The fundamental law and legal system plays

In the world of commerce, the fundamental law and legal system plays an indispensable role. The rules, regulations, and policies governing the world of commerce are also in line with the principles laid down in the Constitution. Apart from that, the claims or legal battles in business are ruled by the country’s legal system. Further, the regulation of business is concomitant to the fundamental principle of police power and the public interest concerned. Further, since the business world is the very backbone of the country’s economy, the U. S.

Constitution deemed it regulated by the government in order to protect the people and also the businesses. In the recent series of bankruptcy that rocked the nation, the fundamental principle has been prevalently observed. The recession also moved the government to actively rescue the business that has been drowned by the financial crisis. In the recent news article entitled Claimants in G. M. Tort Cases are Denied, it stated that the car accident victims and asbestos claimants against the General Motors have been denied of their petition challenging the sale of the G. M. ‘s assets (The New York Times, 2009).

Meanwhile, the article is in relation to the bankruptcy case of General Motors and of Chrysler. The two filed bankruptcy cases due to their inability to maintain their financial capability and continuous loss. The sale of asset in favor of car owner company backed by the government has also been approved by Judge Robert Gerber of the Federal Bankruptcy Court (The New York Times, 2009). However, the petition of the claimants for the non- approval of the sale has been denied. According to the claimants, the taking over of the Treasury of the assets of GM will only create huge liabilities just like what they have experienced.

The denial of the claimants’ petition was grounded on the principle of hierarchy of courts and principle of jurisdiction. According to Justice Gerber, the petition should pass first before the Federal District Court before it is goes to the Court of Appeals. In reiterating their claims, a motion was filed asking Justice Gerber for his approval for the forwarding of the motion before the Court of Appeals; but which is otherwise opposed by the Treasury Department and the committee of unsecured creditors. In this article, it laid down the basic principles and the role of the government as mandated by the fundamental law of the land.

As has been said, the government has extended its support to these car companies experiencing financial loss or bankruptcy. During this time, the government is deemed to support the backbone of economy to prevent further financial loss. Besides, the business has the same protection and regulation from the government as with the other sectors in the society because of the public interest involved. This is significantly in line with the equal protection clause embodied in the Fourteenth Amendment of the Constitution (Find Law for Legal Professionals, 2009).

Under the said equal protection clause, the regulation or protection extended by the government to business is not only limited to regulation of prices, rates or nature of business but also the impact of the business on the economy. In the said article, the General Motors and Chrysler are necessary in the car industry and are helpful in the economic development. Apart from that, car industry also affects the employment of in the nation. Due to the extensive impact of car industry in the nation’s economy, the government needs to save it also from further downfall.

Another Constitutional principle involved in the article or issue about General Motors and the car industry is the government’s duty to protect the consumer. In upholding the interest of the business owners, it also needs to consider the interest of the consumers. In the case of General Motors, the sale of its assets and the taking over of Treasury of its assets are being challenged by the creditors and asbestos claimants (The New York Times, 2009). It can be inferred that there are two conflicting interests involved; the General Motors needs to file bankruptcy case and the needs of the claimants of assurance that G.

M. will fulfill their liabilities. In this particular case, the Bankruptcy court determines and rules the petition of both parties. Furthermore, the article also presents the principle of legal hierarchy and jurisdiction. The Federal Bankruptcy court said that the claimants should not appeal directly to the Court of Appeals because it would bypass the jurisdiction of the Federal District Court (The New York Times, 2009). In the litigation of legal claims, a particular case need be heard first in the lower court before it goes to higher court.

This way, the determination of the case and the issues involved will be streamlined and be decided in the lower court. This is to prevent the clogging of the dockets in the higher courts.


Find Law for Legal Professionals. (2009). Regulation of Business Enterprises: Rates, Charges, and Conditions of Service. Retrieved July 11, 2009, from http://caselaw. lp. findlaw. com/data/constitution/amendment14/04. html#2 The New York Times. (2009). Claimants in G. M. Tort Cases are Denied. Retrieved July 11, 2009, from http://dealbook. blogs. nytimes. com/2009/07/07/claimants-in-gm-tort- cases-are-denied/