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Solution and Answer Guide
Miller, Business Law Today, The Essentials Text & Summarized Cases 13e,
9780357635346;Chapter 01: Legal and Constitutional Foundations of Business
SC
Table of Contents
Critical Thinking Questions in Features......................................................................................................... 1
Adapting the Law to the Online Environment .......................................................................................... 1
Critical Thinking Questions in Cases.............................................................................................................. 2
Case 1.1 ..................................................................................................................................................... 2
O
Case 1.2 ..................................................................................................................................................... 3
Case 1.3 ..................................................................................................................................................... 3
Chapter Review ............................................................................................................................................. 4
R
Practice and Review .................................................................................................................................. 4
Practice and Review: Debate This ............................................................................................................. 5
Issue Spotters ............................................................................................................................................ 5
EG
Business Scenarios and Case Problems..................................................................................................... 5
Critical Thinking and Writing Assignments ............................................................................................. 10
Critical Thinking Questions in Appendix Exhibit 1A–3 ................................................................................ 11
Exhibit 1A–3 ............................................................................................................................................ 11
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Critical Thinking Questions in Features
Adapting the Law to the Online Environment
ID
1. One observer has said that the American legal system should evaluate social media companies based on
how ―they affect us as citizens, not only [on how] they affect us as consumers.‖ What is your opinion of
this statement?
Solution
The person who made this statement clearly sees a ―citizen‖ as having different motivations and concerns
ES
than a ―consumer.‖ Presumably, a citizen is mostly concerned with the good of society as a whole, and
therefore would be open to the idea of government regulation that restricted thenegative influence of
social media, regardless of the First Amendment. A consumer, by contrast, would be primarily concerned
with having a marketplace that offers the widest possible varieties of freedom (of choice, of speech, etc.)
and would for that reason be opposed to government regulation of social media. There is, however, an
argument to be made that the citizens that make up a society benefit when the marketplace of ideas—
whether they are subjectively
―positive‖ or ―negative‖—is allowed to flourish in the absence of government regulation.
2. Tim Cook, Apple‘s chief operating officer, has suggested that the United States Congress shouldpass a
law limiting the ability of Apple and other tech countries to keep consumer data private. Why would a
business executive make such a request?
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Solution
Cook may have wanted to end a controversy that puts Apple squarely at odds with the federal
government. After all, large companies such as Apple rely on favorable treatment from the government
in regulatory matters, international trade agreements, and many other areas. Also, large corporations
such as Apple sometimes gain an advantage over competitors when their industries are regulated. For
example, Apple has significant resources with which to lobby Congress for favorable treatment, and it is
better positioned to bear the costs of regulation thanare other, smaller tech companies. Finally, Apple‘s
position as a champion of consumer privacy would be damaged if it ―caved‖ and changed its stance
SC
without being forced to do so by a new federal law.
Critical Thinking Questions in Cases
Case 1.1
1. What ―dangerous conditions‖ might have prompted the city to enact the ordinances at issue in this
case? Why?
O
Solution
As noted in the facts of the case, both ordinances at issue included an extensive rationale fortheir
adoption, stating essentially that a geographically small city has the right to restrict a
business from operating within the city when the restriction is for the safety of the city‘s citizensand
visitors.
R
The appellate court referred to ―the dangerous conditions‖ created by the irresponsible driving behavior of
scooter renters, especially at night, amplified by the lack of training, supervision, and oversight practiced
by the rental scooter businesses that ―existed throughout the entire city‖ as the basis for the city‘s
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regulation. The court paraphrased the expressive clauses in the ordinancesmore specifically:
• The City is geographically small and crowded and is being besieged by inexperienced scooter drivers
seeking amusement and driving in a dangerous manner.
• The City is a tourist destination frequented by tens of thousands, and its streets are congested by
scooters that are being driven illegally and in areas where they are not permitted.
• The City‘s residents and visitors are put in dangerous situations as a result of the improper use of
scooters, especially at night.
U
• City businesses have complained about numerous trespasses on their property by people driving
scooters while being disruptive
• City police have been unable to cope with the situation and essential police resources are being
drained.
ID
• The City has been unable to control the situation through less restrictive means.
ES
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2. What is the likely economic impact of the ordinances on the businesses in the city? Discuss.
