The Common Law

Edinburgh Summer Program in Business Law: 2008 •Roll •Course requirements / grading • exams • participation • briefing cases • powerpoint •Today UT-Austin Edinburgh Summer Program 2008 Sources of Law What is law? Rules that govern behavior, assign rights and responsibilities between people, between people and government. What does law have to do with business? • facilitates business transactions, how? • constrains or restricts business, how? UT-Austin Edinburgh Summer Program 2008 Sources of Law TODAY sources of law • • • • • • Terminology / classifications of law Common law: how it works Statutory law and legislation The Constitution Government agencies / Administrative Law International Law UT-Austin Edinburgh Summer Program 2008 Classifications of Law Criminal Law Dangerous vs. ―Civil‖ Law behavior outlawed by society Government Regulates Victim, rights and duties of parties not government brings suit Guilt prosecutes accused Guilt is determined or fine is not determined is Punishment imposed Compensation ordered UT-Austin Edinburgh Summer Program 2008 Classifications of Law (cont’d) Substantive Law the rights of the people Defines vs. Procedural Law Establishes processes for settling disputes Public Law Sets vs. Private Law the duties of government to its citizens duties between individuals Regulates UT-Austin Edinburgh Summer Program 2008 Classifications of Law Common Law Systems Rules vs. ―Civil‖ Code Systems All emerge from individual decisions Judge legal rules emanate from statutes No seeks to resolve disputes; not make rules governing future behavior judge-made law, except … UT-Austin Edinburgh Summer Program 2008 Courts Federal Courts U.S. Supreme Court Circuit Courts of Appeal U.S. District Court State Courts Supreme Court Appellate Level Trial Courts How do we determine which courts have jurisdiction over which kinds of cases? UT-Austin Edinburgh Summer Program 2008 Trials Plaintiff/prosecutor  complaint/indictment Defendant  answer / plea – motion to dismiss Discovery  depositions, interrogatories document production – summary judgment Settlement Trial: • plaintiff/prosecution case first, defendant second • directed verdict • rules of evidence Verdict  j.n.o.v. Appeals UT-Austin Edinburgh Summer Program 2008 ADR • Arbitration • Mediation UT-Austin Edinburgh Summer Program 2008 The Common Law: what is it? UT-Austin Edinburgh Summer Program 2008 The Common Law: what is it?      Judge-made law; made up of all the decisions made by appellate courts. Two hundred years ago, almost all law was common law; most new law is statutory. Common law predominates in tort, contract, and agency law; it is important in property and employment law. Based on stare decisis, meaning ―let the decision stand‖ (previous decisions are generally upheld in similar cases.) Incorporates predictability and flexibility. UT-Austin Edinburgh Summer Program 2008 The Common Law: what is it?    Decisions are made case-by-case. Decision rules come from prior cases. Courts/judges look for ―precedent‖ UT-Austin Edinburgh Summer Program 2008 Precedent Earlier case deciding same issue  ―Controlling precedent‖ is a decision on the issue made by a higher court  Precedent can be:  Followed  Distinguished, or  Overruled: Beattie v. Beattie  UT-Austin Edinburgh Summer Program 2008 Find the Rule What number comes next? 2, 3, 5, . . . ? UT-Austin Edinburgh Summer Program 2008 UT-Austin Edinburgh Summer Program 2008 Finding Common Law Rules Judges decide cases and resolve disputes. They don’t always announce general decision rules. Others must look at prior cases and try to discern the rules that apply. • Why not establish general rules for others to follow? UT-Austin Edinburgh Summer Program 2008 ADVANTAGES: Flexibility & Stability Stare decisis makes common law stable. Common law evolves slowly when precedent is distinguished and overruled, rather than followed. UT-Austin Edinburgh Summer Program 2008 Statutory Law Most new law is statutory, that is, it is legislation passed by either a state legislature or the Congress of the United States. Citizens who vote have some control over statutory law. We elect the state congressional representatives and the United States Senators and Representatives. Does legislation represent the ―majority will‖? UT-Austin Edinburgh Summer Program 2008 How New Laws are Made Any member of Congress (Senator or Representative) can initiate a bill, or proposed law. A bill is debated in a committee in the house where it was introduced. From the committee, it goes to the full house for a vote. If it passes both houses this way, it goes to the President for his signature. A President’s signature turns a bill into law. UT-Austin Edinburgh Summer Program 2008 LEGISLATION EXERCISE Each of you represents a constituency, AND Each of you is a member of a political party, either the majority party or the minority party Your goal is to try to score points by securing the outcome that best suits your constituents (according to the rules of the game) UT-Austin Edinburgh Summer Program 2008 LEGISLATION EXERCISE Only options: • Bill without either amendment • Bill with CO2 amendment only • Bill with both the CO2 and Tradeable Permit amendments Your goal: try to achieve the outcome that yield the most points for you (i.e., makes your constituents happiest). UT-Austin Edinburgh Summer Program 2008 UT-Austin Edinburgh Summer Program 2008 ―Cycling‖ in Legislatures Three coalitions: 1, 2, 3 Three alternative policies: A, B, and C Preference distribution Coalition 1 Coalition 2 Coalition 3 A B C B C A C A B UT-Austin Edinburgh Summer Program 2008 Statutory Interpretation ―Logrolling‖  Is there such a thing as a proper legislative intent and an improper intent? Should courts be faithful to improper legislative intent? How do courts decide what Congress meant when the meaning of the statute is debatable? UT-Austin Edinburgh Summer Program 2008 Statutory Interpretation Sometimes wording is ambiguous, either by oversight, or intentional -- as a compromise. Why might ambiguity be intentional? When a statute has more than one possible meaning, what factors should guide the court in its interpretation? • Dictionary definitions • Intent of enacting Congress? Current Congress? • Purpose of statute • Public policies • Report of legislative committee • Individual legislators’ comments about meaning of statute UT-Austin Edinburgh Summer Program 2008 Who Decides What Statutes Mean? Congress and the President enact a law The law charges an administrative agency with the task of implementing the statute Disputes over the meaning of the statute are resolved by courts UT-Austin Edinburgh Summer Program 2008 UT-Austin Edinburgh Summer Program 2008 Constitutional Law The ultimate ―source‖ of American law is the Constitution, which delineates the powers of governmental actors and the people. UT-Austin Edinburgh Summer Program 2008 Division of power in both Constitutions—vertical and horizontal  Separation of Powers – Horizontal division of federal government power  Federal government is divided into three branches -- Executive, Legislative, and Judicial.  