Constitutional Law I
Federal Power III
“Dual Federalism”
Feb. 17, 2004
Spring 2004
Con Law I
Overview, Themes
Pre-Civil War

Taney replaces Marshall, state appeasement
Union victory, Reconstruction


Passage of Civil War Amendments (13, 14, 15)
States’ Rights movement discredited
Post-Civil War



Rapid Industrialization
Rise of trusts, industrial class
Laissez Faire movement - Conservative Court
2
Invalidating Economic Regulation
Federal Laws



Restrictive definition of “commerce”
Restrictive definition of “interstate”
Expansive reading of 10th Amendment
State Laws

Expansion of “due process” to include liberty
of contract
3
Restricting “Commerce”
U.S. v. E.C. Knight (1895)


Challenge to Sherman Antitrust Act
Fuller: “Commerce succeeds to manufacture
and is not a part of it”
 Complete separation of commerce and police powers

Harlan: How can Congress effectively regulate
IC if it cannot regulate combinations in restraint
of trade?
 These directly, not incidentally, affect the people of
all the states.
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5
Restricting “Commerce”
Carter v. Carter Coal (1936)

Challenge to Bit. Coal Conserv. Act
 Minimum and maximum prices; labor law

Fuller: “That commodities produced or manu-
factured w/in a state are intended to be sold or
transported outside the state does not render
their production or manufacture … commerce”
 Mining, manufacture, employment are not commerce

If price control and labor agreements (both
involving economic transactions) are not
commerce, what is?
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7
Restricting “Interstate”
Shreveport Rate Cases (1914)
[not assigned]

Incident to its power to regulate
interstate transportation rates,
Congress could also regulate intrastate rates.
Interlude: War,
Great Depression,
New Deal
8
Restricting “Interstate”
Schechter Poultry (1935) [not assigned]

Federal law prohibited sellers from requiring
buyers to purchase “sick chickens”
 Chickens originated out-of-state, but wholesale
transaction occurred wholly within NY state.
 Court rejects “current” or “flow of commerce”
 “There is a clear and necessary distinction between
direct and indirect effects on IC”
If Schechter were still
good law, could
congress regulate this?
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The 10th Amendment
Hammer v. Dagenhart (1918)

Federal law prohibited interstate
trafficking in child-made goods
 Goods themselves were harmless

Impact on interstate commerce?
 Race towards the bottom
 Could states regulate?

Result: interstate commerce cannot effectively
be regulated, either by congress or states
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The 10th Amendment
Hammer v. Daggenhart (1918)

Role of the 10th Amendment: “the act in a two-
fold sense is repugnant to the Constitution.
Different
?
It not only transcends the authority delegated to
Congress over commerce,
But also exerts a power as to a purely local matter to
which the federal authority does not extend.”
Holmes dissent:

Purpose & effects are irrelevant if
congress has power to regulate IC
 State right to ship interstate is
subject to federal law
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The 10th Amendment
Champion v. Ames (1903)


Federal law prohibited interstate
traffic in lottery tickets
Does it matter the purpose of the act could be
to control “widespread pestilence of lotteries”?
Contrast to Hammer:


Lottery tickets, as articles of commerce, are
themselves harmful. Clothing is not. ?
Congress’ policy was consistent w/state policy
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The New Deal
The Great
Depression
Supreme
Court
threatens
economic
recovery
FDR’s court-packing plan
(Supreme Court Historical Society)
13
NLRB v. Jones & Laughlin
(1937)
NLRA created NLRB; prohibits “unfair labor
practices affecting (interstate) commerce”

Affecting = “in commerce,” “obstructing” com.
Does this
“affect”
commerce?
What if J&L steel
was entirely
intrastate?
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US v. Darby
(1941)
FLSA sets wages and hours
1. “commerce prohibiting” measure
“not a forbidden invasion of state
power
because of motive or consequence”
Bootstrapping?  No objection that federal law has similar effect as
state exercise of its police power



Ends are different, even if means are the same
Hammer v. Dagenhart overruled
2. Regulation of goods produced for IC
Super boot- 
strapping?
Power extends to intrastate activities


Affecting IC
Related to other valid federal regulation (e.g., #1)
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US v. Darby
(1941)
New (old?) role for 10th Amd
“The amendment states but a truism that all is
retained which has not been surrendered.
[Nothing] more than declaratory of the relationship
between the national and state governments as it
had been established by the Constitution”
Resolution proposing the first 12 Amendments
The Conventions of a number of the States, having at the time of their
adopting the Constitution, expressed a desire, in order to prevent
misconstruction or abuse of its powers, that further declaratory and
restrictive clauses should be added: And as extending the ground of public
confidence in the Government, will best ensure the beneficent ends of its
institution.””
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Wickard v. Filburn
(1942)
Agricultural Adjustment Act limited
production (to stabilize prices)


Not just production for interstate shipment,
but also production for home consumption
Does home consumption affect commerce?
 Impact on demand for wheat in interstate market?
 Impact on prices?
 Impact on overall economy?


Even from trivial amount consumed by Filburn?
Aggregate effects test
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Wickard v. Filburn
(1942)
Agricultural Adjustment Act limited
production (to stabilize prices)


Not just production for interstate shipment,
but also production for home consumption
Does home consumption affect commerce?
 Impact on demand for wheat in interstate market?
 Impact on prices?
 Impact on overall economy
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Federal Power over Civil Rights
Background


Social matters are typically a state concern
After the Civil War, congress enacted a series of
civil rights laws, as part of reconstruction
 First in reliance on 13th Amd, Section 2
 Next in reliance on 14th Amd, Section 5
 In 1883, the Supreme Court held Civil Rights Laws
unconstitutional, as beyond Congress § 5 powers.


Federal protection of civil rights lay dormant for
80 years, until the 1960s civil rights movement
1964 Civil Rights Act used the commerce clause
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Heart of Atlanta Motel v. US (1964)
Is a law prohibiting race discrimination in accommodations
related to I/s commerce?


Because of the burdens it places
on African-Americans traveling
interstate?
Because the hotel acquires goods
in IC?
20
Heart of Atlanta Motel v. US (1964)
If the law is otherwise valid, does it matter
that Congress’ real goal was equal rights?

Object vs. Motive in pursuing that object
Should congress have used Section 5?
21
Katzenbach v. McClung (1964)
Can a business be regulated under the
commerce clause simply because it buys
goods in I/C?

How does Ollie’s Barbecue burden I/C?
 Aggregate effects test? Wickard, NLRB, Darby

Does the Act purport to regulate Ollie just
because he engages in I/C? Or is Ollie simply
forbidden to use I/C to practice discrimination?
Does local criminal activity affect I/C? If
part of a national enterprise? Perez v. US
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Practice Questions
1. During the era of dual federalism, could
Congress regulate environmental quality?
a. Isn't pollution created & felt entirely intrastate?
b. Does pollution affect or in the current of commerce?
c. Would it matter if congress enacted the law as a
health measure, rather than to promote commerce?
2. Could states regulate environmental quality?
3. Could congress enact consumer protection laws?
a. Besides the FTC and the SEC, what other federal
agencies are unconstitutional?
b. Since health & welfare is a quintessential state
concern, would federal law violate the 10th amd?
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