Solution
With the exception of the scooter rental businesses, the effect on the city‘s economy is likely tobe
positive in light of the result in the Classy case.
The answer to the previous question contains the reasons in support of this outlook. With a banon
motorized scooters, the ―small and crowded‖ city is not likely to be ―besieged by inexperienced scooter
drivers seeking amusement and driving in a dangerous manner.‖ The streets, filled with ―tens of
SC
thousands‖ of tourists will not be ―congested by scooters that are
being driven illegally and in areas where they are not permitted.‖ Residents and visitors will not be ―put
in dangerous situations as a result of the improper use of scooters, especially at night.‖ There will be an
end to the ―numerous trespasses‖ on business property ―by people driving
scooters while being disruptive.‖ And ―essential police resources‖ will not be ―drained,‖ at least not by
irresponsible scooter drivers and riders. All of which bodes well for business.
O
Case 1.2
1. If this case had involved a small, private retail business that did not advertise nationally, wouldthe result
have been the same? Why or why not?
Solution
R
It is not likely that the result in this case would have been different even if the facts had involveda small,
private retail business that did not advertise nationally. The intended impact of the decision in Heart of
Atlanta was to uphold the constitutionality of the Civil Rights Act of 1964 andthe power of Congress to
regulate interstate commerce to stop local discriminatory practices. In the Supreme Court‘s opinion, ―The
EG
power of Congress to promote interstate commerce also includes the power to regulate the local
incidents thereof, including local activities in both the States of origin and destination, which might have a
substantial and harmful effect upon that
commerce.‖
Thus, if the case had involved a small, local retail business, the Court would have found participation in
interstate commerce based on the use of a phone, or a Facebook page (or otherWeb presence), or sales to
customers who traveled across state lines—or, as in Wickard v.
U
Filburn, participation might have been based on any transaction that might otherwise have
occurred in interstate commerce.
Case 1.3
ID
1. Whose interests are advanced by the banning of certain types of advertising?
Solution
The government‘s interests are advanced when certain ads are banned. For example, in the BadFrog case,
the court acknowledged, by advising the state to restrict the locations where certain ads could be
ES
displayed, that banning of ―vulgar and profane‖ advertising from children‘s sight arguably advanced the
state‘s interest in protecting children from those ads.
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2. If Bad Frog had sought to use the offensive label to market toys instead of beer, would thecourt‘s
ruling likely have been the same? Explain your answer.
Solution
Probably not. The reasoning underlying the court‘s decision in the case was, in part, that ―the State‘s
prohibition of the labels . . . does not materially advance its asserted interests in insulating children from
vulgarity . . . and is not narrowly tailored to the interest concerning
children.‖ The court‘s reasoning was supported in part by the fact that children cannot buy beer.If the
labels advertised toys, however, the court‘s reasoning might have been different.
SC
Chapter Review
Practice and Review
A state legislature enacted a statute that required any motorcycle operator or passenger on the state‘s
highways to wear a protective helmet. Jim Alderman, a licensed motorcycle operator, suedthe state to
block enforcement of the law. Alderman asserted that the statute violated the equal protection clause
O
because it placed requirements on motorcyclists that were not imposed on other motorists. Using the
information presented in the chapter, answer the following questions.
1. Why does this statute raise equal protection issues instead of substantive due process concerns?
R
Solution
When a law or action limits the liberty of some persons but not others, it may violate the equal
protection clause. Here, because the law applies only to motorcycle operators and passengers, it raises
equal protection issues.
EG
2. What are the three levels of scrutiny that the courts use in determining whether a law violatesthe
equal protection clause?
Solution
The three levels of scrutiny that courts apply to determine whether the law or action violates equal
protection are (1) strict scrutiny (if fundamental rights are at stake), (2) intermediate scrutiny (in cases
involving discrimination based on gender or legitimacy), and (3) the ―rational basis‖ test (in matters of
economic or social welfare).
U
3. Which level of scrutiny or test would apply to this situation? Why?
Solution
ID
The court would likely apply the rational basis test, because the statute regulates a matter of social
welfare by requiring helmets. Similar to seat-belt laws and speed limits, a helmet statute involves the
state‘s attempt to protect the welfare of its citizens. Thus, the court would considerit a matter a social
welfare and require that it be rationally related to a legitimate government objective.
