Commerce Clause

Article 1, Section 8, Clause 3 of the United States Constitution, known as the Commerce Clause, states that Congress has the exclusive authority to manage commerce between the states, with foreign nations, and Indian tribes. Courts and commentators have tended to discuss each of these three areas as a separate power granted to Congress. It is common to see the Commerce Clause referred to as "the Foreign Commerce Clause," "the Interstate Commerce Clause," and "the Indian Commerce Clause," each of which refers to the same single sentence in the constitution that covers all three.

The use of the Commerce Clause by Congress to justify its legislative power has been the subject of long, intense political controversy. Interpretation of the 16 words of the Commerce Clause has helped define the balance of power between the federal government and the states. As such, it has a direct impact on the lives of U.S. citizens.

The Tenth Amendment states that the federal government of the United States has only the powers specifically delegated to it by the Constitution. Other powers are reserved to the states, or to the people. The Commerce Clause is an important source of those powers delegated to Congress, and therefore its interpretation is very important in determining the scope of federal power in controlling innumerable aspects of American life.

Text

Article I, Section 8, Clause 1,3:

The Congress shall have power … To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;

History

The Founders' understanding of the word "commerce" is a subject of disagreement among scholars today.

Some scholars, such as Akhil Reed Amar, argue that although commerce means economic activity today, it had non-economic meanings in late eighteenth century English. For example, in eighteenth century writing one finds expressions such as "the free and easy commerce of social life" and "our Lord's commerce with his disciples." These scholars interpret interstate commerce to mean "substantial interstate human relations" and find this consistent with the meaning of commerce at the time of the writing of the Constitution. They also argue that this expansive interpretation makes more sense for the foreign and Indian commerce clauses as one would expect Congress to be given authority to regulate non-economic relations with other nations and with Indian tribes.

Other scholars, such as Robert H. Bork and Daniel E. Troy, argue that prior to 1887, the Commerce Clause was rarely invoked by Congress and therefore a broad interpretation of the word "commerce" was clearly never intended by the Founders. In support of this claim, they argue that the word "commerce," as used in the Constitutional Convention and the Federalist Papers, can be substituted with either "trade" or "exchange" interchangeably while preserving the meaning of the statements. They also point to Madison's statement in an 1828 letter that the "Constitution vests in Congress expressly … 'the power to regulate trade.'" ^[1]

Examining contemporaneous dictionaries does not neatly resolve the matter. For instance, the 1792 edition of Samuel Johnson's Dictionary of the English language defines the noun "commerce" narrowly as "[e]xchange of one thing for another; interchange of any thing; trade; traffick," but it defines the corresponding verb "to commerce" more broadly as "[t]o hold intercourse."^[2]

Early years (1800s-1930s)

Chief Justice John Marshall established a broad interpretation of the Commerce Clause.

Gibbons v. Ogden

The U.S. Supreme Court has seldom restrained the use of the commerce clause for widely varying purposes. The first important commerce clause-related decision was Gibbons v. Ogden, decided by a unanimous Court in 1824. The case involved conflicting federal and state laws: Thomas Gibbons had a federal permit to navigate steamboats in the Hudson River, while the other, Aaron Ogden, had a monopoly to do the same granted by the state of New York. Ogden contended that "commerce" included only buying and selling of goods and not their transportation. Chief Justice John Marshall rejected this notion. Marshall ruled that the power to regulate interstate commerce also included the power to regulate interstate navigation: "Commerce, undoubtedly is traffic, but it is something more–it is intercourse … [A] power to regulate navigation is as expressly granted, as if that term had been added to the word 'commerce' … [T]he power of Congress does not stop at the jurisdictional lines of the several states. It would be a very useless power if it could not pass those lines." Marshall added that Congress's power over commerce "is complete in itself, may be exercised to its utmost extent, and acknowledges no limitations other than are prescribed in the Constitution."

However, the court placed limits on what could be considered interstate commerce. It did not include "that commerce, which is completely internal, which is carried on between man and man in a State, or between different parts of the same State, and which does not extend to or effect other States."

