Commerce Clause

We the People do ordain and establish this US Constitution

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Defining moments in law

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Issues

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“”The Commerce Clause emerged as the Framers' response to the central problem giving rise to the Constitution itself: the absence of any federal commerce power under the Articles of Confederation. For the first century of our history, the primary use of the Clause was to preclude the kind of discriminatory state legislation that had once been permissible. Then, in response to rapid industrial development and an increasingly interdependent national economy, Congress "ushered in a new era of federal regulation under the commerce power," beginning with the enactment of the Interstate Commerce Act in 1887 and the Sherman Antitrust Act in 1890.

— Gonzales v. Raich decision, US Supreme Court

The Commerce Clause is the common name for Article I, Section 8, Clause 3 of the United States Constitution. The clause specifically states that the United States Congress has the power "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." This is one of the most fundamental powers delegated to Congress by the Constitution.

Due to the powers it grants to the government, the Commerce Clause has been the source of controversy before the courts and the public regarding the nature and especially the extent of those granted powers. The interpretation of the Commerce Clause has historically been highly varied based on the interpretations of the Supreme Court. The scope of the Congress' regulatory powers expanded rapidly during the industrial era and essentially became unlimited post-New Deal due to the increasingly popular perception among US legal scholars that determining the scope of the Commerce Clause should be a political and legal, rather than judicial, decision.

This expansion of the clause is unsurprisingly opposed by those who believe in small government due to its authorization of federal regulation of the economy. The Heritage Foundation for instance, believes that the Supreme Court and Congress should work together to limit the government's regulatory ability. Most conservatives, libertarians, and originalists prefer the pre-New Deal use and intent of the Commerce Clause: to grant Congress limited power to prevent states from interfering with each other's trade relations. They view its more recent uses as an unjustified attempt to grow the power and size of the government in a way that threatens economic and personal freedom. The Commerce Clause also created some heat between the two sides of American politics during SCOTUS' litigation of Obamacare.

The Commerce Clause was also used to uphold the federal Controlled Substances Act, infamous for mandating the beginning of the War on Drugs, in the 2005 Gonzales v. Raich case.

Evolution of the Commerce Clause

Steamboats, motherfucker.

Gibbons v. Ogden (1824)

The Gibbons v. Ogden case was argued over some of the most boring but important shit imaginable: steamboats and rivers.

In 1808, the state of New York granted the industrialists Fulton and Livingston exclusive navigation rights through that state's waters for three decades. Thomas Gibbons, another steamboat owner, was running shipping between New York and New Jersey without the permission of Fulton and Livingston, and was therefore sued before a New York state court and barred from conducting business.

Gibbons, however, had a federal license to trade along America's coastline, and he appealed to the US Supreme Court on the justification that his federal license should outweigh the state's monopoly. Chief Justice John Marshall and all but one of his colleagues ruled in favor of Gibbons that the Commerce Clause did indeed invalidate New York's law; only the federal government had the power to regulate commerce between states.

Kidd v. Pearson (1888)

Another case which demonstrates how limited the Commerce Clause really was before 1937 is the Kidd v. Pearson case.

The law in question in this case was from Iowa, and it banned the manufacturing of alcohol even when the liquor was intended for sale and consumption out-of-state. This of course, immediately appears to run afoul of the Commerce Clause. After all, at this point the Supreme Court had ruled on several occasions that the states could not make laws that interfere with interstate commerce. So when Iowa moved to shut down a distillery run by a man named J.S. Kidd, he resisted and sued on the basis that his business should be considered outside of state jurisdiction due to the fact that he was selling across state lines.

The Court stunningly upheld the Iowa law on a very strange basis: "manufacturing" should not be considered to be "commerce." This meant that states could regulate manufacturing in their borders regardless of the effect this would have on the economies of other states. The justices here were afraid that allowing the federal government to regulate manufacturing under the Commerce Clause would cause the government's regulatory power to expand and encompass "every branch of human industry." In other words, they're probably flipping in their graves right now.

Carter v. Carter Coal Company (1936)

National Recovery Administration -- the other NRA

In 1933, as part of the New Deal and in an attempt to manage the ongoing Great Depression, the FDR administration pushed for and passed the National Industrial Recovery Act. This represented a massive regulation of industry across the entire United States; companies were required to band together to fix prices and wages, establish production quotas, and self-regulate with the goal of creating a quasi-planned economy. It also created the National Recovery Administration in order to ensure compliance. Part of this program involved a law that regulated minimum wages, maximum hours, and "fair practices" for the coal industry.

