, Solution manual for Business Law Today, The
Essentials Text and Summarized Cases, 13th Edition
Roger LeRoy Miller
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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
Solution and Answer Guide
Miller, Business Law Today, The Essentials Text & Summarized Cases 13e, 9780357635346;
Chapter 01: Legal and Constitutional Foundations of Business
Table of Contents
Critical Thinking Questions in Features .................................................................................................................. 1
Adapting the Law to the Online Environment ........................................................................................... 1
Critical Thinking Questions in Cases ........................................................................................................................ 2
Case 1.1 ..................................................................................................................................................... 2
Case 1.2 ..................................................................................................................................................... 3
Case 1.3 ..................................................................................................................................................... 3
Chapter Review ................................................................................................................................................................ 4
Practice and Review .................................................................................................................................. 4
Practice and Review: Debate This ............................................................................................................. 5
Issue Spotters ............................................................................................................................................ 5
Business Scenarios and Case Problems ..................................................................................................... 6
Critical Thinking and Writing Assignments .............................................................................................. 11
Critical Thinking Questions in Appendix Exhibit 1A–3 ................................................................................... 12
Exhibit 1A–3 ............................................................................................................................................ 12
Critical Thinking Questions in Features
Adapting the Law to the Online Environment
1. One observer has said that the American legal system should evaluate social media companies
based on how “they affect us as citizens, not only [on how] they affect us as consumers.” What is
your opinion of this statement?
Solution
The person who made this statement clearly sees a “citizen” as having different motivations and
concerns than a “consumer.” Presumably, a citizen is mostly concerned with the good of society
as a whole, and therefore would be open to the idea of government regulation that restricted the
negative 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.
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website, in whole or in part.
, Solution and Answer Guide: Miller, Business Law Today, The Essentials Text & Summarized Cases 13e, 9780357635346;
Chapter 01: Legal and Constitutional Foundations of Business
2. Tim Cook, Apple’s chief operating officer, has suggested that the United States Congress should
pass a law limiting the ability of Apple and other tech countries to keep consumer data private.
Why would a business executive make such a request?
Solution
Cook may have wanted to end a controversy that puts Apple squarely at odds with the federal
government. After all, large companies such as Apple rely on favorable treatment from the
government in regulatory matters, international trade agreements, and many other areas. Also,
large corporations such as Apple sometimes gain an advantage over competitors when their
industries are regulated. For example, Apple has significant resources with which to lobby
Congress for favorable treatment, and it is better positioned to bear the costs of regulation than
are other, smaller tech companies. Finally, Apple’s position as a champion of consumer privacy
would be damaged if it “caved” and changed its stance without being forced to do so by a new
federal law.
Critical Thinking Questions in Cases
Case 1.1
1. What “dangerous conditions” might have prompted the city to enact the ordinances at issue in
this case? Why?
Solution
As noted in the facts of the case, both ordinances at issue included an extensive rationale for their
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 citizens and
visitors.
The appellate court referred to “the dangerous conditions” created by the irresponsible driving
behavior of scooter renters, especially at night, amplified by the lack of training, supervision, and
oversight practiced by the rental scooter businesses that “existed throughout the entire city” as
the basis for the city’s regulation. The court paraphrased the expressive clauses in the ordinances
more specifically:
• The City is geographically small and crowded and is being besieged by inexperienced scooter
drivers seeking amusement and driving in a dangerous manner.
• The City is a tourist destination frequented by tens of thousands, and its streets are congested
by scooters that are being driven illegally and in areas where they are not permitted.
• The City’s residents and visitors are put in dangerous situations as a result of the improper use
of scooters, especially at night.
• City businesses have complained about numerous trespasses on their property by people
driving scooters while being disruptive
• City police have been unable to cope with the situation and essential police resources are being
drained.
• The City has been unable to control the situation through less restrictive means.
© 2022 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 2
website, in whole or in part.
, Solution and Answer Guide: Miller, Business Law Today, The Essentials Text & Summarized Cases 13e, 9780357635346;
Chapter 01: Legal and Constitutional Foundations of Business
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 to be
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 ban
on motorized scooters, the “small and crowded” city is not likely to be “besieged by inexperienced
scooter drivers seeking amusement and driving in a dangerous manner.” The streets, filled with
“tens of thousands” of tourists will not be “congested by scooters that are being driven illegally
and in areas where they are not permitted.” Residents and visitors will not be “put in dangerous
situations as a result of the improper use of scooters, especially at night.” There will be an end to
the “numerous trespasses” on business property “by people driving scooters while being
disruptive.” And “essential police resources” will not be “drained,” at least not by irresponsible
scooter drivers and riders. All of which bodes well for business.
Case 1.2
1. If this case had involved a small, private retail business that did not advertise nationally, would the
result have been the same? Why or why not?
