Question:

Find the subject of Contemporary Business Law

This is for an individual paper.

Resource: Case Brief Cipollone v. Liggett Group, Inc., et al. in Ch. 2, section 2-6, "Commerce Powers," of the text.

Write a 700- to 1,050-word paper in which you define the functions and role of law in business and society. Discuss the functions and role of law in your past or present job or industry. Properly cite at least two references from your reading.

• Commerce Powers

• Congress's broadest power is derived from the Commerce Clause whereby Congress is given the power to "regulate Commerce among the several states."5 Under the modern trend, federal courts have been largely deferential to legislative decisions under Congress's commerce powers. Despite some limits placed by the U.S. Supreme Court in the relatively recent past, Congress still exercises very broad powers to pass laws where the activity being regulated affects interstate commerce in any way.

• Application of Commerce Powers

• Congress exercises its commerce powers in various forms. However, the direct and broad power to regulate all persons and products related to the flow of interstate commerce is the fundamental source of its authority.

• Interstate versus Intrastate Commercial Activity

• Congress has the express constitutional authority to regulate (1) channels of interstate commerce such as railways and highways, (2) the instrumentalities of interstate commerce such as vehicles used in shipping, and (3) the articles moving in interstate commerce. Even for commercial activity that is purely intrastate (takes place within one state's borders), Congress has the power to regulate the activity so long as it has a substantial economic effect on interstate commerce.

For example, suppose that Congress passes the Whistleblower Act, a statute that prohibits any business engaged in interstate commerce from firing their employees for reporting safety violations. Steel Co., a West Virginia company, begins to engage in a pattern of firing all employees who report safety violations.

When a government agency files a civil lawsuit against Steel Co. to enforce the Whistleblower Act, Steel Co. defends that the act is unconstitutional because the activity of firing their employees is purely within the state of West Virginia and not related to interstate commerce.

A court would likely find that if Steel Co. had any commercial activity at all (such as shipping, warehouses, equipment, advertising, or importing) that is outside of West Virginia, Congress has the authority to regulate Steel Co.'s workplace policies.6 In the dynamics of the modern-day commercial world, a large amount of seemingly intrastate activity has some degree of economic effect on interstate commerce.

Based on the landmark Supreme Court case of NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937). This was the first modern case where the Supreme Court began to broaden its interpretation of Congress's commerce powers. The groundwork for this expansion was laid out in Gibbons v. Ogden, 9 Wheat. 1 (1824) in which the Court recognized a more wide-ranging view of congressional power to regulate commerce.

Case 2.1. Cipollone v. Liggett Group, Inc., et al., 505 U.S. 504 (1992)

Fact Summary

Cipollone brought suit against Liggett for violation of several New Jersey consumer protection statutes alleging that Liggett (and other cigarette manufacturers) were liable for his mother's death because they engaged in a course of conduct including false advertising, fraudulently misrepresenting the hazards of smoking, and conspiracy to deprive the public of medical and scientific information about smoking.

Liggett urged the court to dismiss the state law claims contending that the claims related to the manufacturer's advertising and promotional activities were preempted by two federal laws: (1) the Federal Cigarette Labeling and Advertising Act of 1965, and (2) the Public Health Cigarette Smoking Act of 1969.

Synopsis of Decision and Opinion

The U.S. Supreme Court ruled against Cipollone, holding that his claims relying on state law were preempted by federal law.

The Court cited both the text of the statute and the legislative history in concluding that Congress's intent in enactment of the laws was to preempt state laws regulating the advertising and promotion of tobacco products.

Because Congress chose specifically to regulate a certain type of advertising (tobacco), federal law is supreme to any state law that attempts to regulate that same category of advertising.