Define and Discuss the functions and role of law in business and society.

Resource: Resource: Case Brief Cipollone v. Liggett Group, Inc., et al. in Ch. 2, section 2-6, “Commerce Powers,” of the text.

Write a 700- to 1,050-word paper in which you define the functions and role of law in business and society. Discuss the functions and role of law in your past or present job or industry. Properly cite at least two references from your reading.

Format your paper consistent with APA guidelines.

Click the Assignment Files tab to submit your assignment.

Format your paper consistent with APA guidelines.

Click the Assignment Files tab to submit your assignment.

Resource: Case Brief Cipollone v. Liggett Group, Inc., et al. in Ch. 2, section 2-6, “Commerce Powers,” of the text.

Format your paper consistent with APA guidelines.

Click the Assignment Files tab to submit your assignment.

CASE 2.1 Cipollone v. Liggett Group, Inc., et al., 505 U.S. 504 (1992)

FACT SUMMARY Cipollone brought suit against

Liggett for violation of several New Jersey consumer

protection statutes alleging that Liggett (and other

cigarette manufacturers) were liable for his mother’s

death because they engaged in a course of conduct

including false advertising, fraudulently misrepresenting

the hazards of smoking, and conspiracy to deprive

the public of medical and scientific information about

smoking. Liggett urged the court to dismiss the state

law claims contending that the claims related to the

manufacturer’s advertising and promotional activities

were preempted by twCASE 2.1 Cipollone v. Liggett Group, Inc., et al., 505 U.S. 504 (1992)

FACT SUMMARY Cipollone brought suit against

Liggett for violation of several New Jersey consumer

protection statutes alleging that Liggett (and other

cigarette manufacturers) were liable for his mother’s

death because they engaged in a course of conduct

including false advertising, fraudulently misrepresenting

the hazards of smoking, and conspiracy to deprive

the public of medical and scientific information about

smoking. Liggett urged the court to dismiss the state

law claims contending that the claims related to the

manufacturer’s advertising and promotional activities

were preempted by two federal laws: (1) the Federal

Cigarette Labeling and Advertising Act of 1965, and

(2) the Public Health Cigarette Smoking Act of 1969.

SYNOPSIS OF DECISION AND OPINION The

U.S. Supreme Court ruled against Cipollone, holding

that his claims relying on state law were preempted by

federal law. The Court cited both the text of the statute

and the legislative history in concluding that Congress’s

intent in enactment of the laws was to preempt

state laws regulating the advertising and promotion of

tobacco products. Because Congress chose specifically

to regulate a certain type of advertising (tobacco), federal

law is supreme to any state law that attempts to

regulate that same category of advertising.

WORDS OF THE COURT: Preemption “Article VI of

the Constitution provides that the laws of the United

States shall be the supreme Law of the Land. Thus,

[. . .] it has been settled that state law that conflicts

with federal law is ‘without effect.’ [. . .] Accordingly,

‘the purpose of Congress is the ultimate touchstone’

of pre-emption analysis. Congress’s intent may be

‘explicitly stated in the statute’s language or implicitly

contained in its structure and purpose.’ In the absence

of an express congressional command, state law is

preempted if that law actually conflicts with federal

law, [. . .], or if federal law so thoroughly occupies a

legislative field ‘as to make reasonable the inference

that Congress left no room for the States to supplement

it.’ [. . .] [Cipollone’s] claims are preempted to

the extent that they rely on a state-law ‘requirement

or prohibition . . . with respect to . . . advertising or

promotion.’ ”

Case Questions

1. Given the Supreme Court’s language and the result

of this case, is Congress’s preemption power broad

or narrow? Explain your answer.

2. Does the Supreme Court’s ruling bar all residents of

New Jersey, or any other state, from bringing suit

against a tobacco company for false advertising or

promotion? Why or why not?

3. Why would Congress want to preempt state law

regarding the advertising and promotion of tobacco

products? Do you agree with their decision to do

so? Why or why not?

34 UNIT ONE | Fundamentals of the Legal Environment of Business

interstate commerce. In Gonzalez v. Raich, 7 the Court ruled that Congress had the power

to criminalize the possession of marijuana even if it was noncommercially cultivated and

consumed by medical prescription all in the same state. The case involved a challenge by

two California residents to the enforcement by federal officials of the federal Controlled

Substances Act after California passed a state law via voter ballot proposition to exempt

anyone involved in the cultivating, prescribing, and consuming marijuana for medical purposes

from prosecution. The plaintiffs were each arrested by federal officials for possession

of marijuana that had been grown at home. Each had a prescription from a licensed

physician. In refusing to invalidate the Controlled Substances Act, the Court noted that

Congress could have rationally believed that the noncommercially grown marijuana would

be drawn into the interstate market and, therefore, the banning of the substance was sufficiently

related to interstate commercial activity.