Cherokee Nation v. Georgia

In Cherokee Nation v. Georgia (1831), the Supreme Court addressed whether the Cherokee nation is a foreign state in the sense in which that term is used in the Constitution. The Court provided a definition of "Indian tribe" that clearly made the rights of tribes far inferior to those of foreign states. In part the court said:

"Though the Indians are acknowledged to have an unquestionable, and, heretofore, unquestioned right to the lands they occupy, until that right shall be extinguished by a voluntary cession to our government; yet it may well be doubted whether those tribes which reside within the acknowledged boundaries of the United States can, with strict accuracy, be denominated foreign nations. They may, more correctly be denominated domestic dependent nations. They occupy a territory to which we assert a title independent of their will, which must take effect in point of possession when their right of possession ceases. Meanwhile, they are in a state of pupilage. Their relation to the United States resembles that of a ward to his guardian."

Laissez-faire approach

The expansive interpretation of the Commerce Clause was restrained during the late nineteenth and early twentieth centuries, when a laissez-faire attitude dominated the Court. In United States v. E. C. Knight Company (1895), the Supreme Court limited the newly-enacted Sherman Antitrust Act, which had sought to break up the monopolies dominating the nation's economy. The Court ruled that Congress could not regulate the manufacture of goods, even if they were later shipped to other states. Chief Justice Melville Fuller wrote, "commerce succeeds to manufacture, and is not a part of it."

The court took a more formalistic approach, which distinguished between manufacturing and commerce, direct and indirect effects on commerce, and local and national activities. While Congress had the power to regulate commerce, it could not regulate manufacturing, which was seen as being entirely local. In Swift v. United States (1905), the Court ruled that the clause covered meatpackers; although their activity was geographically "local," they had an important effect on the "current of commerce," and thus could be regulated under the Commerce Clause. The Court's decision halted price fixing. Stafford v. Wallace (1922) upheld a federal law (the Packers and Stockyards Act) regulating the Chicago meatpacking industry, because the industry was part of the interstate commerce of beef from ranchers to dinner tables. The stockyards "are but a throat through which the current [of commerce] flows," Chief Justice Taft wrote, referring to the stockyards as "great national public utilities."

The court would also examine the purpose behind the creation of the law, and would invalidate otherwise valid federal regulations if the purpose was to have an affect on something which was outside of the scope of the Commerce Clause.

New Deal

The U.S. Supreme Court sometimes ruled New Deal programs unconstitutional on the grounds that they stretched the meaning of the commerce clause. In Schechter Poultry Corp. v. United States (1935), the Court unanimously struck down industrial codes regulating the slaughter of poultry, declaring that Congress could not regulate commerce relating to the poultry, which had "come to a permanent rest within the State." As Chief Justice Charles Evans Hughes put it, "so far as the poultry here in question is concerned, the flow of interstate commerce has ceased." Judicial rulings against attempted use of Congress's Commerce Clause powers continued during the 1930s.

It was only in 1937 that the Supreme Court gave up the laissez-faire doctrine as it decided a landmark case, National Labor Relations Board v. Jones & Laughlin Steel Company. The legislation in question, the National Labor Relations Act, prevented employers from engaging in "unfair labor practices" such as firing workers for joining unions. The Court ruled to sustain the Act's provisions only after Pres. Franklin D. Roosevelt's introduced his Court Packing scheme.

Conflict over the meaning of the clause had led to a showdown between the U.S. Supreme Court and the Administration. After winning the 1936 election, Roosevelt proposed a plan to appoint an additional justice for each sitting Justice over age 70. Given the age of the current justices, this permitted a court population of up to 15. Roosevelt claimed that this was not to change the rulings of the Court, but to lessen the load on the older Justices, who he claimed were slowing the Court down.

There was widespread opposition to this "court packing" plan, but in the end the New Deal did not need it to succeed. In what became known as "the switch in time that saved nine," Justice Owen Josephus Roberts and Chief Justice Charles Evans Hughes switched sides in 1937 and, in National Labor Relations Board v. Jones & Laughlin Steel Corporation, upheld the National Labor Relations Act, which gave the National Labor Relations Board extensive power over unions across the country. This change in the Court's decisions is often referred to as the Constitutional Revolution of 1937. This expansion continued largely unabated until United States v. Lopez (1995).

