Commerce Power
John N. Lee
Florida State University
Summer 2010
John N. Lee (Florida State University)
Commerce Power
Summer 2010
1 / 27
Constitutional Grant
“The Congress shall have the powerto regulate Commerce with
foreign Nations, and among the several States, and with the Indian
Tribes (Article 1 Section 8).”
John N. Lee (Florida State University)
Commerce Power
Summer 2010
2 / 27
Interstate Commerce
Interstate Commerce − Commerce that occurs in two states.
Intrastate Commerce − Commerce that occurs exclusively in one state.
E.g. A company that sells bread in Missouri and sells it to stores in
Georgia is engaged in interstate commerce.
Break it down:
Is the production of the good in Missouri interstate commerce?
Is the selling of the good in Georgia interstate commerce?
Or, is just the transport of the good interstate commerce?
John N. Lee (Florida State University)
Commerce Power
Summer 2010
3 / 27
Interstate Commerce
Gibbons v. Ogden (1824) −
Involved law preventing out of state boat companies from serving
individuals in New York.
Supreme Court Ruled:
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Commerce involves more than buying and selling.
States get to regulate commerce which occurs exclusively within their
borders.
Interstate Commerce − Involves any trade which occurs between
states. Once an object is part of interstate trade it is always considered
part of interstate commerce.
Congress can regulate interstate commerce.
John N. Lee (Florida State University)
Commerce Power
Summer 2010
4 / 27
Interstate Commerce − Shreveport Doctrine
Houston E. W. Texas Railway Co. v United States (1914) −
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Shreveport Doctrine − Federal government has the power to regulate
intrastate commerce when a failure to do so would cripple, retard, or
destroy interstate commerce.
John N. Lee (Florida State University)
Commerce Power
Summer 2010
5 / 27
Interstate Commerce − Manufacturing
United States v. E. C. Knight Co (1895) −
Background:
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Dealt with federal application of Sherman Anti-Trust Act.
Federal government was moving in to prevent monopoly over sugar
production in Pennsylvania.
Ruling:
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“The fact that an article is manufactured for export to another State
does not itself make it an article of interstate commerce, and the intent
of the manufacturer does not determine the time when the article or
product passes from the control of the States and belongs to commerce
(US v. E.C. Kight)
John N. Lee (Florida State University)
Commerce Power
Summer 2010
6 / 27
Interstate Commerce − Stream of Commerce Doctrine
Swift and Company v. United States (1905) −
Stream of Commerce Doctrine − Federal government has the
authority to regulate commerce from its point of origin to its point of
termination.
John N. Lee (Florida State University)
Commerce Power
Summer 2010
7 / 27
Interstate Commerce − Stream of Commerce Doctrine
Stafford v. Wallace −
Background:
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Dealt with Packers and Stockyard Act (1921) which regulated the
meat-packing industry by “making it unlawful for the packers to fix
prices or engage in monopolistic practices, the law forbade packers in
interstate commerce to engage in any unfair, discriminatory, or
deceptive practices (Epstein, 418).”
John N. Lee (Florida State University)
Commerce Power
Summer 2010
8 / 27
Great Depression Changes Everything
Worst economic downturn in the United States. High unemployment.
New Deal − Series of economic policies which were designed to
increase government control over the economy.
Separation of Powers in Action. Legislative and Executive want New
Deal policies, but the Judiciary opposes.
John N. Lee (Florida State University)
Commerce Power
Summer 2010
9 / 27
Supreme Court Thwarts New Deal
A. L. A. Schechter Poultry Corp v. United States (1935) −
Dealt with the National Industrial Recovery Act which called for the
creation of codes for fair business competition.
Complainant is the owner of a slaughter house that sells chicken
products in New York.
Supreme Court rules that the business is intrastate and thus ALA is
exempt from the law.
