LAW AND LEGAL REASONING

Business Law Text and Cases, 15e Kenneth Clarkson, Roger LeRoy Miller

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CHAPTER 1

LAW AND LEGAL REASONING

ANSWER TO CRITICAL THINKING QUESTION

IN THE FEATURE

ETHICS TODAY—CRITICAL THINKING

When is the Supreme Court justified in not following the doctrine of stare decisis? The doctrine of stare decisis requires a court to adhere to precedent to promote predictability and consistency. To overcome the doctrine of stare decisis a precedent must be more than just wrongly decided. There has to be a special reason to overrule it. It is more likely that the Supreme Court waves the doctrine of stare decisis when issues unrelated to business are the focus of cases at bar. Specifically, issues that involve discrimination, freedom of speech, privacy, and so on are more likely to involve disregarding of the doctrine of stare decisis if the political atmosphere has changed since the original decision.

ANSWERS TO QUESTIONS IN THE PRACTICE AND REVIEW FEATURE

AT THE END OF THE CHAPTER

1A. Parties The automobile manufacturers are the plaintiffs, and the state of California is the defendant.

2A. Remedy The plaintiffs are seeking an injunction, an equitable remedy, to prevent the state of California from enforcing its statute restricting carbon dioxide emissions.

3A. Source of law This case involves a law passed by the California legislature and a federal statute; thus the primary source of law is statutory law.

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2 UNIT ONE: THE LEGAL ENVIRONMENT OF BUSINESS

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4A. Finding the law Federal statutes are found in the United States Code, and California statutes are published in the California Code. You would look in these sources to find the relevant state and federal statutes.

ANSWER TO DEBATE THIS QUESTION IN THE PRACTICE AND REVIEW

FEATURE AT THE END OF THE CHAPTER

Under the doctrine of stare decisis, courts are obligated to follow the precedents established in their jurisdictions unless there is a compelling reason not to. Should U.S.courts continue to adhere to this common law principle, given that our government now regulates so many areas by statute? Both England and the U.S. legal systems were constructed on the common law system. The doctrine of stare decisis has always been a major part of this system—courts should follow precedents when they are clearly established, excepted under compelling reasons. Even though more common law is being turned into statutory law, the doctrine of stare decisis is still valid. After all, even statutes have to be interpreted by courts.What better basis for judges to render their decisions than by basing them on precedents related to the subject at hand?In contrast, some students may argue that the doctrine of stare decisis is passé. There is certainly less common law governing, say, environmental law than there was 100 years ago.Given that federal and state governments increasingly are regulating more aspects of commercial transactions between merchants and consumers, perhaps the courts should simply stick to statutory language when disputes arise.

ANSWERS TO ISSUE SPOTTERS

AT THE END OF THE CHAPTER

1A. Under what circumstances might a judge rely on case law to determine the intent and purpose of a statute? Case law includes courts’ interpretations of statutes, as well as constitutional provisions and administrative rules. Statutes often codify common law rules. For these reasons, a judge might rely on the common law as a guide to the intent and purpose of a statute.

2A. After World War II, several Nazis were convicted of “crimes against humanity” by an international court. Assuming that these convicted war criminals had not disobeyed any law of their country and had merely been following their government’s orders, what law had they violated? Explain. At the time of the Nuremberg trials, “crimes against humanity” were new international crimes. The laws criminalized such acts as murder, extermination, enslavement, deportation, and other inhumane acts committed against any civilian population.These international laws derived their legitimacy from “natural law.” 3 / 4

CHAPTER 1: LAW AND LEGAL REASONING 3

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Natural law, which is the oldest and one of the most significant schools of jurisprudence, holds that governments and legal systems should reflect the moral and ethical ideals that are inherent in human nature. Because natural law is universal and discoverable by reason, its adherents believe that all other law is derived from natural law. Natural law therefore supersedes laws created by humans (national, or “positive,” law), and in a conflict between the two, national or positive law loses its legitimacy.The Nuremberg defendants asserted that they had been acting in accordance with German law. The judges dismissed these claims, reasoning that the defendants’ acts were commonly regarded as crimes and that the accused must have known that the acts would be considered criminal. The judges clearly believed the tenets of natural law and expected that the defendants, too, should have been able to realize that their acts ran afoul of it. The fact that the “positivist law” of Germany at the time required them to commit these acts is irrelevant. Under natural law theory, the international court was justified in finding the defendants guilty of crimes against humanity.

ANSWERS TO BUSINESS SCENARIOS AND CASE PROBLEMS

AT THE END OF THE CHAPTER

1–1A. Binding versus persuasive authority A decision of a court is binding on all inferior courts. Because no state’s court is inferior to any other state’s court, no state’s court is obligated to follow the decision of another state’s court on an issue. The decision may be persuasive, however, depending on the nature of the case and the particular judge hearing it. A decision of the United States Supreme Court on an issue is binding, like the decision of any court, on all inferior courts. The United States Supreme Court is the nation’s highest court, however, and thus, its decisions are binding on all courts, including state courts.

1-2A. Sources of law (a) The U.S. Constitution—The U.S. Constitution is the supreme law of the land. A law in violation of the Constitution, no matter what its source, will be declared unconstitutional and will not be enforced.(b) The federal statute—Under the U.S. Constitution, when there is a conflict between a federal law and a state law, the state law is rendered invalid.(c) The state statute—State statutes are enacted by state legislatures. Areas not covered by state statutory law are governed by state case law.(d) The U.S. Constitution—State constitutions are supreme within their respective borders unless they conflict with the U.S. Constitution, which is the supreme law of the land.

1-3A. Stare decisis Stare decisis is a Latin phrase meaning “to stand on decided cases.” In the King’s Courts of medieval England, it became customary for judges to refer to past decisions (precedents) in deciding cases involving similar issues. Over time, because of application of the doctrine of stare decisis to issues that came before the courts, a body of jurisprudence was formed that came to

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