Solution
It is not likely that the result in this case would have been different even if the facts had involved a
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 and the
power of Congress to regulate interstate commerce to stop local discriminatory practices. In the
Supreme Court’s opinion, “The power of Congress to promote interstate commerce also includes
the power to regulate the local incidents thereof, including local activities in both the States of
origin and destination, which might have a substantial and harmful effect upon that commerce.”
Thus, if the case had involved a small, local retail business, the Court would have found
participation in interstate commerce based on the use of a phone, or a Facebook page (or other
Web presence), or sales to customers who traveled across state lines—or, as in Wickard v. Filburn,
participation might have been based on any transaction that might otherwise have occurred in
interstate commerce.
Case 1.3
1. Whose interests are advanced by the banning of certain types of advertising?
Solution
The government’s interests are advanced when certain ads are banned. For example, in the Bad
Frog case, the court acknowledged, by advising the state to restrict the locations where certain
ads could be displayed, that banning of “vulgar and profane” advertising from children’s sight
arguably advanced the state’s interest in protecting children from those ads.
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website, in whole or in part.
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Chapter 01: Legal and Constitutional Foundations of Business
2. If Bad Frog had sought to use the offensive label to market toys instead of beer, would the court’s
ruling likely have been the same? Explain your answer.
Solution
Probably not. The reasoning underlying the court’s decision in the case was, in part, that “the
State’s prohibition of the labels . . . does not materially advance its asserted interests in insulating
children from vulgarity . . . and is not narrowly tailored to the interest concerning children.” The
court’s reasoning was supported in part by the fact that children cannot buy beer. If the labels
advertised toys, however, the court’s reasoning might have been different.
Chapter Review
Practice and Review
A state legislature enacted a statute that required any motorcycle operator or passenger on the
state’s highways to wear a protective helmet. Jim Alderman, a licensed motorcycle operator, sued
the state to block enforcement of the law. Alderman asserted that the statute violated the equal
protection clause because it placed requirements on motorcyclists that were not imposed on
other motorists. Using the information presented in the chapter, answer the following questions.
1. Why does this statute raise equal protection issues instead of substantive due process concerns?
Solution
When a law or action limits the liberty of some persons but not others, it may violate the equal
protection clause. Here, because the law applies only to motorcycle operators and passengers, it
raises equal protection issues.
2. What are the three levels of scrutiny that the courts use in determining whether a law violates the
equal protection clause?
Solution
The three levels of scrutiny that courts apply to determine whether the law or action violates
equal protection are (1) strict scrutiny (if fundamental rights are at stake), (2) intermediate scrutiny
(in cases involving discrimination based on gender or legitimacy), and (3) the “rational basis” test
(in matters of economic or social welfare).
3. Which level of scrutiny or test would apply to this situation? Why?
Solution
The court would likely apply the rational basis test, because the statute regulates a matter of
social welfare by requiring helmets. Similar to seat-belt laws and speed limits, a helmet statute
involves the state’s attempt to protect the welfare of its citizens. Thus, the court would consider it
a matter a social welfare and require that it be rationally related to a legitimate government
objective.
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website, in whole or in part.
, Solution and Answer Guide: Miller, Business Law Today, The Essentials Text & Summarized Cases 13e, 9780357635346;
Chapter 01: Legal and Constitutional Foundations of Business
4. Under this standard or test, is the helmet statute constitutional? Why or why not?
Solution
The statute is probably constitutional, because requiring helmets is rationally related to a
legitimate government objective (public health and safety). Under the rational basis test, courts
rarely strike down laws as unconstitutional, and this statute will likely further the legitimate state
interest of protecting the welfare of citizens and promoting safety.
Practice and Review: Debate This
1. Under the doctrine of stare decisis, courts are obligated to follow the precedents established in
their jurisdictions unless there is a compelling reason not to. Should U.S. courts continue to
adhere to this common law principle, given that our government now regulates so many areas by
statute?
Solution
Both England and the U.S. legal systems were constructed on the common law system. The doctrine of
stare decisis has always been a major part of this system—courts should follow precedents when they
are clearly established, excepted under compelling reasons. Even though more common law is being
turned into statutory law, the doctrine of stare decisis is still valid. After all, even statutes have to be
interpreted by courts. What better basis for judges to render their decisions than by basing them on
precedents related to the subject at hand?
In contrast, some students may argue that the doctrine of stare decisis is passé. There is certainly
less common law governing, say, environmental law than there was 100 years ago. Given that
federal and state governments increasingly are regulating more aspects of commercial
transactions between merchants and consumers, perhaps the courts should simply stick to
statutory language when disputes arise.
Issue Spotters
1. The First Amendment to the U.S. Constitution provides protection for the free exercise of religion.
A state legislature enacts a law that outlaws all religions that do not derive from the Judeo-
Christian tradition. Is this law valid within that state? Why or why not?
