Business Law Case Review Case Study

Excerpt from Case Study :

Tennessee Scrap Recyclers Association v. Bredesen, the court affirmed the law in question and upheld the state's ability to set the terms under which it would allow transactions regarding scrap metal to take place. The court noted that the problem the law was designed to thwart was a local issue and thus did not violate the Fifth Amendment's Commerce Clause (State law, 2009, Cengage). Also, the additional burdens imposed upon the scrap metal dealers were so minimal it did not affect their ability to participate in interstate commerce, nor did it give additional privileges to in-state dealers. "The government did not take possession of any property; it only regulated the method in which the business is lawfully transacted" and there was a compelling law enforcement issue at stake -- to prevent transactions in stolen merchandise (State law, 2009, Cengage).

Section 2

In the case of American Canine Foundation v. City of Aurora, Colorado, the ordinance banning pit bulls was deemed to be constitutional because owning a particular breed of dog is not a constitutional right (City may ban dangerous dog breeds, 2009, Cengage). The police have a reasonable need to monitor the public's "health, safety, and welfare" and the legislation passed was deemed to bear a rational relationship to "a legitimate legislative goal" (City may ban dangerous dog breeds, 2009, Cengage). There was compelling evidence presented by the city that the breed in question was associated with a higher rate of violent attacks than other breeds of dogs. This resulted in additional costs to the city which had to monitor the breeds for the purposes of animal control, as well as posed additional risks to the welfare of the public. "Since there was a rational basis for the regulation, it does not violate due process or the Equal Protection Clause" (City may ban dangerous dog breeds, 2009, Cengage). In other words, governing potentially dangerous property (and dogs under the law are considered property) does not stifle the owner's fundamental constitutional rights any more than prohibiting un-fenced in swimming pools or keeping livestock and other forms of property known to convey certain health and safety-related risks. Individual rights must be balanced against the needs of neighborhood safety.

Questions: Sections 1 & 2

What compelling governmental interests would have to exist for these laws to be sustained? How else could the government justify their enactment? How could the laws be modified so as not to be a deemed an unlawful seizure or taking?

In the case of Tennessee Scrap Recyclers Association v. Bredesen, the law was upheld by the court because of the compelling state interest to prevent transactions in illegal materials; in American Canine Foundation v. City of Aurora, Colorado the law was validated because of the need for the government to protect public safety. The government could also justify the laws existing as is (no modification needed based upon the rulings) given a state's right to restrict commerce and property rights in general -- the right to sell scrap metal and own dogs are not constitutionally-protected rights.

Explain why someone would say it is true that the Commerce Clause allows Congress to regulate almost anything that happens within states.

The Commerce Clause has been applied to a wide variety of aspects of business life, including civil rights violations. It is very difficult to find any aspect of commerce that exists purely within a single state since human beings (workers and customers) are capable of traveling over state lines.

How does the concept of a federal government with enumerated powers impact this?

By enumerating the government's powers the Constitution limits them: it says what the government can do and specifically says that if a power is not specifically extended to the federal government, the government cannot assume that it has such rights.

Read the 10th Amendment and explore what role it plays.

The 10th Amendment extends all rights not explicitly delineated in the Bill of Rights to the states. This means that the states have the right to restrict certain liberties that are not deemed to be inalienable rights under the Bill of Rights. In fact, until the passage of the Due Process clause of the 14th Amendment and the evolving notion of the incorporation of the Bill of Rights into state laws, the Bill of Rights only applied to the federal government not the states.

Should the federal government have unlimited or limited powers in your opinion?

Limiting the powers of the federal government is essential. Even with specifically enumerated powers, the federal government has at times ignored the need to protect individual liberties during times of national crisis such as the Civil War, World War I, and the Cold War. Given its power and the resources at its disposal, it is extremely easy for the federal government to impinge upon individual liberties and to justify this in the name of national security.

Section 3

In Public Citizen Health Research Group v. OSHA, industries affected by new regulations regarding chromium argued that the burdens placed upon them were too onerous, despite evidence that long-term exposure to chromium increased worker's risk of cancer. The new OSHA guidelines proposed to reduce the exposure of workers to the substance to better protect their health (Public Citizen Health Research Group v. OSHA, 2006, DOL). When setting standards, OSHA usually uses the standard that the costs of compliance must be less than 1% of the company's total revenues and 10% of its total profits although this admittedly was not feasible for several industries. For example, "stainless steel welding generally results in higher Cr (VI) exposures than carbon steel welding…because of the higher chromium content in the stainless steel alloy. Moreover, employees welding in confined and enclosed spaces are often exposed to higher concentrations of total welding fume, and therefore their overall Cr (VI) exposures tend to be higher than they would be in open spaces" (Public Citizen Health Research Group v. OSHA, 2006, DOL). The confined nature of the spaces in which the engineers operate make control additionally burdensome to the company.

The affected industries thus contested the regulation and also disagreed with the research OSHA had used linking specific exposure levels to certain cancers. However, in the eventual settlement, "OSHA will deem employers to be in compliance with the 'methods of compliance' section of the Chromium (VI) Standard if they use engineering and work practice controls to the extent feasible and supplement those controls with respirators to comply with the PEL" (Public Citizen Health Research Group v. OSHA, 2006, DOL). Feasibility is also the standard in regards to waste disposal regarding the carcinogen. "If because of the size, bulkiness, or cumbersome nature of the waste, it is infeasible to dispose of the waste in impermeable containers, an employer would not be required to dispose of the waste in this manner. However, an employer's determination in this regard would be subject to OSHA's agreement that containing the waste in such a manner is in fact infeasible" (Public Citizen Health Research Group v. OSHA, 2006, DOL). The overall ruling seems curious in regards to its set standard of infeasibility, given that it effectively allows certain industries not to protect their workers adequately from deadly carcinogens. In the future, should cancer arise in workers employed in the affected industries, it is hard not to think that lawsuits against these companies will not arise. Rather than place the burden on OSHA to prove feasibility, the burden should be on employers to make safe conditions feasible.

Section 4

The case of Lion Raisins, Inc. v. United States, is a good example of what is called the arbitrary and capricious test: after discovering several violations in Lion's business practices (false inspector's signatures, false moisture content, and illegally-altered raisin grades), the USDA continued to award contracts to the company. However, suddenly, the USDA changed its policy, awarded contracts to other raisin producers and suspended Lion for a year from participating in government contracts. When Lion brought charges for the loss of its profits from school lunches, "the court explained that the USDA abused its discretion when it determined that evidence of Lion's lack of integrity in April 1998, which was known to the agency as of May 1999, seriously and directly affected plaintiff's present responsibility as a Government contractor in . . . 2001. The USDA awarded plaintiff five contracts between the completion of its investigation in May 1999 and its decision to suspend plaintiff in January 2001. . . . By the USDA's own representations, it did so despite the possession of all the evidence that it would later use to suspend plaintiff" (Lion Raisins, Inc. v. United States, 2001, Cengage). This contradicted the claim that an immediate suspension was necessary to protect the interests of health and safety of the public and thus was deemed capricious.

Section 3 & 4

Did the agencies involved violate due process or other constitutionally-mandated safeguards?

In the case of OSHA, the agency was exercising its legitimate duties to protect the health…

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