2. 1
P
A
R
T
Foundations of American Law
• The Nature of Law
• The Resolution of Private Disputes
• Business and The Constitution
• Business Ethics, Corporate Social
Responsibility, Corporate Governance,
and Critical Thinking
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3. C H A P T E R
01
The Nature of Law
“The sacred rights of mankind . . . are written, as with a sun
beam in the whole volume of human nature, . . . and can
never be erased or obscured by mortal power.”
Alexander Hamilton, 1775
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4. Learning Objectives
• Identify sources and types of law
• Identify the law that has precedence
when laws conflict
• Differentiate criminal law from civil law
• Differentiate schools of jurisprudence
• Describe precedent (stare decisis)
• Explain major techniques of statutory
interpretation
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5. Types and Classifications of Law
At the federal, state, and tribal level:
•Constitutions: establish governmental
structure, specific rights and duties
– Example: U.S. Constitution
•Statutes: enacted by legislative body
to regulate conduct
– Example: Clean Air Act, 42 U.S.C. §§ 7401
et seq. (1970)
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6. Types and Classifications of Law
• Common law or case law is made and
applied by judges at the state level as
judges decide cases according to the
doctrine of precedent or stare decisis
(let the decision stand)
– Example: in the negligence case of Young
v. Beck, the court reviewed applicable law
and concluded that a long-standing
common law rule should remain in effect
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7. Types and Classifications of Law
• Equity is applied by state level judiciary
to achieve justice when common law
rules would produce unfair results
– Injunction: court forbids a party to do some
act or orders a party to perform an act
– Specific performance: party is ordered to
perform according to contract terms
– Reformation: court rewrites contract to reflect
intention of parties
– Recission: cancellation of the contract
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8. Types and Classifications of Law
• Administrative Regulations & Decisions:
made by state and federal agencies
that were created by statute and hold
delegated (granted) power
• Treaty: made with other nations, by the
U.S. president on behalf of the nation,
approved (ratified) by the U.S. Senate
– Example: The Antarctic Treaty
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9. Types and Classifications of Law
• Ordinance: made by subunits of state
governments (e.g., counties, cities) for
local issues, such as zoning
• Executive Order: issued by the U.S.
President or a state governor under
limited powers
– Example:
Executive Orders Disposition Tables Index
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10. Priority Rules
• Federal supremacy: a rule of priority for
conflicts between laws stating that the
U.S. Constitution is the supreme law
– Supremacy Clause, Article VI, Section 2, of
the U.S. Constitution
• Practical meaning:
– Federal law defeats state law
– State constitution defeats state legislation
– Statute defeats administrative regulation
– Statute or regulation defeats common law
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11. Trentadue v. Gorton
• Facts & Procedural History:
– Trial court decided that common law discovery
rule applied to claims against corporate
defendants for the crime of an employee rather
than a statute of limitations. Appellate court
affirmed and case appealed.
• Issue: Does a legislated rule (statute of
limitations) abrogate a common law rule?
• Holding: Yes. Plain language of statute
indicates a legislative intent to exclude
common law rules.
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12. Classification of Law
• Criminal law establishes
duties to society
– Government charges
and prosecutes
defendant, who will be
found guilty or innocent
– A convicted defendant
will be imprisoned or
fined
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13. Classification of Law
• Civil law establishes
duties and obligations
between private
parties
– Plaintiff sues defendant
for monetary damages
or equitable relief
– A defendant will be
held liable or not liable
for the plaintiff’s injury
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14. Classification of Law
• Substantive law establishes rights and
duties of people in society
– Example: A statute making murder a
crime is a substantive law
• Procedural law establishes how to
enforce those rights and duties
– Example: Rules for the proper conduct of
a trial are rules of procedural law
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15. Classification of Law
• Public law refers to the relationship
between governments and private
parties
– Examples: constitutional, statutory, and
administrative law
• Private law refers to the regulation of
conduct between private parties
– Examples: contract, tort, property, and
agency laws
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16. Jurisprudence
• Jurisprudence refers to the philosophy
of law as well as the collection of laws
• Legal positivism: law is the command
of a recognized political authority
– Just or unjust, law must be obeyed
• Natural law: universal moral rules bind
all people whether written or unwritten
– Unjust positive laws are invalid
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17. Jurisprudence
• American legal realism defines law as
the behavior of the judiciary as they
rule on matters within the legal system
– Thus law in action dominates positive law
• Sociological jurisprudence unites
theories that examine law within its
social context
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18. Functions of Law
• Peacekeeping
• Checking government power and
promoting personal freedom
• Facilitating planning and the realization of
reasonable expectations
• Promoting economic growth through free
competition
• Promoting social justice
• Protecting the environment
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19. Legal Reasoning
• Basically deductive, with legal rule as
major premise and facts as the minor
premise
– Result is product of the two
• Case law reasoning: Court may stand
on precedent or distinguish prior case
from current case
– If precedent inapplicable, new rule
developed
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20. Hagan v. Coca-Cola Bottling Co.