Solution
No. The U.S. Constitution is the supreme law of the land, and applies to all jurisdictions. A law in
violation of the Constitution (in this question, the First Amendment to the Constitution) will be
declared unconstitutional.
2. South Dakota wants its citizens to conserve energy. To help reduce consumer consumption of
electricity, the state passes a law that bans all advertising by power utilities within the state. What
argument could the power utilities use as a defense to the enforcement of this state law?
Solution
Even if commercial speech is neither related to illegal activities nor misleading, it may be
restricted if a state has a substantial interest that cannot be achieved by less restrictive means. In
this situation, however, the interest in energy conservation is substantial, but it could be achieved
by less restrictive means. That would be the utilities’ defense against the enforcement of this state
law.
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website, in whole or in part.
, Solution and Answer Guide: Miller, Business Law Today, The Essentials Text & Summarized Cases 13e, 9780357635346;
Chapter 01: Legal and Constitutional Foundations of Business
Business Scenarios and Case Problems
1. Binding versus Persuasive Authority. A county court in Illinois is deciding a case involving an
issue that has never been addressed before in that state’s courts. The Iowa Supreme Court,
however, recently decided a case involving a very similar fact pattern. Is the Illinois court obligated
to follow the Iowa Supreme Court’s decision on the issue? If the United States Supreme Court had
decided a similar case, would that decision be binding on the Illinois court? Explain. (See The
Common Law.)
Solution
A decision of a court is binding on all inferior courts. Because no state’s court is inferior to any
other state’s court, no state’s court is obligated to follow the decision of another state’s court on
an issue. The decision may be persuasive, however, depending on the nature of the case and the
particular judge hearing it. A decision of the United States Supreme Court on an issue is binding,
like the decision of any court, on all inferior courts. The United States Supreme Court is the
nation’s highest court, however, and thus, its decisions are binding on all courts, including state
courts.
2. Sources of Law. This chapter discussed a number of sources of American law. Which source of
law takes priority in the following situations, and why? (See Sources of American Law.)
1. A federal statute conflicts with the U.S. Constitution.
Solution
The U.S. Constitution—The U.S. Constitution is the supreme law of the land. A law in violation
of the Constitution, no matter what its source, will be declared unconstitutional and will not
be enforced.
2. A federal statute conflicts with a state constitutional provision.
Solution
The federal statute—Under the U.S. Constitution, when there is a conflict between a federal
law and a state law, the state law is rendered invalid.
3. A state statute conflicts with the common law of that state.
Solution
The state statute—State statutes are enacted by state legislatures. Areas not covered by state
statutory law are governed by state case law.
4. A state constitutional amendment conflicts with the U.S. Constitution.
Solution
The U.S. Constitution—State constitutions are supreme within their respective borders unless
they conflict with the U.S. Constitution, which is the supreme law of the land.
3. Equal Protection. Abbott Laboratories licensed SmithKline Beecham Corp. to market an Abbott
human immunodeficiency virus (HIV) drug in conjunction with one of SmithKline’s drugs. Abbott
then increased the price of its drug fourfold, forcing SmithKline to increase its prices and thereby
driving business to Abbott’s own combination drug. SmithKline filed a suit in a federal district
court against Abbott. During jury selection, Abbott struck the only self-identified gay person
among the potential jurors. (The pricing of HIV drugs is of considerable concern in the gay
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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
community.) Could the equal protection clause be applied to prohibit discrimination based on
sexual orientation in jury selection? Discuss. [SmithKline Beecham Corp. v. Abbott Laboratories, 740
F.3d 471 (9th Cir. 2014)] (See Due Process, Equal Protection, and Privacy.)
Solution
Yes. The equal protection clause can be applied to prohibit discrimination based on sexual
orientation in jury selection. The appropriate level of scrutiny would be intermediate scrutiny.
Under the equal protection clause of the Fourteenth Amendment, the government cannot enact a
law or take another action that treats similarly situated individuals differently. If it does, a court
examines the basis for the distinction. Intermediate scrutiny applies in cases involving
discrimination based on gender. Under this test, a distinction must be substantially related to an
important government objective.
Gays and lesbians were long excluded from participating in our government and the privileges of
citizenship. A juror strike on the basis of sexual orientation tells the individual who has been
struck, as well as the trial participants and the general public, that the judicial system still treats
gays and lesbians differently. This deprives these individuals of the opportunity to participate in a
democratic institution on the basis of a characteristic that has nothing to do with their fitness to
serve.
In the actual case on which this problem is based, SmithKline challenged the strike. The judge
denied the challenge. On SmithKline’s appeal, the U.S. Court of Appeals for the Ninth Circuit held
that the equal protection clause prohibits discrimination based on sexual orientation in jury
selection and requires that heightened scrutiny be applied to equal protection claims involving
sexual orientation. The appellate court remanded the case for a new trial.