the U.S. TheFederalism --The Presidentnational government’s courts can rule Congress can a The President Congress can can Congress has to power is limited to only the issues listed in Article I, law unconstitutional, appoint federal pass statutes, can veto a bill, approve the veto, override a §8. but... but... Remainder reserved to states. judges, but... but... President’s nominee... but... Individual Rights -- rights of citizens against government. UT-Austin Edinburgh Summer Program 2008  Federalism & the Commerce Clause: Article I, Section 8 “The Congress shall have Power . . . To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes . . .” • Congressional regulations of areas traditionally within state ―police power‖ must be tied to the regulation of commerce. • Substantial Effect Rule -- Congress may regulate any activity which has a substantial economic effect on interstate commerce. UT-Austin Edinburgh Summer Program 2008 The ―Dormant‖ Commerce Clause States may regulate commerce in its own borders, but what if a state tries to regulate commerce across state borders?   Garbage cases Granholm v. Heald Why do courts interpret the U.S. Constitution to limit state power in this way? UT-Austin Edinburgh Summer Program 2008 Federalism and the Supremacy Clause: Article VI ―This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land . . .‖ UT-Austin Edinburgh Summer Program 2008 Conflict between national and local law: EXAMPLE Company A wants to build a hazardous waste incinerator in Mobile Alabama. The people of Mobile don’t want the incinerator there, but the Company has obtained the required permit for hazardous waste incinerators from the U.S. Environmental Protection Agency. The Mobile City Council passes an ordinance banning hazardous waste incinerators within the city limits. UT-Austin Edinburgh Summer Program 2008 Executive Power  Article II defines the powers and responsibilities of the President -- in general he is to enforce the nation’s laws.  Appointment -- The president nominates federal judges (including Supreme Court Justices) and heads of most administrative agencies.  Legislation -- The president and his advisors can propose bills to Congress and the president can veto bills from Congress.  Foreign Policy -- The president coordinates international efforts, negotiates treaties and is the Commander in Chief of the military, but he may not declare war. UT-Austin Edinburgh Summer Program 2008 Protected Rights: Free Speech The First Amendment of the U.S. Constitution states, ―Congress shall make no law… abridging the freedom of speech.‖  Speech includes non-verbal communication, such as signs, symbols and acts (like flagburning).  Political speech -- about a politician or political process is protected, and can be found illegal only if it is intended and likely to promote lawless conduct. Reasonable ―time, place and manner‖ regulation is permitted. UT-Austin Edinburgh Summer Program 2008 Protected Rights: Free Speech    Obscenity is not protected by the Constitution. Commercial speech -- designed to propose a commercial transaction -- is regulated more strictly than other speech and may be outlawed if false or misleading. Bad Frog Brewery v. NYS Liquor Auth. UT-Austin Edinburgh Summer Program 2008 Property Rights 5th Amendment prohibits taking private property for public use without providing ―just compensation.‖   Regulatory takings Penn Central test and the Lucas test UT-Austin Edinburgh Summer Program 2008 UT-Austin Edinburgh Summer Program 2008 Administrative Law Federal agencies such as the Federal Aviation Agency (FAA) and the Federal Trade Commission (FTC) and the Bureau of Land Management, all have the power to make regulations which affect citizens and businesses. Agencies were -- and are -- created to fulfill a need. Someone needs to oversee changing technologies and practices and their effects on society. An agency is created when Congress passes enabling legislation, which describes a problem and defines the agency’s powers. Agencies often have considerable power in their areas of specialty, sometimes leading to controversy. The Administrative Procedure Act regulates how agencies operate, in an attempt to reduce the controversy. UT-Austin Edinburgh Summer Program 2008 Administrative Law Rulemaking • Hemp Industries v. DEA Adjudication Judicial deference to agency decisions • US v. Mead Corp. UT-Austin Edinburgh Summer Program 2008 International Law What is international law?  Treaties (e.g., Law of the Sea; GATT), and  Rules developed by international organizations created by treaties (e.g., U.N.; WTO) How is international law enforced? Is it different in some fundamental way from other ―sources‖ of law like constitutions, statutes, regulations, and common law? UT-Austin Edinburgh Summer Program 2008 International Law   GATT/WTO Regional Agreements  NAFTA – free trade  EU – trade plus ―ever closer union‖ Do member states give away their sovereignty when they join arrangements like these? If so, how? UT-Austin Edinburgh Summer Program 2008 International Law Unlike federal or state statutory law, judgemade common law, or administrative law, international law is not created by a sovereign. That is, international laws are not effective until ratified by sovereign national governments. However, their indirect effect (through national enforcement) can be significant and profound. UT-Austin Edinburgh Summer Program 2008 International Law Act of state doctrine Sovereign immunity UT-Austin Edinburgh Summer Program 2008