The Commerce Clause

1
The Commerce Clause

• The Secret Weapon of the United States Congress

Elderhostel September 29, 2006 Artemus
Ward Department of Political Science Northern
Illinois University
2
The Articles of Confederation

• A strong impetus for calling the Constitutional
  Convention of 1787 was the need for national
  controls over the nations commerce, which had
  become chaotic under the weak Articles of
  Confederation.
• Many states had erected barriers to interstate
  trade in an effort to protect business enterprise
  for its own citizens.

3
The Constitution Article I, Section 8

• The Congress shall have Power . . . . To
  regulate Commerce . . . among the several
  states.

4
Gibbons v. Ogden (1824)

• New York granted a monopoly on steamship
  navigation in its waters to Ogden. However, the
  United States granted navigation rights to
  Gibbons under its Commerce Clause authority.
• Chief Justice John Marshall spoke in broad,
  expansive language in upholding the national
  license. He said that commerce is not simply
  traffic but intercourse that included
  navigation. He held that federal power is
  complete in itself and acknowledges no
  limitations, other than are prescribed in the
  Constitution. The word among, means
  intermingled with and thus commerce among the
  states does not stop at state boundaries but may
  be introduced into the interior.
• Still, he did recognize state autonomy, declaring
  that the clause did not comprehend commerce which
  is completely within a state and which does not
  extend to or affect other states.

5
Congress Flexes Its Muscle

• In the 60 years after Gibbons the national
  government rarely resorted to its Commerce Clause
  authority for national regulations of any kind.
• The Interstate Commerce Act of 1887 regulated the
  railroads by establishing the Interstate Commerce
  Commission (ICC).
• In the Shreveport Rate Cases (1914) the Supreme
  Court upheld the ICCs power to order intrastate
  lines to charge the same rates as interstate
  carriers. The Court observed that wherever the
  interstate and intrastate transactions of
  carriers are so related that the government of
  the one involves the control of the other, it is
  Congress and not the State, that is entitled to
  prescribe the final and dominant rule.

6
United States v. E.C. Knight Co. (1895)

• Sherman Antitrust Act (1890) Prohibited
  monopolies.
• The U.S. attempted to dissolve a sugar processing
  monopoly by the American Sugar Refining Co. which
  controlled 98 of the industry.
• The Supreme Court held that sugar processing was
  a local enterprise, occurring totally within one
  state. The fact that it was manufactured for
  export to other states was irrelevant.

7
Swift Co. v. United States (1905)

• The Court began to retreat from the rigid
  transportation-manufacturing distinction.
• The agreed unanimously that a price-fixing
  arrangement among meat packers, although done
  locally, was a restraint on commerce.
• Articulating a stream of commerce theory, the
  Court emphasized that the movement of cattle from
  one state to another for meat processing and
  subsequent shipment of meat to other parts of the
  country constituted a typical, constantly
  recurring course, a current or stream of
  commerce, and the effect of local price-fixing on
  interstate commerce was not accidental,
  secondary, remote, or merely probable.

Justice Oliver Wendell Holmes, Jr.
8
Hammer v. Dagenhart (1918)

• With the purpose of outlawing child labor,
  Congress enacted a statute in 1916 prohibiting
  the shipment in interstate commerce of products
  made in factories or mines by children under 14.
• The Court declared that the evil of child labor
  involved manufacturing, was local in nature, and
  was thus outside of the reach of Congress.
• Congress did not seek to regulate business during
  the roaring 20s. However after the Great
  Depression and the election of FDR, Congress once
  again sought to use the Commerce Clause.

9
Schechter Poultry v. United States (1935)The
Sick Chicken Case

• The National Industrial Recovery Act (1933)
  authorized the president to establish industrial
  codes of fair competition including the
  regulation of wages and hours.
• Schechter imported chickens from out of state but
  sold them locally. They were cited for violating
  the new poultry code for selling an unfit
  chicken.
• The Court held that the Schechters business was
  purely local and had only an indirect and remote
  effect on commerce.
• The Court regularly struck down similar New Deal
  programs during the first term of FDRs
  presidency.