4. Procedural Due Process. Robert Brown applied for admission to the University of Kansas School
of Law. Brown answered “no” to questions on the application asking if he had a criminal history
and acknowledged that a false answer constituted “cause for . . . dismissal.” In fact, Brown had
criminal convictions for domestic battery and driving under the influence. He was accepted for
admission to the school. When school officials discovered his history, however, he was notified of
their intent to dismiss him and given an opportunity to respond in writing. He demanded a
hearing. The officials refused to grant Brown a hearing and then expelled him. Did the school’s
actions deny Brown due process? Discuss. [Brown v. University of Kansas, 599 Fed.Appx. 833 (10th
Cir. 2015)] (See Due Process, Equal Protection, and Privacy.)
Solution
No. The school’s actions did not deny Brown due process. Procedural due process requires that
any government decision to take life, liberty, or property must be made fairly. The government
must give a person proper notice and an opportunity to be heard. The government must use fair
procedures—the person must have at least an opportunity to object to a proposed action before
a fair, neutral decision maker.
In this problem, Robert Brown applied for admission to the University of Kansas School of Law. He
answered “no” to the questions on the application about criminal history and acknowledged that
a false answer constituted cause for dismissal. He was accepted for admission to the school. But
Brown had previous criminal convictions for domestic battery and driving under the influence.
When school officials discovered this history, Brown was notified of their intent to dismiss him
and given an opportunity to respond in writing. He demanded a hearing. The officials refused,
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website, in whole or in part.
, Solution and Answer Guide: Miller, Business Law Today, The Essentials Text & Summarized Cases 13e, 9780357635346;
Chapter 01: Legal and Constitutional Foundations of Business
and expelled him. As for due process, Brown knew he could be dismissed for false answers on his
application. The school gave Brown notice of its intent to expel him and gave him an opportunity
to be heard (in writing). Due process does not require that any specific set of detailed procedures
be followed as long as the procedures are fair.
In the actual case on which this problem is based, Brown filed a suit in a federal district court
against the school, alleging denial of due process. From a judgment in the school’s favor, Brown
appealed. The U.S. Court of Appeals for the Tenth Circuit affirmed, concluding that “the
procedures afforded to Mr. Brown were fair.”
5. The Commerce Clause. Regency Transportation, Inc., operates a freight business throughout the
eastern United States. Regency maintains its corporate headquarters, four warehouses, and a
maintenance facility and terminal location for repairing and storing vehicles in Massachusetts. All
of the vehicles in Regency’s fleet were bought in other states. Massachusetts imposes a use tax on
all taxpayers subject to its jurisdiction, including those that do business in interstate commerce, as
Regency does. When Massachusetts imposed the tax on the purchase price of each tractor and
trailer in Regency’s fleet, the trucking firm challenged the assessment as discriminatory under the
commerce clause. What is the chief consideration under the commerce clause when a state law
affects interstate commerce? Is Massachusetts’s use tax valid? Explain. [Regency Transportation,
Inc. v. Commissioner of Revenue, 473 Mass. 459, 42 N.E.3d 1133 (2016)] (See The Constitutional
Powers of Government.)
Solution
Yes. Massachusetts’s use tax is valid under the commerce clause. When a state regulation that
affects interstate commerce is challenged under the commerce clause, the court weighs the
state’s interest in regulating the matter against the burden that the regulation places on interstate
commerce. Because a court balances the interests involved, it is difficult to predict the outcome in
a particular case. State laws that alter conditions of competition to favor in-state interests over
out-of-state competitors in a market are considered discriminatory and usually invalidated.
In this problem, Regency Transportation, Inc., operates a freight business throughout the eastern
United States. Regency maintains a headquarters, warehouses, and other facilities in
Massachusetts. All of the vehicles in Regency’s fleet were bought in other states. When
Massachusetts imposed a use tax on the purchase price of each tractor and trailer in Regency’s
fleet, the trucking firm challenged the assessment as discriminatory under the commerce clause.
But Massachusetts imposes the tax on all taxpayers subject to its jurisdiction, not only those that,
like Regency, do business in interstate commerce. Hence, the tax is not discriminatory. As for the
balancing test, Massachusetts presumably imposes the tax based on the benefits derived from a
company’s using and storing vehicles in the state. The burden that the regulation places on
interstate commerce seems slight weighed against the state’s interest in regulating this matter.
In the actual case on which this case problem is based, Regency sought review of imposition of
motor vehicle tax by the Commissioner of Revenue. The Appellate Tax Board affirmed, and
Regency filed a petition for direct appellate review. The Supreme Judicial Court of Massachusetts
affirmed the decision of the board.
6. Business Case Problem with Sample Answer— Reading Citations. Assume that you want to
read the entire court opinion in the case of Worldwide TechServices, LLC v. Commissioner of
Revenue, 479 Mass. 20, 91 N.E.3d 650 (2018). Refer to the appendix to this chapter, and then
© 2022 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 8
website, in whole or in part.
