Commerce Clause Doctrine
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1 The Congress shall have Power... To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes... Art. I, Sec. 8, cl. 3 To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof. Art. I, Sec. 8, cl. 18 The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. Amend. X (1791)
2 E.C. Knight Co. (1895): Commerce succeeds to manufacture, and is not part of it. The Shreveport Rate Cases (1914): Congress s authority includes the right to control... all matters having a close and substantial relation to interstate traffic and the power to foster and protect interstate commerce even though intrastate transactions of interstate carriers may be controlled
3 Tests: direct, indirect, and stream of commerce The Lottery Case (1903) The New Deal crisis Schecter Poultry (1935): poultry handled in the slaughterhouse was not in a current or flow of interstate commerce Carter Coal Co. (1936): Mining brings the subject mater of commerce into existence. Commerce disposes of it. o Working conditions are local conditions
4 FDR s Court-packing plan: appointment of one additional Justice for each Justice over 70, up to 15 Justices Justice Roberts switch in time that saved the Nine.
5 NLRB v. Jones & Laughlin Steel Corp. (1937) o Facts; issue Although activities may be intrastate in character when separately considered, if they have such a close and substantial relation to interstate commerce that their control is essential or appropriate to protect that commerce from burdens and obstructions, Congress cannot be denied the power to exercise that control. The distinction between what is national and what is local...
6 United States v. Darby (1941): the motive and purpose of the Fair Labor Standards Act of 1938 are that interstate commerce should not be made the instrument of competition in the distribution of goods produced under substandard labor conditions ; overruling Dagenhart
7 Wickard v. Filburn (1942) o Facts; issue Whether the regulated subject is production, consumption, or marketing is not material Local activity not regarded as commerce may be reached by Congress if it exerts a substantial economic effect on interstate commerce The aggregation principle
8 Heart of Atlanta Motel v. United States (1964): Congressional power to promote interstate commerce includes the power to regulate local activities which might have a substantial and harmful effect upon that commerce.
9 Katzenbach v. McClung (1964): Congress had a rational basis for finding that racial discrimination in restaurants had a direct and adverse effect on the free flow of materials in interstate commerce The restaurant purchased meat from a local supplier who purchased it out of state
10 Perez v. United States (1971): a federal criminal statute prohibiting loan-sharking enforced by violence is a valid exercise of the Commerce power
11 United States v. Lopez (1995) o Facts; issue Three categories of activities subject to the commerce power o 1. Use of the channels of interstate commerce o 2. Protection of the instrumentalities of interstate commerce, or persons or things in interstate commerce, even though the threat may come only from intrastate activities o 3. Activities having a substantial relation to interstate commerce, i.e., activities that substantially affect interstate commerce
12 Lopez (cont.) Court: the challenged statute does not regulate economic activity; there is no jurisdictional element insuring that the firearm affected interstate commerce The government s costs of crime and national productivity reasoning o we would have to pile inference upon inference a distinction between what is truly national and what is truly local
13 Lopez (cont.) Justice Kennedy s concurrence: the statute upsets the federal balance and intrude[s] upon an area of traditional state concern Justice Thomas, concurring: the flaws of the substantial effects test Justice Stevens, dissenting: the market for possession of handguns by children is substantial Justice Souter, dissenting: the statute passes rationality review
14 Justice Breyer s dissent Lopez (cont.) Applies rational basis review Congress rationally could have found ; obviously could have thought ; could also have found ; could rationally have concluded Note: after Lopez Congress reenacted the Gun Free School Zones Act and added a jurisdictional element (the weapon was transported in interstate commerce)
15 United States v. Morrison (2000) o The Violence Against Women Act of 1994 o Court: gender-motivated violent crimes are not economic activity Gonzalez v. Raich (2005) o Congress had a rational basis for its conclusion that high demand would draw homegrown marijuana into the interstate market United States v. Comstock (2010): federal civil commitment statute was supported by the Necessary and Proper Clause
16 Wickard v. Filburn (1942) It is said... that this Act, forcing some farmers into the market to buy what they could provide for themselves, is an unfair promotion of the markets and prices of specializing wheat growers. It is of the essence of regulation that it lays a restraining hand on the selfinterest of the regulated and that advantages from the regulation commonly fall to others. The conflicts of economic interest between the regulated and those who advantage by it are wisely left under our system to resolution by the Congress under its more flexible and responsible legislative process.
17 NFIB v. Sebelius (2012) o The Affordable Care Act s individual mandate Valid exercise of the Commerce and Necessary and Proper Clauses? Court: Congress has never attempted to rely on that power to compel individuals not engaged in commerce to purchase an unwanted product.
18 NFIB (cont.) The power to regulate commerce presupposes the existence of commercial activity to be regulated. The individual mandate compels persons to become active in commerce Wickard? Could Congress constitutionally order everyone to buy vegetables? Necessary and Proper Clause argument fails; the individual mandate is not incidental to the exercise of the commerce power
19 NFIB (cont.) Justice Ginsburg s dissent Congress could have enacted a single-payer system Congress s rational basis The consumption of health-care products and services The differences between the health-care market and market for cars and broccoli The free rider problem The Necessary and Proper Clause argument
20 NFIB (cont.) The joint dissent (Justices Scalia, Kennedy, Thomas, and Alito) The failure to maintain coverage is not commerce The Commerce and Necessary and Proper Clauses are not carte blanche for doing whatever will achieve the ends sought by Congress Young people are not participants in the health care market; the decision to forego participation is not commercial activity or any activity at all
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