ES
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Solution and Answer Guide
Miller, Business Law Today, The Essentials Text & Summarized Cases 13e,
9780357635346;Chapter 01: Legal and Constitutional Foundations of Business
SC
Table of Contents
Critical Thinking Questions in Features......................................................................................................... 1
Adapting the Law to the Online Environment .......................................................................................... 1
Critical Thinking Questions in Cases.............................................................................................................. 2
Case 1.1 ..................................................................................................................................................... 2
O
Case 1.2 ..................................................................................................................................................... 3
Case 1.3 ..................................................................................................................................................... 3
Chapter Review ............................................................................................................................................. 4
R
Practice and Review .................................................................................................................................. 4
Practice and Review: Debate This ............................................................................................................. 5
Issue Spotters ............................................................................................................................................ 5
EG
Business Scenarios and Case Problems..................................................................................................... 5
Critical Thinking and Writing Assignments ............................................................................................. 10
Critical Thinking Questions in Appendix Exhibit 1A–3 ................................................................................ 11
Exhibit 1A–3 ............................................................................................................................................ 11
U
Critical Thinking Questions in Features
Adapting the Law to the Online Environment
ID
1. One observer has said that the American legal system should evaluate social media companies based on
how ―they affect us as citizens, not only [on how] they affect us as consumers.‖ What is your opinion of
this statement?
Solution
The person who made this statement clearly sees a ―citizen‖ as having different motivations and concerns
ES
than a ―consumer.‖ Presumably, a citizen is mostly concerned with the good of society as a whole, and
therefore would be open to the idea of government regulation that restricted thenegative influence of
social media, regardless of the First Amendment. A consumer, by contrast, would be primarily concerned
with having a marketplace that offers the widest possible varieties of freedom (of choice, of speech, etc.)
and would for that reason be opposed to government regulation of social media. There is, however, an
argument to be made that the citizens that make up a society benefit when the marketplace of ideas—
whether they are subjectively
―positive‖ or ―negative‖—is allowed to flourish in the absence of government regulation.
2. Tim Cook, Apple‘s chief operating officer, has suggested that the United States Congress shouldpass a
law limiting the ability of Apple and other tech countries to keep consumer data private. Why would a
business executive make such a request?
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, kjhgfdsa
Solution
Cook may have wanted to end a controversy that puts Apple squarely at odds with the federal
government. After all, large companies such as Apple rely on favorable treatment from the government
in regulatory matters, international trade agreements, and many other areas. Also, large corporations
such as Apple sometimes gain an advantage over competitors when their industries are regulated. For
example, Apple has significant resources with which to lobby Congress for favorable treatment, and it is
better positioned to bear the costs of regulation thanare other, smaller tech companies. Finally, Apple‘s
position as a champion of consumer privacy would be damaged if it ―caved‖ and changed its stance
SC
without being forced to do so by a new federal law.
Critical Thinking Questions in Cases
Case 1.1
1. What ―dangerous conditions‖ might have prompted the city to enact the ordinances at issue in this
case? Why?
O
Solution
As noted in the facts of the case, both ordinances at issue included an extensive rationale fortheir
adoption, stating essentially that a geographically small city has the right to restrict a
business from operating within the city when the restriction is for the safety of the city‘s citizensand
visitors.
R
The appellate court referred to ―the dangerous conditions‖ created by the irresponsible driving behavior of
scooter renters, especially at night, amplified by the lack of training, supervision, and oversight practiced
by the rental scooter businesses that ―existed throughout the entire city‖ as the basis for the city‘s
EG
regulation. The court paraphrased the expressive clauses in the ordinancesmore specifically:
• The City is geographically small and crowded and is being besieged by inexperienced scooter drivers
seeking amusement and driving in a dangerous manner.
• The City is a tourist destination frequented by tens of thousands, and its streets are congested by
scooters that are being driven illegally and in areas where they are not permitted.
• The City‘s residents and visitors are put in dangerous situations as a result of the improper use of
scooters, especially at night.
U
• City businesses have complained about numerous trespasses on their property by people driving
scooters while being disruptive
• City police have been unable to cope with the situation and essential police resources are being
drained.
ID
• The City has been unable to control the situation through less restrictive means.
ES
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, kjhgfdsa
2. What is the likely economic impact of the ordinances on the businesses in the city? Discuss.
Solution
With the exception of the scooter rental businesses, the effect on the city‘s economy is likely tobe
positive in light of the result in the Classy case.
