant geographic market and how such is determined.

Back 148

Remember monopolizing requires
exercising power in the relevant product
and geographic markets.

Front 149

Explain the two types of predatory conduct and when an inquiry is made as to whether such exists.

Back 149

Predatory conduct exists where a firm
engages in activities intended to harm
another firm. Predatory pricing and
nonprice predation are examples

Front 150

Define predatory pricing.

Back 150

Predatory pricing occurs where a firm sells
at prices below cost - average variable cost.

Front 151

Define non price predation.

Back 151

7. Non price predation occurs where a firm
attempts to increase the costs of doing
business or increase entry barriers for
competitors.
Nonprice predation occurs where a firm acts to increase the costs of competitors or to increase entry barriers. Examples include:
(1) tying up customers with long-term contracts that are not justified by cost savings so that it is much more difficult for existing and potential competitors to engage in a fair contest for those customers
(2)taking away key employees from a smaller competitor
(3)falsely disparaging the products of smaller competitors
(4)forcing smaller firms into completely unjustified lawsuits and administrative proceedings because the costs of such proceeding hurt the smaller firms more than a dominant firm
(5)sabotage

Front 152

List defenses to monopolization.

Back 152

Patent
Market will only support one entity
Superior management

Front 153

Explain who can bring civil action under the Sherman Act.

Back 153

Civil and Criminal claims under Sherman Section One and Sherman Section Two.
Civil action under Sherman
Individuals, business and the Department of Justice can bring civil action. Individuals and business can obtain treble damages. The Justice Department can obtain injunctions to redress violations including divestment, divorcement and dissolution.
Criminal action under Sherman
Only the Justice Department can bring criminal action. Violations of Sherman amount to felonies with fines of up to $350,000 for individuals and three years in prison or both and penalties of up to 10 million can be imposed against business.

Front 154

Explain civil liability under the Sherman Act including treble damages

Back 154

Individuals, business and the Department of Justice can bring civil action. Individuals and business can obtain treble damages. The Justice Department can obtain injunctions to redress violations including divestment, divorcement and dissolution.
Criminal action under Sherman

Front 155

Explain Criminal Liability under Sherman including who can bring claims.

Back 155

Only the Justice Department can bring criminal action. Violations of Sherman amount to felonies with fines of up to $350,000 for individuals and three years in prison or both and penalties of up to 10 million can be imposed against business

Front 156

Define the provisions of FTC Section Five.

Back 156

Section 5 of the Federal Trade Commission Act (1914) prohibits unfair methods of competition.
Section 5 is an open ended provision that includes violations of Sherman Section One and Two as well as the Clayton Act. Any claim that can be brought under Sherman Section One or Section Two or any Section of Clayton may be brought under FTC Section 5 by the FTC as a civil claim. Further, activities not covered by Sherman or Clayton that the FTC finds anticompetitive may be confronted under FTC Section 5. Section 5 enables the FTC to confront anticompetitive activities without having to wait for specific legislative designation. (Note individuals or business cannot bring action under FTC Section 5 - they must wait for Congress or the courts to identify anticompetitive activities).

Front 157

Explain who can bring claims under FTC Section Five.

Back 157

Section 5 enables the FTC to confront anticompetitive activities without having to wait for specific legislative designation. (Note individuals or business cannot bring action under FTC Section 5 - they must wait for Congress or the courts to identify anticompetitive activities).

Front 158

Define Price Discrimination.

Back 158

Price discrimination occurs where firms sell goods of like grade and quality at different prices to different buyers OR different quantities at different prices to buyers. The Clayton Act Section 2 prohibits Price Discrimination where the effect may substantially lessen competition. Price Discrimination under Clayton Section 2 includes Primary and Secondary Line Discrimination

Front 159

Define Primary Line Price Discrimination under Clayton Section Two including when liability exists.

Back 159

Primary line discrimination occurs where a firm sells goods of like grade and quality at different prices to different buyers(resellers) in different markets. Such activities are proscribed by the Clayton Act Section 2 where the effect may substantially lessen competition.
Firms engage in primary line discrimination - selling to different customers at different prices to reduce competition and increase market power - power to control price.
Example
Alpha, a fruit juice producer, markets orange juice in California, Nevada and Arizona for $10 per case to retailers. Beta, a fruit juice producer, markets orange juice in Texas, New Mexico and Oklahoma for $9.50 per case to retailers. Alpha decides to enter the Texas market and begins offering orange juice at $9.00 per case to retailers in Texas. Alpha continues to offer at $10 in other markets. Beta begins to lose customers in Texas to Alpha. Explain when Alpha might be liable.