John N. Lee (Florida State University)
Commerce Power
Summer 2010
10 / 27
Supreme Court Thwarts New Deal
Carter v. Carter Coal Company (1935) −
Dealt with the Bituminous Coal Conservation Act which called for the
establishment of a commission empowered to develop regulations
regarding fair competition, production, wages, hours, and labor
relations.
Court concludes that coal mining is not an act of interstate commerce
and thus the law’s application to the coal mining industry was
unconstitutional.
John N. Lee (Florida State University)
Commerce Power
Summer 2010
11 / 27
Court−Packing Plan
“On February 5, 1937, the President announced his plan to reorganize the
federal court system. His proposed legislation was predicated, at least
formally, on the argument that the judiciary was too overworked and
understaffed to carry out its duties effectively. His idea was to expand the
number of lower court judgeships; streamline federal jurisdiction, especially
with respect to cases having constitutional significance, and adopt a
flexible method of temporarily moving lower court judges from their
normal duties to districts with case backlogs (Epstein and Walker 432).”
John N. Lee (Florida State University)
Commerce Power
Summer 2010
12 / 27
Court−Packing Plan
“The President asked Congress to authorize the creation of one new seat
on the Supreme Court for every justice who had attained the age of
seventy, but remained in active service. These expanded positions would
have an upper limit of six, bring the potential size of the Court to a
maximum of fifteen (Epstein and Walker 434).”
John N. Lee (Florida State University)
Commerce Power
Summer 2010
13 / 27
The switch in time that saved nine!
In the face of the court−packing plan some argue that Justice Roberts
switched from voting with the conservative justices to voting with the
liberal justices in order to prevent the reform of the Supreme Court.
John N. Lee (Florida State University)
Commerce Power
Summer 2010
14 / 27
The switch in time that saved nine!
National Labor Relations Board v. Jones and Laughlin Steel
Corporation (1937) −
First case where Supreme Court upholds New Deal policy.
Dealt with National Labor Relations Act which was designed to help
workers acheive gains in wages and working conditions through a
collective bargaining process. Law authorizes the creation of the
National Labor Relations Board which was empowered to hear the
complaints of unfair labor practices and impose corrective measures.
Complainant objects to NLRB order to reinstate workers of a labor
union.
Supreme Court rules that this law was necessary to prevent
impediments to interstate commerce.
John N. Lee (Florida State University)
Commerce Power
Summer 2010
15 / 27
The Permanent Switch
Wickard v. Filburn (1942) −
Dealt with the Agricultural Adjustment Act (AAA) which allowed the
Secretary of Agriculture to establish production limits for various types
of grains.
Filburn grew extra wheat which he intended to only use for himself and
the Federal Government fined him under the AAA.
Supreme Court rules the AAA is constitutional.
John N. Lee (Florida State University)
Commerce Power
Summer 2010
16 / 27
Commerce Power − Modern Limitations
United States v. Lopez (1995) −
Involved the Gun Free Zones Act (1990).
Lopez was caught in his High School carrying a concealed weapon and
ammunition and thus charged under the Gun Free Zones Act.
Government claimed authority for the act under the Commerce Clause.
Supreme Court rules this law unconstitutional.
John N. Lee (Florida State University)
Commerce Power
Summer 2010
17 / 27
Commerce Power − Modern Limitations
United States v. Morrison (2000)
Involved the Violence Against Women Act which provided a federal
civil remedy for the victims of gender-motivated violate (e.g. rape
victim could sue their attackers).
Complainant was a female trying to sue her male rapists.
Supreme Court struck down the law arguing that it did not regulate
interstate commerce.
John N. Lee (Florida State University)
Commerce Power
Summer 2010
18 / 27
Police Power
Police Powers − “[R]efers to the general authority of a government to
regulate for the health, safety, morals, and general welfare of its citizens
(Epstein et al, 460).”
Commerce Clause has been used to establish federal police powers. How
far can it go?
John N. Lee (Florida State University)
Commerce Power
Summer 2010
19 / 27
Police Powers - Initial Interpretation
Champion v. Ames (1903) −
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Law at issue prohibited lottery tickets from interstate or foreign
commerce and from being sent through the mail.