10
Court-Packing Plan

• Claiming that the Court was overworked and filled
  with justices who were too old to keep up with
  the load, FDR proposed to add one new justice to
  the Court for every one over age 70. Though the
  plan was immediately seen as an attempt to meddle
  with the Court for political reasons and had
  little chance of passage, it became clear that
  the New Dealers were intent on pressuring the
  Court to shift gears and uphold the New Deal.

11
NLRB v. Jones Laughlin Steel (1937)

• The National Labor Relations Act (1935)
  guaranteed collective bargaining to all employees
  engaged in the production of goods for interstate
  commerce and set up a National Labor Relations
  Board to regulate business-labor relations.
• In a major shift, the Court upheld the Act
  abandoning the local manufacturing and indirect
  effects distinctions. Now, any activity affecting
  commerce could be regulated.

12
United States v. Darby Lumber (1941)

• The Supreme Court upheld the Fair Labor Standards
  Act (1938) which barred the use of interstate
  commerce to goods made by workers who were not
  paid a minimum wage of forty cents and hour and
  guaranteed a forty-hour work week.
• Overruled Hammer v. Dagenhart (1918).

13
Wickard v. Filburn (1941)

• The Second Agricultural Adjustment Act (1938)
  regulated agricultural production affecting
  interstate commerce by, among other things,
  setting quotas for farmers.
• Filburn grew wheat only for his own consumption
  and for the animals on his farm. When he exceeded
  his quota, the government fined him.
• The Supreme Court unanimously sided with the
  government reasoning that since over 20 of the
  nations wheat was grown for home consumption,
  the overall demand for wheat was less, thereby
  depressing the market.
• If individual behavior, taken in the aggregate,
  has a substantial economic effect on the
  market, then it can be reached by the government
  under the commerce clause authority.

14
The New Deal Regime

• During the 50 years since Wickard, Congress
  expanded national regulation into myriad aspects
  of national life, using the Commerce Clause as
  the constitutional base, all with the Supreme
  Courts approval.
• For example, the 1964 Civil Rights Act prohibits
  racial discrimination in public accommodations
  such as motels, hotels, restaurants, gas
  stations, movie theaters, etc. throughout the
  country.
• In Heart of Atlanta Motel v. United States (1964)
  the Supreme Court upheld the act reasoning that
  racial discrimination has a substantial negative
  effect on the economy.

15
The New Right Regime

• In a series of recent cases, a much more
  conservative Supreme Court has put the breaks on
  Congress Commerce Clause power.
• For example, in United States v. Lopez (1995),
  the Court held 5-4 that Congress could not pass
  the Gun Free School Zones Act. They reasoned that
  the Commerce Clause only allows regulation of
  economic activity and guns in schools was not
  economic in nature.
• Similarly, in United States v. Morrison (2000)
  the 5-4 Court struck down the civil rights
  portions of the Violence Against Women Act, which
  allowed women to bring civil suits in federal
  courts for rape and other violent acts. Again,
  the Court reasoned that violence against women
  was not an economic activity.

Chief Justice William H. Rehnquist
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Gonzales v. Raich (2005)

• The Court held 6-3 that Congress, through the
  Controlled Substances Act, may ban the use of
  marijuana even where states approve its use for
  medicinal purposes.
• Liberal Justice John Paul Stevens relied on
  Wickard and distinguished Lopez and Morrison. He
  reasoned that whether legal or not, marijuana
  growing was a national economic activity and like
  in Wickard, could therefore be reached by
  Congress.

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Conclusion

• The Commerce Clause is the vehicle through which
  the United States government regulates business,
  labor, and more.
• In general, liberals have supported using the
  commerce clause to regulate the economy while
  conservatives have sought to limit its scope.
• Do conservatives in the national government use
  the commerce clause for regulatory purposes?
  Abortion restrictions? Prohibitions on certain
  kinds of medical research cloning?