Essentials Text and Summarized Cases, 13th Edition
Roger LeRoy Miller
Notes
1- All Chapters are step by step.
2- We have shown you 10 pages.
3- The file contains all Appendix and Excel
sheet if it exists.
4- We have all what you need, we make
update at every time. There are many new
editions waiting you.
5- If you think you purchased the wrong file
You can contact us at every time, we can
replace it with true one.
Our email:
, Solution and Answer Guide: Miller, Business Law Today, The Essentials Text & Summarized Cases 13e, 9780357635346;
Chapter 01: Legal and Constitutional Foundations of Business
Solution and Answer Guide
Miller, Business Law Today, The Essentials Text & Summarized Cases 13e, 9780357635346;
Chapter 01: Legal and Constitutional Foundations of Business
Table of Contents
Critical Thinking Questions in Features .................................................................................................................. 1
Adapting the Law to the Online Environment ........................................................................................... 1
Critical Thinking Questions in Cases ........................................................................................................................ 2
Case 1.1 ..................................................................................................................................................... 2
Case 1.2 ..................................................................................................................................................... 3
Case 1.3 ..................................................................................................................................................... 3
Chapter Review ................................................................................................................................................................ 4
Practice and Review .................................................................................................................................. 4
Practice and Review: Debate This ............................................................................................................. 5
Issue Spotters ............................................................................................................................................ 5
Business Scenarios and Case Problems ..................................................................................................... 6
Critical Thinking and Writing Assignments .............................................................................................. 11
Critical Thinking Questions in Appendix Exhibit 1A–3 ................................................................................... 12
Exhibit 1A–3 ............................................................................................................................................ 12
Critical Thinking Questions in Features
Adapting the Law to the Online Environment
1. One observer has said that the American legal system should evaluate social media companies
based on how “they affect us as citizens, not only [on how] they affect us as consumers.” What is
your opinion of this statement?
Solution
The person who made this statement clearly sees a “citizen” as having different motivations and
concerns than a “consumer.” Presumably, a citizen is mostly concerned with the good of society
as a whole, and therefore would be open to the idea of government regulation that restricted the
negative 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.
© 2022 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 1
website, in whole or in part.
, Solution and Answer Guide: Miller, Business Law Today, The Essentials Text & Summarized Cases 13e, 9780357635346;
Chapter 01: Legal and Constitutional Foundations of Business
2. Tim Cook, Apple’s chief operating officer, has suggested that the United States Congress should
pass a law limiting the ability of Apple and other tech countries to keep consumer data private.
Why would a business executive make such a request?
Solution
Cook may have wanted to end a controversy that puts Apple squarely at odds with the federal
government. After all, large companies such as Apple rely on favorable treatment from the
government in regulatory matters, international trade agreements, and many other areas. Also,
large corporations such as Apple sometimes gain an advantage over competitors when their
industries are regulated. For example, Apple has significant resources with which to lobby
Congress for favorable treatment, and it is better positioned to bear the costs of regulation than
are other, smaller tech companies. Finally, Apple’s position as a champion of consumer privacy
would be damaged if it “caved” and changed its stance without being forced to do so by a new
federal law.
Critical Thinking Questions in Cases
Case 1.1
1. What “dangerous conditions” might have prompted the city to enact the ordinances at issue in
this case? Why?
Solution
As noted in the facts of the case, both ordinances at issue included an extensive rationale for their
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 citizens and
visitors.
The appellate court referred to “the dangerous conditions” created by the irresponsible driving
behavior of scooter renters, especially at night, amplified by the lack of training, supervision, and
oversight practiced by the rental scooter businesses that “existed throughout the entire city” as
the basis for the city’s regulation. The court paraphrased the expressive clauses in the ordinances
more specifically:
• The City is geographically small and crowded and is being besieged by inexperienced scooter
drivers seeking amusement and driving in a dangerous manner.
• The City is a tourist destination frequented by tens of thousands, and its streets are congested
by scooters that are being driven illegally and in areas where they are not permitted.
• The City’s residents and visitors are put in dangerous situations as a result of the improper use
of scooters, especially at night.
• City businesses have complained about numerous trespasses on their property by people
driving scooters while being disruptive
• City police have been unable to cope with the situation and essential police resources are being
drained.
• The City has been unable to control the situation through less restrictive means.
© 2022 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 2
website, in whole or in part.
, Solution and Answer Guide: Miller, Business Law Today, The Essentials Text & Summarized Cases 13e, 9780357635346;
Chapter 01: Legal and Constitutional Foundations of Business
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 to be
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 ban
on motorized scooters, the “small and crowded” city is not likely to be “besieged by inexperienced
scooter drivers seeking amusement and driving in a dangerous manner.” The streets, filled with
“tens of thousands” of tourists will not be “congested by scooters that are being driven illegally
and in areas where they are not permitted.” Residents and visitors will not be “put in dangerous
situations as a result of the improper use of scooters, especially at night.” There will be an end to
the “numerous trespasses” on business property “by people driving scooters while being
disruptive.” And “essential police resources” will not be “drained,” at least not by irresponsible
scooter drivers and riders. All of which bodes well for business.