The Court, returning to the theories propounded by John Marshall, ruled that Congress could pass laws regulating actions that even indirectly influenced interstate commerce. Further decisions expanded the Congress's powers under the commerce clause. The New Deal Court drastically expanded the scope of the Commerce Clause. When examining whether an action could be considered "commerce," the Court would aggregate the total effect the activity would have on commerce. Intrastate activities fell within the scope of the Commerce Clause if those activities would have any rational effect on interstate commerce. Finally, the 10th Amendment "is but a truism" U.S. v. Darby ([1941]) and was not considered to be an independent limitation on Congressional power.

In 1941 the Court upheld the Fair Labor Standards Act which regulated the production of goods shipped across state lines. In Wickard v. Filburn (1942), the Court upheld the Agricultural Adjustment Act, stating that the act of growing wheat on one's own land, for one's own consumption, affected interstate commerce, and therefore under the Commerce Clause was subject to federal regulation.

Civil rights

The wide interpretation of the scope of the commerce clause continued following the passing of the Civil Rights Act of 1964, which aimed to prevent business from discriminating against black customers. In Heart of Atlanta Motel v. United States (1964), the Court ruled that Congress could regulate a business that served mostly interstate travelers; in Katzenbach v. McClung (1964) the Court ruled that the federal government could regulate Ollie's Barbecue, which served mostly local clientele but sold food that had previously moved across state lines; and in Daniel v. Paul (1969), the Court ruled that the federal government could regulate a recreational facility because three out of the four items sold at its snack bar were purchased from outside the state.

The Rehnquist Court

In the 1990s, the Court acted to restrain Congress's exercise of its power to regulate commerce. In United States v. Lopez, (1995) the Court found that Congress could not exercise "Police power" reserved to the States by use of the Commerce Clause. Chief Justice William H. Rehnquist delivered the opinion of the Court in United States v. Lopez (later clarified by United States v. Morrison). There, the Court ruled that Congress had the power to regulate only

• the channels of commerce,
• the instrumentalities of commerce, and
• action that substantially affects interstate commerce

Thus the federal government did not have the power to regulate relatively unrelated things such as the possession of firearms near schools, as in the Lopez case. This was the first time in 60 years, since the conflict with President Franklin Roosevelt in 1936-1937, that the Court had overturned a putative regulation on interstate commerce because it exceeded Congress's commerce power. Justice Clarence Thomas, in a separate concurring opinion, argued that allowing Congress to regulate intrastate, noncommercial activity under the Commerce Clause would confer on Congress a general “police power” over the Nation.

The Court found in Seminole Tribe v. Florida, 517 U.S. 44 (1996) that, unlike the Fourteenth Amendment, the Commerce Clause does not give the federal government the power to abrogate the sovereign immunity of the states.

Many described the Rehnquist Court's commerce clause cases as a doctrine of "new federalism." The outer limits of that doctrine were delineated by Gonzales v. Raich (2005), in which Justices Scalia and Kennedy departed from their previous positions as parts of the Lopez and Morrison majorities to uphold a federal law regarding marijuana. The court found the federal law valid, although the marijuana in question had been grown and consumed within a single state, and had never entered interstate commerce. The court held that Congress may regulate a non-economic good, which is intrastate, if it does so as part of a complete scheme of legislation designed to regulate interstate commerce.

References

ISBN links support NWE through referral fees

• Leuchtenburg, E. 1996. The Supreme Court Reborn: The Constitutional Revolution in the Age of Roosevelt. Oxford University Press. ISBN 0195111311
• Ryerson, James, 2005-11-06. "America's Constitution: A Liberal Originalist." The New York Times Magazine. Retrieved 2008-05-01. ISSN 0028-7822

External links

All links retrieved January 7, 2024.

• P.A. Madison, How States & Nations Regulated their Commercial Intercourse.federalistblog.

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