• Facts & Procedural History:
– Florida plaintiffs drank from bottle of Coke,
found foreign object, suffered emotional
distress, and brought suit for negligence
– Jury returned verdict for plaintiffs, judge
reduced jury award, & both parties appealed
– Certified question sent to Florida Supreme Court
• Question: Should the impact rule (physical injury
required to state a claim) be abolished or
amended in Florida?
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21. Hagan v. Coca-Cola Bottling Co.
• Court’s Reasoning:
– Reviewed facts and arguments of parties
– Reviewed application of impact rule within
Florida, including modifications to the rule
– Discussed public policy recognized by the
Florida Supreme Court in Doyle v. Pillsbury Co.
– Noted court decisions in other states
• Holding: Impact rule does not apply where
emotional damages are caused by conduct that
is a freestanding tort (e.g., contaminated food)
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22. Reasoning by Statutory Interpretation
• Plain meaning rule: court applies statute
according to usual meaning of the words
• Courts examine legislative history and
purpose when plain meaning rule is
inadequate
– Example A: Why does the Communications
Decency Act offer immunity for some entities?
– Example B: What is meant by a prohibition
against discrimination “because of an
individual’s age?”
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23. Federal Communications Commission v.
• Facts:
– Corporation challenged a Freedom of
Information Act request arguing that
Exemption 7(C), an unwarranted
invasion of personal privacy, applied to
the request and prevented disclosure
• Issue: whether corporations have
“personal privacy” for the purposes of this
exemption?
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24. Federal Communications Commission
v. AT&T, Inc.
• Reasoning:
– “Personal” not defined by the statute,
but “personal privacy” ordinarily refers
to individuals and the ordinary meaning
of the phrase should apply
• Holding:
– Corporations do not have “personal
privacy” for purposes of Exemption 7(C)
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25. Statutory Interpretation
• Courts may interpret a statute in light of
a general public purpose or public
policy
• Courts follow prior interpretation of a
statute (precedent) to promote
consistency
• Maxims may be used to assist in
statutory interpretation
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26. Statutory Interpretation
• Example of a maxim:
– Ejusdem generis (things of the same type)
– When general words follow specific
words, the general words are limited to
the same things as specific words
• “Automobiles and other vehicles” does
not include airplanes
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27. Limitations on Judicial Power
• Courts limited to deciding existing
cases or controversies
– In other words, the dispute must be
current and not yet resolved
– However, a declaratory judgment allows
parties to determine rights and duties
prior to harm occurring
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28. Limitations on Judicial Power
• Parties must have standing (direct
interest in the outcome) to sue
Whales, for example,
do not have standing
The Cetacean
Community v.
Bush, 386 F.3d
1169 (9th Cir. 2004)
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29. Global Business Environment
• Courts may faced with
treaty interpretation “The carrier shall be
liable for damage
sustained in the event of
• U.S. Supreme Court the death or wounding
of a passenger or any
interpreted The Warsaw other bodily injury
suffered by a passenger,
Convention in if the accident which
caused the damage so
Olympic Airways v. sustained took place on
board the aircraft or in
Husain the course of the
operations of embarking
• How would you have or disembarking.”
Warsaw Convention,
interpreted the treaty Art. 17
language?
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30. Test Your Knowledge
• True=A, False = B
– The Constitution, statutes, and case law
are sources of law in the United States
– Agency regulations, presidential orders,
and treaties are sources of law in the
United States
– Stare decisis refers to the doctrine of equity
– The Supremacy Clause states that the U.S.
Constitution is the supreme law of the land
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31. Test Your Knowledge
• True=A, False = B
– Civil law establishes the duties an
individual has to keeping a civil society
– Substantive law establishes how to
enforce the rights and duties of people in
society
– Jurisprudence refers to the philosophy of
law as well as the collection of laws
– Legal reasoning is basically inductive
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32. Test Your Knowledge
• Multiple Choice
– The plain meaning rule means that the
court applies a statute
a) according to the unique or special
meaning of words
b) according to usual meaning of the
words
c) according to public policy and
legislative purpose
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33. Test Your Knowledge
• Multiple Choice
– Courts are:
a) Limited to hearing existing cases or
controversies
b) Limited to hearing cases in which plaintiff
has standing (a direct interest in the
outcome)
c) Unlimited in types of cases they may hear
d) All of the above
e) Both A & B
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34. Thought Question
• What do you think the authors of the
U.S. Constitution would think about
current legal issues in our society?
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Notas do Editor
The links are to the U.S. Constitution from the House Documents Online via GPO Access, and to the Clean Air Act on the U.S. federal Environmental Protection Agency website.
