Cases That Changed the Conduct of Business

Cases That Changed the Conduct of Business
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Cases That Changed the Conduct of Business
Part 1
1. McCulloch v. Maryland (1819)
In 1819, the state of Maryland passed a law which imposed taxes on all banks which are not chartered in the state. Being a national bank, the Second Bank of the United States was the only out-of-state bank in Maryland, hence it is the only subject of the new law passed by the state. James McCulloch, head of the branch, refused to pay the tax and was subsequently sued by the state. Maryland contended that it had the power to tax all business establishments that operated within its boundaries and that Congress does not have constitutional right to establish a national bank. McCulloch was convicted of the case and was forced to pay a fine, but he filed an appeal to the Supreme Court.
The Supreme Court determined that the Constitution does not explicitly state that the Congress had the power to create banks, but it had the capacity to "lay and collect taxes; to borrow money; to regulate commerce". In these functions, a bank presents a suitable instrument that can assist the government in collecting and disbursing revenue.
Through this ruling, the Supreme Court upheld national supremacy. It meant that no entity, government or otherwise, can impede decisions made by the national government which are deemed "necessary and proper". The impact of this law to business is that national banks were finally given mandate to operate which meant it had the capacity to affect business operations. Because national banks were originally chartered to ensure a sound national currency, whatever policies it imposes to guarantee its purpose has to be followed by businesses, even when they feel that it is already becoming "predatory" or unfair.
2. Gibbons v. Ogden (1824)
Thomas Gibbons and Aaron Ogden were owners of competing companies, which operated steamboats traversing the New Jersey-New York route. Ogden, who held a state license to operate as a monopoly asked the state to prevent Gibbons, who held a federal coasting license, from traversing the route. Gibbons lost twice in the New York courts but court rulings were reversed by the Supreme Court.
The case pointed out that states did not have control over interstate commerce, they did, however, have the power for economic regulation. It also had provisions which allowed the Congress to regulate activity of interstate commerce if it had a substantial effect to the economy. For businesses which operate in different states or transactions spanning different territories, they must be aware that regulations to their operations can come not only from the state, but also from Congress. Rulings released by the Congress about interstate commerce will affect the operation of such businesses.
3. Mapp v. Ohio (1961)
In this 1961 case, the Supreme Court provided the protection against "unreasonable searches and seizures" by the state and its agencies. Doliree Mapp, suspected of hiding a fugitive, refused entry to officers of the Cleveland Police Department when they failed to give her a search warrant. The police then forcibly opened the door and searched the entire house for the fugitive. No fugitive was found in the house but the officers then saw pornographic material in Mapp`s basement. Mapp was arrested for violating Ohio law that prohibited the possession of obscene material. She was then convicted on the basis of the evidence presented by the police. Mapp appealed to the Supreme Court contending that she should never been brought to trial because evidence against her were a result of an illegal and warrantless search. The US Supreme Court reversed the ruling of the lower courts.
While this was a case between an individual and the state, the exclusionary rule provided by this case applies to businesses as well. In instances when a business is sued, the government or its agencies must follow due process so that the evidence they present to court are valid. Even when complaints against a business can be concurred with different testimonies, government agencies cannot gather evidence from the business office without securing a search warrant.
4. Gideon v. Wainwright (1963)
In 1961, Earl Gideon was convicted of breaking and entering and petty larceny. He did not have a lawyer because he could not afford one. He did ask the state to provide him with an attorney claiming that the Sixth amendment entitles everyone to a legal counsel, but the Florida Circuit Court denied his request. While serving his sentence, Gideon studied law, which reaffirmed his belief that his right to legal representation was violated. He sent a letter to the U.S. Supreme Court asking them to hear his case. The Court ruled in his favor.
For businesses, it is important to realize whether they are the accuser or the accused, they will need to deal with lawyers who will do everything they can to benefit their client. Hence, it can be both an advantage and a disadvantage. Bankrupt business owners can be sure that their right to legal counsel will always be upheld so someone will always represent their case even when they cannot afford to pay for a good lawyer. Meanwhile, business owners who wish to sue someone will have to ensure that they have a good case because their granted without undergoing due process. Such a case will cost money and will affect a business` bottomline.
5. United States v. Nixon (1974)
The case against former President Richard Nixon is probably one of the most publicized of all landmark cases in the U.S. because it ultimately created a limit to the power of the U.S. presidency. Installing a tape-recording device at the Oval Office, prosecutors investigating the Water Gate scandal filed a petition to obtain subpoena ordering President Nixon to release taped conversations and meetings between the President and those indicted by the jury. The president filed a petition arguing for separation of powers; by granting the prosecutor`s petition, the judicial branch would be interfering with the function of the executi...