Case 1.2
1. If this case had involved a small, private retail business that did not advertise nationally, would the
result have been the same? Why or why not?
Solution
It is not likely that the result in this case would have been different even if the facts had involved a
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 and the
power of Congress to regulate interstate commerce to stop local discriminatory practices. In the
Supreme Court’s opinion, “The power of Congress to promote interstate commerce also includes
the power to regulate the local incidents thereof, including local activities in both the States of
origin and destination, which might have a substantial and harmful effect upon that commerce.”
Thus, if the case had involved a small, local retail business, the Court would have found
participation in interstate commerce based on the use of a phone, or a Facebook page (or other
Web presence), or sales to customers who traveled across state lines—or, as in Wickard v. Filburn,
participation might have been based on any transaction that might otherwise have occurred in
interstate commerce.
Case 1.3
1. Whose interests are advanced by the banning of certain types of advertising?
Solution
The government’s interests are advanced when certain ads are banned. For example, in the Bad
Frog case, the court acknowledged, by advising the state to restrict the locations where certain
ads could be displayed, that banning of “vulgar and profane” advertising from children’s sight
arguably advanced the state’s interest in protecting children from those ads.
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Chapter 01: Legal and Constitutional Foundations of Business
2. If Bad Frog had sought to use the offensive label to market toys instead of beer, would the court’s
ruling likely have been the same? Explain your answer.
Solution
Probably not. The reasoning underlying the court’s decision in the case was, in part, that “the
State’s prohibition of the labels . . . does not materially advance its asserted interests in insulating
children from vulgarity . . . and is not narrowly tailored to the interest concerning children.” The
court’s reasoning was supported in part by the fact that children cannot buy beer. If the labels
advertised toys, however, the court’s reasoning might have been different.
Chapter Review
Practice and Review
A state legislature enacted a statute that required any motorcycle operator or passenger on the
state’s highways to wear a protective helmet. Jim Alderman, a licensed motorcycle operator, sued
the state to block enforcement of the law. Alderman asserted that the statute violated the equal
protection clause because it placed requirements on motorcyclists that were not imposed on
other motorists. Using the information presented in the chapter, answer the following questions.
1. Why does this statute raise equal protection issues instead of substantive due process concerns?
Solution
When a law or action limits the liberty of some persons but not others, it may violate the equal
protection clause. Here, because the law applies only to motorcycle operators and passengers, it
raises equal protection issues.
2. What are the three levels of scrutiny that the courts use in determining whether a law violates the
equal protection clause?
Solution
The three levels of scrutiny that courts apply to determine whether the law or action violates
equal protection are (1) strict scrutiny (if fundamental rights are at stake), (2) intermediate scrutiny
(in cases involving discrimination based on gender or legitimacy), and (3) the “rational basis” test
(in matters of economic or social welfare).
3. Which level of scrutiny or test would apply to this situation? Why?
Solution
The court would likely apply the rational basis test, because the statute regulates a matter of
social welfare by requiring helmets. Similar to seat-belt laws and speed limits, a helmet statute
involves the state’s attempt to protect the welfare of its citizens. Thus, the court would consider it
a matter a social welfare and require that it be rationally related to a legitimate government
objective.
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Chapter 01: Legal and Constitutional Foundations of Business
4. Under this standard or test, is the helmet statute constitutional? Why or why not?
Solution
The statute is probably constitutional, because requiring helmets is rationally related to a
legitimate government objective (public health and safety). Under the rational basis test, courts
rarely strike down laws as unconstitutional, and this statute will likely further the legitimate state
interest of protecting the welfare of citizens and promoting safety.
Practice and Review: Debate This
1. Under the doctrine of stare decisis, courts are obligated to follow the precedents established in
their jurisdictions unless there is a compelling reason not to. Should U.S. courts continue to
adhere to this common law principle, given that our government now regulates so many areas by
statute?
Solution
Both England and the U.S. legal systems were constructed on the common law system. The doctrine of
stare decisis has always been a major part of this system—courts should follow precedents when they
are clearly established, excepted under compelling reasons. Even though more common law is being
turned into statutory law, the doctrine of stare decisis is still valid. After all, even statutes have to be
interpreted by courts. What better basis for judges to render their decisions than by basing them on
precedents related to the subject at hand?
In contrast, some students may argue that the doctrine of stare decisis is passé. There is certainly
less common law governing, say, environmental law than there was 100 years ago. Given that
federal and state governments increasingly are regulating more aspects of commercial
transactions between merchants and consumers, perhaps the courts should simply stick to
statutory language when disputes arise.
