The Nature of LawThe Resolution of Private Disputes

Business and The ConstitutionBusiness Ethics, Corporate Social

Responsibility, Corporate Governance, and Critical Thinking

© 2010 The McGraw-Hill Companies, Inc. All rights reserved.

The Nature of LawThe 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

© 2010 The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives

Types and sources of law Important legal doctrines Classification of law Jurisprudence and legal reasoning Statutory interpretation Limitations on judicial power

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Types and Classifications of Law

Federal, state, and tribal level: Constitution: establishes governmental

structure, specific rights and duties Example: U.S. Constitution

Statute: enacted by legislative body to regulate conduct Example: Clean Air Act, 42 U.S.C. §§

7401 et seq. (1970) Counties and municipalities enact

“ordinances” (e.g., zoning ordinance)1 - 4

Federal, state, and tribal level: Common Law: case law (judge-made)

Example: Gribben v. Wal-Mart Stores, Inc.

Administrative Law: agency rules to implement enforcement of statutes Example: U.S. Environmental Protection

Agency’s Identification and Listing of Hazardous Waste Rule, 40 CFR – Part 261, as amended, 73 FR 64760

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Types and Classifications of Law

Issued at the chief executive level: Executive Order: under limited powers

Examples: http://www.whitehouse.gov/news/orders/

Treaty: with other nations, by the U.S. president on behalf of the nation, ratified by the U.S. Senate Example: The Antarctic Treaty

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Types and Classifications of Law

Important Doctrines

Stare Decisis (let the decision stand) is the doctrine of precedent applied in common law Example: in Gribben v. Wal-Mart Stores,

the Indiana Supreme Court cited Cahoon v. Cummings for a well-established rule about intentional first-party spoliation of evidence

Equity is applied by the judiciary to achieve justice when legal rules would produce unfair results Examples: injunction or specific

performance1 - 7

Important Doctrines

Federal supremacy: a rule of priority for conflicts between laws that holds the U.S. Constitution is the supreme law of the land Supremacy Clause, Article VI, Section 2, of

the U.S. Constitution Practical meaning:

Federal law defeats state law A state constitution defeats state legislation A statute defeats an administrative

regulation A statute or regulation defeats common law

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Trentadue v. Gorton

Facts & Procedural History: Trial court decided that the common law

discovery rule applied to claims against corporate defendants for crime of an employee rather than statute of limitations and appellate court affirmed

Issue: Does a legislated rule (statute of limitations) abrogate a common law rule?

Holding: Yes; plain language of statute indicated legislative intent to exclude common law rules

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Classification of Law

Criminal law establishes duties to society Government charges

and prosecutes defendant, who is found guilty or innocent

A convicted defendant will be imprisoned or fined

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Classification of Law

Civil law establishes duties between private parties Plaintiff sues

defendant for monetary damages or equitable relief

A defendant will be held liable or not liable

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Classification of Law

Substantive law establishes rights and duties of people in society Example: The act of murder is a crime

Procedural law establishes how to enforce those rights and duties Example: A defendant charged with

murder has the right to a jury trial

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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, and property

laws

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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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Jurisprudence

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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Legal Reasoning

Basically deductive, with legal rule as major premise and facts as the minor premise Result is product of the two

Court may stand on precedent or distinguish prior case from current case If precedent inapplicable, new rule

developed

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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, and 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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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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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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General Dynamics Land Systems, Inc. v. Cline

Facts: Collective bargaining agreement

discriminated against workers under 50 years of age; plaintiffs over 40 and under 50 filed a claim under the Age Discrimination in Employment Act (ADEA)

Issue: Does the ADEA forbid “favoring the old

over the young?”1 - 20

General Dynamics Land Systems, Inc. v. Cline

Reasoning: Plain meaning of “age” within the

statute not clear, but legislative history makes clear that an employer may favor an older employee over a younger one

Holding: Judgment reversed in favor of employer

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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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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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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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Limitations on Judicial Power

Parties must have standing (direct interest in the outcome) to sue

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Whales, for example, do not have standing The Cetacean

Community v. Bush, 386 F.3d 1169 (9th Cir. 2004)

Global Business Environment

Courts may faced with treaty interpretation

U.S. Supreme Court interpreted The Warsaw Convention in Olympic Airways v. Husain

How would you have interpreted the treaty language?

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“The carrier shall be liable for damage sustained in the

event of the death or wounding of a passenger or

any other bodily injury suffered by a passenger, if the accident which caused

the damage so sustained took place on board the

aircraft or in the course of the operations of embarking

or disembarking.” Warsaw Convention, Art. 17

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 land1 - 27

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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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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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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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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