Complainant argues, amongst other things, that lottery should only be
regulated through the police powers of the states...that the federal
government does not have such authority under the commerce clause.
Supreme Court rules the law constitutional...that the federal
government had the power to enact such legislation.
John N. Lee (Florida State University)
Commerce Power
Summer 2010
20 / 27
Modern Uses of Commerce Clause as Police Power
Heart of Atlanta Motel v. United States (1964) −
Law at issue was Title II of the Civil Rights Act (1964), which limits
the ability of private actors to discriminate based on skin color.
Heart of Atlanta Motel challenges law because they wish to continue
their racial discrimination.
Court rules that racial discrimination has a substantial impact on
interstate commerce.
Court specifically says that the legislature can regulate areas of
commerce so long as they concern more than one state and have “a
real and substantial relation to the national interest.”
John N. Lee (Florida State University)
Commerce Power
Summer 2010
21 / 27
State Regulation of Interstate Commerce
Cooley v. Board of Wardens (1852) −
Law in question allowed state and local authorities to control the
nation’s ports and harbors until congress acted otherwise. Specifically,
Pennsylvania passed a port regulation law requiring that all vessels hire
a local pilot to guide ships in and out of the Port of Philadelphia.
Cooley changes the constitutionality of this law on the grounds that it
regulated interstate commerce, something (he argued) only the Federal
Government could regulate.
Supreme Court rules that the law was constitutional.
John N. Lee (Florida State University)
Commerce Power
Summer 2010
22 / 27
Post Cooley Doctrine
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The states retain the power to regulate purely intrastate commerce.
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Congress has the power to regulate interstate commerce and foreign
commerce. When this power is exercised any contrary state law is
preempted.
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The power of congress to regulate interstate and foreign commerce is
exclusive over those elements of commercial activity that are national
in scope or require uniform regulation.
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Those elements of interstate and foreign commerce that are not
national in scope or do not require uniformity, and which have not
been regulated by Congress may be subject to state authority
including the state’s police powers.
John N. Lee (Florida State University)
Commerce Power
Summer 2010
23 / 27
The Dormant Commerce Clause
South Pacific Company v. Arizona (1945) −
Law in question was Arizona state Train Limit Law − which limited
the number of cars which could be attached to a train.
South Pacific argues that the law was unconstitutional because the
states lacked the authority regulate interstate commerce.
Supreme Court rules law unconstitutional.
John N. Lee (Florida State University)
Commerce Power
Summer 2010
24 / 27
The Dormant Commerce Clause
“The justices often refer to this as an application of the dormant
Commerce Clause or the negative Commerce Clause. This
jurisprudence recognizes that although the Commerce Clause is a
positive grant of power to the federal government, it carries with it a
negative command as well: states may not unreasonably discriminate
against or burden interstate or foreign commerce (Epstein et al,
475-476).”
John N. Lee (Florida State University)
Commerce Power
Summer 2010
25 / 27
Discriminating Against Interstate Commerce
Hunt v. Washington State Apple Advertising Commission
(1977) −
Case involved 1972 North Carolina law which required all closed
containers of apples shipped into the state to display either the U.S.
Department of Agriculture grade or nothing at al.
The Washington Commission argues that the law is an impediment to
interstate commerce.
The Supreme Court rules that the law is unconstitutional, that it
impedes interstate commerce.
John N. Lee (Florida State University)
Commerce Power
Summer 2010
26 / 27
Discriminating Against Interstate Commerce
Maine v. Taylor (1986) −
Law in question was a Maine law prohibiting the importation of any
live fish to be used as bait in any of the state’s inland waters.
Taylor imported live fish into the state of Maine.
Supreme Court ruled in favor of the state and found the law
constitutional on the grounds that the federal government had not
acted and thus the states could play a reasonable role.
John N. Lee (Florida State University)
Commerce Power
Summer 2010
27 / 27