Front 160

Define Secondary Line Price Discrimination under Clayton Section Two including when liability exists.

Back 160

Secondary line price discrimination occurs where a seller sells different quantities at different prices to available to all buyers(resellers). Under the Robinson-Patman Act(Amendment to the Clayton Act Section 2) quantities may be sold at different prices so long as the largest quantities will be purchased by substantially all customers(resellers). The FTC monitors. (Not applicable to sales from retailers to consumers).
Selling different quantities at different prices was originally encouraged by large customers(resellers) demanding price breaks for large purchases. The purpose is to protect small business from having to pay higher prices for goods than larger firms.
Example
Harpers, a fruit juice supplier offers the following price list to retailers.
50 cases at $1
40 cases at 1.25
30 cases at 1.50
20 cases at 1.75
Pinto, a food products retailer, sales only justify buying 20 cases per order. As a result, Pinto cannot compete with large supermarkets that buy as many as 50 cases and sell juice to retail Customers at lower prices than Pinto. What would be required for Pinto to hold Harpers liable?

Front 161

List defenses to Price Discrimination.

Back 161

(1)Cost justification reflecting differences in costs of manufacture, sale, or delivery
(2)Meeting competition - a seller can meet the price of a competing seller in a particular market without changing prices in other markets or can charge different prices in different geographic markets prices to reflect different prevailing market prices.(defense applicable only where meet but do not go below competition).
(3)Changing conditions - can charge different prices where perishable or seasonable goods in question
Example
Would any legal consequences result from the Beta Example in Problem 13 lowering prices in Texas to meet Alpha's prices?
Beta should be allowed to lower prices in Texas to meet the price of Alpha the Meeting Competition Defense.

Front 162

Explain when liability will exist for fees or payments made in conjunction with sales of goods.

Back 162

Clayton Act Section 2 also prohibits fees or payments by sellers to buyers except for services actually rendered. (For example a seller may not pay a buyer a kickback for purchasing goods from seller.)

Front 163

Explain when liability will exist for payments for advertising or promotions in conjunction with sales of goods.

Back 163

In addition payments for advertising/promotions or promotional services are not allowed unless made available to all buyers on a proportional basis. (For example seller cannot provide displays, demonstrations, or payments for shelf space unless made available to all buyers.) Sellers will be liable for the activities noted in Problem 16. Liability is not limited to where effect might be to lessen competition.

Front 164

. Explain tying as defined by Clayton Act Section Three and when liability exists.

Back 164

A seller promoting tying transactions is trying to increase sales and market share. Such is positive and a part of the competitive process. A problem exists if a firm acquires and uses market power to prevent others from competing.
Violations are usually found where the seller has substantial market power in the tying market.
EXAMPLE: Seller develops a new cancer drug and obtains a patent. Seller requires those desiring to purchase the new cancer drug to also purchase vitamins A and D. Seller is using the tying product - the new cancer drug - to increase market share in vitamins.

Front 165

Explain exclusive dealing arrangements and when liability will exist under Clayton Act Section Three.

Back 165

Exclusive Dealing Arrangements occur a where seller obtains a commitment from a buyer/s that they will purchase - deal only with seller for a defined period of time. Such effectively “freezes out” sellers competitors. Exclusive Dealing Arrangements will amount to a violation where the effect may be to substantially lessen competition.

Front 166

Explain liability for violations of the Clayton Act.

Back 166

The Clayton Act Section 7 prohibits
mergers where the effect of such may be to
substantially lessen competition. Mergers
are classified as Horizontal, Vertical or
Conglomerate.

Front 167

Explain who can bring claims under FTC Section Five.

Back 167

Section 5 enables the FTC to confront anticompetitive activities without having to wait for specific legislative designation. (Note individuals or business cannot bring action under FTC Section 5 - they must wait for Congress or the courts to identify anticompetitive activities).

Front 168

Define Price Discrimination.

Back 168

Price discrimination occurs where firms sell goods of like grade and quality at different prices to different buyers OR different quantities at different prices to buyers. The Clayton Act Section 2 prohibits Price Discrimination where the effect may substantially lessen competition. Price Discrimination under Clayton Section 2 includes Primary and Secondary Line Discrimination

Front 169

Define Primary Line Price Discrimination under Clayton Section Two including when liability exists.