Issue Spotters
1. The First Amendment to the U.S. Constitution provides protection for the free exercise of religion.
A state legislature enacts a law that outlaws all religions that do not derive from the Judeo-
Christian tradition. Is this law valid within that state? Why or why not?
Solution
No. The U.S. Constitution is the supreme law of the land, and applies to all jurisdictions. A law in
violation of the Constitution (in this question, the First Amendment to the Constitution) will be
declared unconstitutional.
2. South Dakota wants its citizens to conserve energy. To help reduce consumer consumption of
electricity, the state passes a law that bans all advertising by power utilities within the state. What
argument could the power utilities use as a defense to the enforcement of this state law?
Solution
Even if commercial speech is neither related to illegal activities nor misleading, it may be
restricted if a state has a substantial interest that cannot be achieved by less restrictive means. In
this situation, however, the interest in energy conservation is substantial, but it could be achieved
by less restrictive means. That would be the utilities’ defense against the enforcement of this state
law.
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Chapter 01: Legal and Constitutional Foundations of Business
Business Scenarios and Case Problems
1. Binding versus Persuasive Authority. A county court in Illinois is deciding a case involving an
issue that has never been addressed before in that state’s courts. The Iowa Supreme Court,
however, recently decided a case involving a very similar fact pattern. Is the Illinois court obligated
to follow the Iowa Supreme Court’s decision on the issue? If the United States Supreme Court had
decided a similar case, would that decision be binding on the Illinois court? Explain. (See The
Common Law.)
Solution
A decision of a court is binding on all inferior courts. Because no state’s court is inferior to any
other state’s court, no state’s court is obligated to follow the decision of another state’s court on
an issue. The decision may be persuasive, however, depending on the nature of the case and the
particular judge hearing it. A decision of the United States Supreme Court on an issue is binding,
like the decision of any court, on all inferior courts. The United States Supreme Court is the
nation’s highest court, however, and thus, its decisions are binding on all courts, including state
courts.
2. Sources of Law. This chapter discussed a number of sources of American law. Which source of
law takes priority in the following situations, and why? (See Sources of American Law.)
1. A federal statute conflicts with the U.S. Constitution.
Solution
The U.S. Constitution—The U.S. Constitution is the supreme law of the land. A law in violation
of the Constitution, no matter what its source, will be declared unconstitutional and will not
be enforced.
2. A federal statute conflicts with a state constitutional provision.
Solution
The federal statute—Under the U.S. Constitution, when there is a conflict between a federal
law and a state law, the state law is rendered invalid.
3. A state statute conflicts with the common law of that state.
Solution
The state statute—State statutes are enacted by state legislatures. Areas not covered by state
statutory law are governed by state case law.
4. A state constitutional amendment conflicts with the U.S. Constitution.
Solution
The U.S. Constitution—State constitutions are supreme within their respective borders unless
they conflict with the U.S. Constitution, which is the supreme law of the land.
3. Equal Protection. Abbott Laboratories licensed SmithKline Beecham Corp. to market an Abbott
human immunodeficiency virus (HIV) drug in conjunction with one of SmithKline’s drugs. Abbott
then increased the price of its drug fourfold, forcing SmithKline to increase its prices and thereby
driving business to Abbott’s own combination drug. SmithKline filed a suit in a federal district
court against Abbott. During jury selection, Abbott struck the only self-identified gay person
among the potential jurors. (The pricing of HIV drugs is of considerable concern in the gay
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community.) Could the equal protection clause be applied to prohibit discrimination based on
sexual orientation in jury selection? Discuss. [SmithKline Beecham Corp. v. Abbott Laboratories, 740
F.3d 471 (9th Cir. 2014)] (See Due Process, Equal Protection, and Privacy.)
Solution
Yes. The equal protection clause can be applied to prohibit discrimination based on sexual
orientation in jury selection. The appropriate level of scrutiny would be intermediate scrutiny.
Under the equal protection clause of the Fourteenth Amendment, the government cannot enact a
law or take another action that treats similarly situated individuals differently. If it does, a court
examines the basis for the distinction. Intermediate scrutiny applies in cases involving
discrimination based on gender. Under this test, a distinction must be substantially related to an
important government objective.
Gays and lesbians were long excluded from participating in our government and the privileges of
citizenship. A juror strike on the basis of sexual orientation tells the individual who has been
struck, as well as the trial participants and the general public, that the judicial system still treats
gays and lesbians differently. This deprives these individuals of the opportunity to participate in a
democratic institution on the basis of a characteristic that has nothing to do with their fitness to
serve.
In the actual case on which this problem is based, SmithKline challenged the strike. The judge
denied the challenge. On SmithKline’s appeal, the U.S. Court of Appeals for the Ninth Circuit held
that the equal protection clause prohibits discrimination based on sexual orientation in jury
selection and requires that heightened scrutiny be applied to equal protection claims involving
sexual orientation. The appellate court remanded the case for a new trial.