The case of Young v. Beck involved a teenager (Young) who was injured in an automobile accident driven by teenager Beck. Young sued both the teenaged Beck and his parents under the “family purpose doctrine”: “[A parent] who furnishes an automobile for the pleasure and convenience of the members of his family makes the use of the machine for the above purposes his affair or business….” The case rose through the state court system to the Arizona Supreme Court, which decided that holding the parents liable for negligent acts of the teenager was a common law rule justly established for a public policy purpose.
The hyperlink is to the Handbook of the Antarctic Treaty System on the U.S. Department of State website.
The hyperlink is to the listing of executive orders on the U.S. Government archives.gov website.
This case concerns a 1986 rape and murder of a Michigan woman and subsequent wrongful death case filed by her daughter (Trentadue) on the basis of DNA evidence obtained in 2002. The DNA evidence led to the conviction and imprisonment of the perpetrator, Jeffrey Gorton. Trentadue sued Gorton’s parents, who had employed their son in their corporation. Several other defendants were also sued. The statute of limitations for a wrongful death cases established a three year time limit for filing claims, but applying the common law discovery rule would mean that the statute of limitations would begin in 2002 when the DNA evidence was established. The trial and appellate courts ruled in favor of the discovery rule, which would have allowed the case to go forward. However, the Michigan Supreme Court reversed the lower courts, following the statute of limitations rather than the common law discovery rule. This is an interesting case for discussion since many find the state Supreme Court’s ruling to be unfair. One might think that, since the case was filed 16 years after the murder and the DNA evidence led to the conviction and imprisonment of the perpetrator, the result seems more fair. However, the judge specifically stated that even if the killer had not been found, the three-year statute of limitations would stand. In Dec. 2010, the Michigan Supreme Court decided another case (Colaianni v. Stuart Frankel Development) concerning the discovery rule by dismissing it; this leaves the Trentadue decision stand.
The writings of Justice Oliver Wendell Holmes and Roscoe Pound, well-known legal philosophers, document sociological jurisprudence. Holmes wrote, “[t]he first requirement of a sound body of law is, that it should correspond with the actual feelings and demands of the community, whether right or wrong.”
The hyperlink is to the case opinion on the Florida Supreme Court website.
Example A refers to the question in Fair Housing Council of San Fernando Valley v. Roommate.com, LLC. The court discussed why “interactive service providers” were provided immunity under the statute and whether the particular defendant had gone beyond the purpose of the immunity so as to incur liability for its acts. Note that the opinion in the text is the rehearing by the Ninth Circuit en banc . The original decision was issued on May 15, 2007 by a three judge panel. The en banc court ruled 8-3 to uphold the original panel decision. Judge Kozinski wrote the majority opinion for the en banc decision and had also written the lead opinion in the three-judge panel ruling. For the original ruling, a number of computer service providers provided amicus curiae briefs: Amazon.com, Inc., America Online, Inc., Ebay Inc., Google Inc., Tribune Company, Yahoo! Inc., Netchoice and United States Internet Service Provider Association. According to the Electronic Frontier Foundation, a non-profit internet watchdog that submitted an amicus brief requesting rehearing, the decision was “a dangerous holding that endangered features like search customization and user feedback on interactive web services.” Example B is the General Dynamics case.
The hyperlink is to the case information and opinion on the Supreme Court of the United States Blog website.
Interestingly, the Supreme Court did not refer to their 2010 decision in Citizens United v. Federal Election Commission 558 U.S. 08-205 (2010). In Citizens United, the Supreme Court declared that a corporation has the right of freedom of speech as does a human person.
The hyperlink is to the case information and opinion on the Oyez.org website. The class should discuss the interpretation of the treaty language in light of the facts of the case. In the case, the deceased passenger had a condition that cigarette smoking made much worse. The passenger repeatedly requested to be moved away from the smoking section and the flight attendant refused. The passenger became very ill, walked to the front of the airliner to get fresh air and collapsed and died. The wife of the deceased filed a wrongful death action against the airline company. The district court found the company liable and the Ninth Circuit Court of Appeals affirmed. The Supreme Court interpreted “accident” to be an unexpected or unusual event. The Court also stated that, “for purposes of the ‘accident’ inquiry, a plaintiff need only prove that ‘some link in the chain was an unusual or unexpected event external to the passenger.’ ” The Court determined that the flight attendant’s repeated refusal to assist the deceased was an unusual or unexpected event within the meaning of the treaty’s language.
True True False. Stare decisis (to stand on the decision) refers to the doctrine of precedent. The doctrine of equity is applied by judges to achieve justice when legal rules would produce unfair results True
False. Civil law establishes duties between private parties. False. Substantive law establishes the rights and duties of people in society. Procedural law establishes how to enforce the rights and duties of people in society. True False. Legal reasoning is deductive.