Back 169

Primary line discrimination occurs where a firm sells goods of like grade and quality at different prices to different buyers(resellers) in different markets. Such activities are proscribed by the Clayton Act Section 2 where the effect may substantially lessen competition.
Firms engage in primary line discrimination - selling to different customers at different prices to reduce competition and increase market power - power to control price.
Example
Alpha, a fruit juice producer, markets orange juice in California, Nevada and Arizona for $10 per case to retailers. Beta, a fruit juice producer, markets orange juice in Texas, New Mexico and Oklahoma for $9.50 per case to retailers. Alpha decides to enter the Texas market and begins offering orange juice at $9.00 per case to retailers in Texas. Alpha continues to offer at $10 in other markets. Beta begins to lose customers in Texas to Alpha. Explain when Alpha might be liable.

Front 170

Define Secondary Line Price Discrimination under Clayton Section Two including when liability exists.

Back 170

Secondary line price discrimination occurs where a seller sells different quantities at different prices to available to all buyers(resellers). Under the Robinson-Patman Act(Amendment to the Clayton Act Section 2) quantities may be sold at different prices so long as the largest quantities will be purchased by substantially all customers(resellers). The FTC monitors. (Not applicable to sales from retailers to consumers).
Selling different quantities at different prices was originally encouraged by large customers(resellers) demanding price breaks for large purchases. The purpose is to protect small business from having to pay higher prices for goods than larger firms.
Example
Harpers, a fruit juice supplier offers the following price list to retailers.
50 cases at $1
40 cases at 1.25
30 cases at 1.50
20 cases at 1.75
Pinto, a food products retailer, sales only justify buying 20 cases per order. As a result, Pinto cannot compete with large supermarkets that buy as many as 50 cases and sell juice to retail Customers at lower prices than Pinto. What would be required for Pinto to hold Harpers liable?

Front 171

List defenses to Price Discrimination.

Back 171

(1)Cost justification reflecting differences in costs of manufacture, sale, or delivery
(2)Meeting competition - a seller can meet the price of a competing seller in a particular market without changing prices in other markets or can charge different prices in different geographic markets prices to reflect different prevailing market prices.(defense applicable only where meet but do not go below competition).
(3)Changing conditions - can charge different prices where perishable or seasonable goods in question
Example
Would any legal consequences result from the Beta Example in Problem 13 lowering prices in Texas to meet Alpha's prices?
Beta should be allowed to lower prices in Texas to meet the price of Alpha the Meeting Competition Defense.

Front 172

Explain when liability will exist for fees or payments made in conjunction with sales of goods.

Back 172

Clayton Act Section 2 also prohibits fees or payments by sellers to buyers except for services actually rendered. (For example a seller may not pay a buyer a kickback for purchasing goods from seller.)

Front 173

Explain when liability will exist for payments for advertising or promotions in conjunction with sales of goods.

Back 173

In addition payments for advertising/promotions or promotional services are not allowed unless made available to all buyers on a proportional basis. (For example seller cannot provide displays, demonstrations, or payments for shelf space unless made available to all buyers.) Sellers will be liable for the activities noted in Problem 16. Liability is not limited to where effect might be to lessen competition.

Front 174

. Explain tying as defined by Clayton Act Section Three and when liability exists.

Back 174

A seller promoting tying transactions is trying to increase sales and market share. Such is positive and a part of the competitive process. A problem exists if a firm acquires and uses market power to prevent others from competing.
Violations are usually found where the seller has substantial market power in the tying market.
EXAMPLE: Seller develops a new cancer drug and obtains a patent. Seller requires those desiring to purchase the new cancer drug to also purchase vitamins A and D. Seller is using the tying product - the new cancer drug - to increase market share in vitamins.

Front 175

Explain exclusive dealing arrangements and when liability will exist under Clayton Act Section Three.

Back 175

Exclusive Dealing Arrangements occur a where seller obtains a commitment from a buyer/s that they will purchase - deal only with seller for a defined period of time. Such effectively “freezes out” sellers competitors. Exclusive Dealing Arrangements will amount to a violation where the effect may be to substantially lessen competition.

Front 176

Explain liability for violations of the Clayton Act.

Back 176

The Clayton Act Section 7 prohibits
mergers where the effect of such may be to
substantially lessen competition. Mergers
are classified as Horizontal, Vertical or
Conglomerate.

Front 177

Define Horizontal Mergers

Back 177

Horizontal mergers occur where firms are competitors.

Front 178

Define Vertical Mergers

Back 178

Vertical mergers occur where firms at different levels of the distribution chain merge.

Front 179

Define conglomerate mergers

Back 179

The combining of non related firms is defined as conglomerate

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