4. Procedural Due Process. Robert Brown applied for admission to the University of Kansas School
of Law. Brown answered “no” to questions on the application asking if he had a criminal history
and acknowledged that a false answer constituted “cause for . . . dismissal.” In fact, Brown had
criminal convictions for domestic battery and driving under the influence. He was accepted for
admission to the school. When school officials discovered his history, however, he was notified of
their intent to dismiss him and given an opportunity to respond in writing. He demanded a
hearing. The officials refused to grant Brown a hearing and then expelled him. Did the school’s
actions deny Brown due process? Discuss. [Brown v. University of Kansas, 599 Fed.Appx. 833 (10th
Cir. 2015)] (See Due Process, Equal Protection, and Privacy.)
Solution
No. The school’s actions did not deny Brown due process. Procedural due process requires that
any government decision to take life, liberty, or property must be made fairly. The government
must give a person proper notice and an opportunity to be heard. The government must use fair
procedures—the person must have at least an opportunity to object to a proposed action before
a fair, neutral decision maker.
In this problem, Robert Brown applied for admission to the University of Kansas School of Law. He
answered “no” to the questions on the application about criminal history and acknowledged that
a false answer constituted cause for dismissal. He was accepted for admission to the school. But
Brown had previous criminal convictions for domestic battery and driving under the influence.
When school officials discovered this history, Brown was notified of their intent to dismiss him
and given an opportunity to respond in writing. He demanded a hearing. The officials refused,
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Chapter 01: Legal and Constitutional Foundations of Business
and expelled him. As for due process, Brown knew he could be dismissed for false answers on his
application. The school gave Brown notice of its intent to expel him and gave him an opportunity
to be heard (in writing). Due process does not require that any specific set of detailed procedures
be followed as long as the procedures are fair.
In the actual case on which this problem is based, Brown filed a suit in a federal district court
against the school, alleging denial of due process. From a judgment in the school’s favor, Brown
appealed. The U.S. Court of Appeals for the Tenth Circuit affirmed, concluding that “the
procedures afforded to Mr. Brown were fair.”
5. The Commerce Clause. Regency Transportation, Inc., operates a freight business throughout the
eastern United States. Regency maintains its corporate headquarters, four warehouses, and a
maintenance facility and terminal location for repairing and storing vehicles in Massachusetts. All
of the vehicles in Regency’s fleet were bought in other states. Massachusetts imposes a use tax on
all taxpayers subject to its jurisdiction, including those that do business in interstate commerce, as
Regency does. When Massachusetts imposed the tax on the purchase price of each tractor and
trailer in Regency’s fleet, the trucking firm challenged the assessment as discriminatory under the
commerce clause. What is the chief consideration under the commerce clause when a state law
affects interstate commerce? Is Massachusetts’s use tax valid? Explain. [Regency Transportation,
Inc. v. Commissioner of Revenue, 473 Mass. 459, 42 N.E.3d 1133 (2016)] (See The Constitutional
Powers of Government.)
Solution
Yes. Massachusetts’s use tax is valid under the commerce clause. When a state regulation that
affects interstate commerce is challenged under the commerce clause, the court weighs the
state’s interest in regulating the matter against the burden that the regulation places on interstate
commerce. Because a court balances the interests involved, it is difficult to predict the outcome in
a particular case. State laws that alter conditions of competition to favor in-state interests over
out-of-state competitors in a market are considered discriminatory and usually invalidated.
In this problem, Regency Transportation, Inc., operates a freight business throughout the eastern
United States. Regency maintains a headquarters, warehouses, and other facilities in
Massachusetts. All of the vehicles in Regency’s fleet were bought in other states. When
Massachusetts imposed a use tax on the purchase price of each tractor and trailer in Regency’s
fleet, the trucking firm challenged the assessment as discriminatory under the commerce clause.
But Massachusetts imposes the tax on all taxpayers subject to its jurisdiction, not only those that,
like Regency, do business in interstate commerce. Hence, the tax is not discriminatory. As for the
balancing test, Massachusetts presumably imposes the tax based on the benefits derived from a
company’s using and storing vehicles in the state. The burden that the regulation places on
interstate commerce seems slight weighed against the state’s interest in regulating this matter.
In the actual case on which this case problem is based, Regency sought review of imposition of
motor vehicle tax by the Commissioner of Revenue. The Appellate Tax Board affirmed, and
Regency filed a petition for direct appellate review. The Supreme Judicial Court of Massachusetts
affirmed the decision of the board.
6. Business Case Problem with Sample Answer— Reading Citations. Assume that you want to
read the entire court opinion in the case of Worldwide TechServices, LLC v. Commissioner of
Revenue, 479 Mass. 20, 91 N.E.3d 650 (2018). Refer to the appendix to this chapter, and then
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