Although compliance with the laws was not mandatory, companies had to pay a tax if they didn't want to play ball. Carter brought a suit against his own company, arguing that it shouldn't have to pay the noncompliance tax because the coal regulations were an unconstitutional overstep of the Commerce Clause. The Court once again ruled on the basis that "production" is distinct from "commerce," arguing that employment, prices, and wages are all local production issues that are completely separate from any trade between states.

This is where the story changes. After seeing the Court strike down many more provisions of the New Deal, FDR proposed a plan in 1937 that would allow him to add justices to the Supreme Court. This never happened, but it scared the fuck out of the Court justices, enough so that two of their members seemingly overnight switched positions and joined the pro-New Deal camp. At this point, beginning with the NLRB v. Jones & Laughlin Steel Corp. case, the Court began upholding the New Deal in a series of 5-4 decisions.

Wickard v. Filburn (1942)

See the main article on this topic: Wickard v. Filburn

This case is around the point where the Commerce Clause exploded in scope.

A piece of New Deal legislation prevented farmers from growing too much wheat in fear of driving prices down due to excess supply. Filburn, a small farmer, was indicted for producing greater than his quota of wheat. He argued that the extra wheat he produced had been used by himself, never making it to market, and was therefore not subject to regulation under the Commerce Clause.

The court disagreed, reasoning that Congress had a right to regulate commerce within the states if there was a chance said commercial activity would have an impact on other states. This represented a dramatic reversal of previous judicial rulings, which had always weighed whether each specific instance of regulated activity was local or interstate. However, the most important legacy of Wickard can be seen with these two lines from the decision: "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. Such conflicts rarely lend themselves to judicial determination." In other words, the Supreme Court established a precedent that it would defer to the judgement of Congress when determining to scope of the Commerce clause.

Heart of Atlanta Motel v. United States (1964)

LBJ signs the Civil Rights Act, pissing off racists everywhere.

In 1964, Congress passed the Civil Rights Act, outlawing discrimination on the basis of race or sex. Of course, given the United States' history of segregation and racism, this kind of law couldn't go into effect without major resistance. One of the people who fought back was a motel owner in Atlanta, Georgia, who sued the government on the basis that the Civil Rights Act's banning of discrimination by private enterprises was an overstep of Congressional authority under the Commerce Clause.

Notably, the Supreme Court saw a similar situation in 1883, called the Civil Rights Cases, and they ruled that Congress only had the ability to prevent states from discriminating, not private entities. However, this time the Court unanimously upheld the law. They noted that the motel served interstate travelers, and that this was enough justification to find that the motel impacted interstate commerce. However, in his concurring opinion, Justice Tom Clark declared that Congress could regulate both interstate and intrastate activities, as it has a "police power" and obligation to rectify moral wrongs in the nation.

Gonzales v. Raich (2005)

In 1996, California passed a law legalizing medical marijuana, which conflicted with the federal Controlled Substances Act. Despite legally (under state law) growing and using marijuana, the plaintiffs of the case, Angel Raich and Diane Monson, had their pot plants seized and destroyed by the DEA. The Ninth Circuit Court, on appeal, actually ruled the Controlled Substances Act unconstitutional on the basis that it exceeded Congress' Commerce Clause powers, as the usage of medical marijuana has no substantial effect on interstate commerce.

However, the case made it to the Supreme Court, and they saw it in a different light. In a 6-3 decision, the Court ruled that the nature of the use of the marijuana in this instance was irrelevant in terms of whether it could be regulated because the marijuana trade as a broader whole could impact interstate commerce. The Majority also cited Wickard, noting that the decision in that case established a principle that Congress' regulatory powers extended to anything that could have an impact on interstate commerce.

National Federation of Independent Business v. Sebelius (2012)

In 2010, Congress passed the divisive Affordable Care Act, which Republicans have been pissed about ever since. The National Federation of Independent Business, several individuals, and 26 States sued the government on several bases, including the idea that the Commerce Clause does not give Congress the power to mandate that all Americans obtain minimum health insurance coverage. The Eleventh Circuit Court actually agreed with the plaintiffs, striking down the individual mandate.

The Supreme Court upheld the individual mandate on a 5-4 vote, although there was some disagreement on the Majority side as to why. Chief Justice John Roberts agreed that the individual mandate was valid under the Tax Clause, which grants Congress powers of taxation, but did not view it as being valid under the Commerce Clause alone. Justice Ruth Bader Ginsburg, meanwhile, wrote a concurring/dissenting opinion where she argued that the individual mandate should have been upheld by the Commerce Clause because the uninsured, as a socioeconomic class have a significant impact on interstate commerce. Justice Clarence Thomas, who was part of the minority, wrote a dissenting opinion where he objected that the Court's post-Wickard interpretations of the Commerce Clause are allowing Congress to claim limitless regulatory power.