The answer to the previous question contains the reasons in support of this outlook. With a banon
motorized scooters, the ―small and crowded‖ city is not likely to be ―besieged by inexperienced scooter
drivers seeking amusement and driving in a dangerous manner.‖ The streets, filled with ―tens of
SC
thousands‖ of tourists will not be ―congested by scooters that are
being driven illegally and in areas where they are not permitted.‖ Residents and visitors will not be ―put
in dangerous situations as a result of the improper use of scooters, especially at night.‖ There will be an
end to the ―numerous trespasses‖ on business property ―by people driving
scooters while being disruptive.‖ And ―essential police resources‖ will not be ―drained,‖ at least not by
irresponsible scooter drivers and riders. All of which bodes well for business.
O
Case 1.2
1. If this case had involved a small, private retail business that did not advertise nationally, wouldthe result
have been the same? Why or why not?
Solution
R
It is not likely that the result in this case would have been different even if the facts had involveda small,
private retail business that did not advertise nationally. The intended impact of the decision in Heart of
Atlanta was to uphold the constitutionality of the Civil Rights Act of 1964 andthe power of Congress to
regulate interstate commerce to stop local discriminatory practices. In the Supreme Court‘s opinion, ―The
EG
power of Congress to promote interstate commerce also includes the power to regulate the local
incidents thereof, including local activities in both the States of origin and destination, which might have a
substantial and harmful effect upon that
commerce.‖
Thus, if the case had involved a small, local retail business, the Court would have found participation in
interstate commerce based on the use of a phone, or a Facebook page (or otherWeb presence), or sales to
customers who traveled across state lines—or, as in Wickard v.
U
Filburn, participation might have been based on any transaction that might otherwise have
occurred in interstate commerce.
Case 1.3
ID
1. Whose interests are advanced by the banning of certain types of advertising?
Solution
The government‘s interests are advanced when certain ads are banned. For example, in the BadFrog case,
the court acknowledged, by advising the state to restrict the locations where certain ads could be
ES
displayed, that banning of ―vulgar and profane‖ advertising from children‘s sight arguably advanced the
state‘s interest in protecting children from those ads.
hgfdsa
, kjhgfdsa
2. If Bad Frog had sought to use the offensive label to market toys instead of beer, would thecourt‘s
ruling likely have been the same? Explain your answer.
Solution
Probably not. The reasoning underlying the court‘s decision in the case was, in part, that ―the State‘s
prohibition of the labels . . . does not materially advance its asserted interests in insulating children from
vulgarity . . . and is not narrowly tailored to the interest concerning
children.‖ The court‘s reasoning was supported in part by the fact that children cannot buy beer.If the
labels advertised toys, however, the court‘s reasoning might have been different.
SC
Chapter Review
Practice and Review
A state legislature enacted a statute that required any motorcycle operator or passenger on the state‘s
highways to wear a protective helmet. Jim Alderman, a licensed motorcycle operator, suedthe state to
block enforcement of the law. Alderman asserted that the statute violated the equal protection clause
O
because it placed requirements on motorcyclists that were not imposed on other motorists. Using the
information presented in the chapter, answer the following questions.
1. Why does this statute raise equal protection issues instead of substantive due process concerns?
R
Solution
When a law or action limits the liberty of some persons but not others, it may violate the equal
protection clause. Here, because the law applies only to motorcycle operators and passengers, it raises
equal protection issues.
EG
2. What are the three levels of scrutiny that the courts use in determining whether a law violatesthe
equal protection clause?
Solution
The three levels of scrutiny that courts apply to determine whether the law or action violates equal
protection are (1) strict scrutiny (if fundamental rights are at stake), (2) intermediate scrutiny (in cases
involving discrimination based on gender or legitimacy), and (3) the ―rational basis‖ test (in matters of
economic or social welfare).
U
3. Which level of scrutiny or test would apply to this situation? Why?
Solution
ID
The court would likely apply the rational basis test, because the statute regulates a matter of social
welfare by requiring helmets. Similar to seat-belt laws and speed limits, a helmet statute involves the
state‘s attempt to protect the welfare of its citizens. Thus, the court would considerit a matter a social
welfare and require that it be rationally related to a legitimate government objective.
ES
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