The Constitution and Business

    The U. S. Supreme Court is the final interpreter of the U. S. Constitution, which provides for a legislature to make laws, an executive to carry them out, and a judiciary to interpret them. This division of powers, with built-in checks and balances, was intended to prevent the new central government from consolidating dictatorial powers.

     Under the supremacy clause, federal law is supreme over state law in all areas of federal jurisdiction. Federal jurisdiction has steadily expanded since 1789. The Tenth Amendment reserves for the states and people any power not given to the federal government but the Constitution stretches the government's reach with a flexible grant of implied powers. Although Congress lacks the general police power granted to the states, it has often used its power to regulate commerce as a substitute. l

     Judicial review-that is the Supreme Court's power to declare any law unconstitutional-is a creation of case law, with a sound basis in the logic of the Constitution Judicial restraint counsels judges to avoid "unnecessary lawmaking, " while meeting the nation's changing needs. The historical development of the commerce power is a good example of how judicial interpretations change over time.

     The Bill of Rights (the first 10 amendments to the Constitution) and the Fourteenth Amendment limit federal and state power to restrict individual rights. The First Amendment guarantees freedom of speech and expression. Political speech is the most valued form of expression, but commercial speech that is truthful and describes a legal activity is also protected. The Fourth Amendment protects individuals and businesses against unreasonable searches and seizures.

     The Fifth and Fourteenth Amendments guarantee due process and equal protection of law in both state and federal jurisdictions. Due process means fundamental fairness in the way laws are applied and in what they proscribe. Procedural due process insures that no one will be deprived of liberty or property without notice and a hearing. Substantive due process refers to the fairness and wisdom of a legislative policy. Once relied upon by the Supreme Court to invalidate economic regulation, substantive due process is now invoked only in cases involving alleged legislative violations of fundamental constitutional rights. It requires that a law be a necessary means of serving a compelling state interest. The courts will generally defer to legislatures in reviewing laws that do not involve fundamental rights: such laws, including much economic regulations, need only be reasonably related to a legitimate state interest.

     The equal protection clause insures against discriminatory laws that single out special groups of individuals for special burdens or benefits. Certain legislative classifications, those based upon race, ethnicity, or religious affiliation are considered "suspect" by the Court and trigger a strict standard of judicial review similar to the standard used in substantive due process cases involving fundamental rights.