Civil Rights Legislation A key use of the federal commerce power has been in the

area of civil rights legislation. Indeed, the Supreme Court’s level of deference for use of

congressional commerce powers reached its peak during and directly after the civil rights

era. In the 1964 Civil Rights Act, Congress used its commerce power to ban discrimination

in places of public accommodation such as restaurants and hotels. In two important

civil rights cases decided by the U.S. Supreme Court, the Court ruled that the Civil Rights

Act was a permissible application of Congress’s commerce powers. In Heart of Atlanta

Motel v. U.S., 8 the Court made clear that a federal ban on racial discrimination was a constitutionally

permitted use of congressional commerce powers because the hotel was open

Legal Speak >))

Ballot proposition A

question put to the

voters during a state

election to decide

(usually controversial)

issues such as

imposing a new

income tax or whether

the state should

allow marijuana to be

used for medicinal

purposes. In some

states, this is known as

a ballot initiative or a

referendum.

7545 U.S. 1 (2005).

8379 U.S. 241 (1964).

President Johnson, seen here with Dr. Martin Luther King, Jr., signed the Civil Rights Act

in 1964.

CHAPTER TWO | Business and the Constitution 35

to interstate travelers. Additionally, the Court deferred to a congressional finding of fact

that racial discrimination in accommodations discouraged travel by limiting a substantial

portion of the black community’s ability to find suitable lodging. In a companion case, 9

Katzenbach v. McClung, 10 the Court held that a local restaurant that was located far from

any interstate highway, and with no appreciable business from interstate travelers, was

nevertheless subject to the reach of the federal statute because the restaurant purchased

some food and paper supplies from out-of-state vendors. Since these purchases were of

items that had moved in commerce, Congress could properly exercise their power to regulate

a restaurant whose business interests were primarily local.

Noncommercial Activity In 1995, the U.S. Supreme Court signaled that some limits

on Congress’s commerce power still exist. In cases where the activity is purely noncommercial

(such as when Congress passes a criminal statute that is seemingly unrelated to

commerce), the Court has used increased levels of scrutiny to be

sure that the activity that Congress seeks to regulate has a sufficient

nexus (connection) to some legitimate economic interest. In U.S.

v. Lopez, 11 the Court invalidated a federal statute on the basis that

it was beyond Congress’s commerce powers. In Lopez, the Court

struck down the Gun-Free School Zones Act of 1990, which made

it a federal crime to possess a gun within a certain distance from

a school. The Court rejected the government’s argument that gun

possession in schools affected economic productivity (by making it more difficult for students

to obtain an education) and thus was within the purview of congressional commerce

power. The Court held that such a broad interpretation of the commerce power would mean

that congressional power was virtually unlimited, and that such an expansive authority was

directly contrary to the express limits imposed by the Constitution. The court reasoned that

the banning of firearms in local schools was a government police power and, therefore,

more appropriately handled by the state government. Five years later, in U.S. v. Morrison,

the Court invalidated another statute on the same grounds. In that case, the Court struck

down the Violence Against Women Act, which gave victims of gender-motivated violence

the right to sue their attacker for money damages in a federal court. In light of the Lopez

decision, Congress made exhaustive findings of fact that detailed the cumulative economic

affect of gender-motivated crimes. Nonetheless, the Court held that the congressional findings

were too broad to justify use of the commerce power and that virtually any local crime

could become a federal offense under a similar justification. As a general rule, the further

that Congress strays from regulating commercial activity, the more likely the Court will be

to give the law intense constitutional scrutiny.

Constitutional Restrictions on State Regulation of Commerce

The U.S. Supreme Court has ruled that the mere existence of congressional commerce

powers restricts the states from discriminating against or unduly burdening interstate commerce.

States often wish to regulate commerce that

crosses into their state borders. States are free to

regulate commerce so long as (1) it does not impose

a discriminatory law (such as a tax) on out-of-state

businesses, and (2) the state law is a legitimate effort

to regulate health, safety, and welfare. For example,

suppose that in order to protect its own economic

LO2-7

KEY POINT

Congress’s broadest powers are derived

from the Commerce Clause. Courts are

highly deferential to congressional action in

areas that affect interstate commerce.

webcheck www.mhhe.com/melvin

Visit this textbook’s Web site for additional information

and case summaries related to constitutional limitations on

a state’s imposing a tax on out-of-state vendors (including

Internet vendors).

9 Two cases that have similar issues where the Court publishes its opinion at the same time.

10379 U.S. 294 (1964).

11514 U.S. 549 (1995).

36 UNIT ONE | Fundamentals of the Legal Environment of Business

interests, the Idaho state legislature imposes an inspection requirement and fee on all non-

Idaho grown potatoes sold within Idaho state borders. The state legislature justifies this

process and fee on the basis that it is protecting its citizens from rotten potatoes. A court

would likely strike down the law because it discriminates against out-of-state producers,

and its explanation could be seen as a pretext (not the actual reason) since the law presumes

that in-state potatoes are safe. Moreover, the inspection fee and the inspection process

itself could be viewed as unreasonably burdening interstate commerce.

In Case 2.2, a federal appellate court considers whether a state law infringes on congressional

rights to regulate interstate commerce.o federal laws: (1) the Federal