Commerce Power - Florida State University

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 withforeign Nations, and among the several States, and with the IndianTribes (Article 1 Section 8).”


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 inGeorgia 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?


Interstate Commerce

Gibbons v. Ogden (1824) −

Involved law preventing out of state boat companies from servingindividuals in New York.Supreme Court Ruled:

1 Commerce involves more than buying and selling.2 States get to regulate commerce which occurs exclusively within their

borders.3 Interstate Commerce − Involves any trade which occurs between

states. Once an object is part of interstate trade it is always consideredpart of interstate commerce.

4 Congress can regulate interstate commerce.


Interstate Commerce − Shreveport Doctrine

Houston E. W. Texas Railway Co. v United States (1914) −

1 Shreveport Doctrine − Federal government has the power to regulateintrastate commerce when a failure to do so would cripple, retard, ordestroy interstate commerce.


Interstate Commerce − Manufacturing

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

Background:1 Dealt with federal application of Sherman Anti-Trust Act.2 Federal government was moving in to prevent monopoly over sugar

production in Pennsylvania.

Ruling:1 “The fact that an article is manufactured for export to another State

does not itself make it an article of interstate commerce, and the intentof the manufacturer does not determine the time when the article orproduct passes from the control of the States and belongs to commerce(US v. E.C. Kight)


Interstate Commerce − Stream of Commerce Doctrine

Swift and Company v. United States (1905) −

Stream of Commerce Doctrine − Federal government has theauthority to regulate commerce from its point of origin to its point oftermination.


Interstate Commerce − Stream of Commerce Doctrine

Stafford v. Wallace −

Background:1 Dealt with Packers and Stockyard Act (1921) which regulated the

meat-packing industry by “making it unlawful for the packers to fixprices or engage in monopolistic practices, the law forbade packers ininterstate commerce to engage in any unfair, discriminatory, ordeceptive practices (Epstein, 418).”


Great Depression Changes Everything

Worst economic downturn in the United States. High unemployment.

New Deal − Series of economic policies which were designed toincrease government control over the economy.

Separation of Powers in Action. Legislative and Executive want NewDeal policies, but the Judiciary opposes.


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 thecreation of codes for fair business competition.Complainant is the owner of a slaughter house that sells chickenproducts in New York.Supreme Court rules that the business is intrastate and thus ALA isexempt from the law.


Supreme Court Thwarts New Deal

Carter v. Carter Coal Company (1935) −

Dealt with the Bituminous Coal Conservation Act which called for theestablishment of a commission empowered to develop regulationsregarding fair competition, production, wages, hours, and laborrelations.Court concludes that coal mining is not an act of interstate commerceand thus the law’s application to the coal mining industry wasunconstitutional.


Court−Packing Plan

“On February 5, 1937, the President announced his plan to reorganize thefederal court system. His proposed legislation was predicated, at leastformally, on the argument that the judiciary was too overworked andunderstaffed to carry out its duties effectively. His idea was to expand thenumber of lower court judgeships; streamline federal jurisdiction, especiallywith respect to cases having constitutional significance, and adopt aflexible method of temporarily moving lower court judges from theirnormal duties to districts with case backlogs (Epstein and Walker 432).”


Court−Packing Plan

“The President asked Congress to authorize the creation of one new seaton the Supreme Court for every justice who had attained the age ofseventy, but remained in active service. These expanded positions wouldhave an upper limit of six, bring the potential size of the Court to amaximum of fifteen (Epstein and Walker 434).”


The switch in time that saved nine!

In the face of the court−packing plan some argue that Justice Robertsswitched from voting with the conservative justices to voting with theliberal justices in order to prevent the reform of the Supreme Court.


The switch in time that saved nine!

National Labor Relations Board v. Jones and Laughlin SteelCorporation (1937) −

First case where Supreme Court upholds New Deal policy.Dealt with National Labor Relations Act which was designed to helpworkers acheive gains in wages and working conditions through acollective bargaining process. Law authorizes the creation of theNational Labor Relations Board which was empowered to hear thecomplaints of unfair labor practices and impose corrective measures.Complainant objects to NLRB order to reinstate workers of a laborunion.Supreme Court rules that this law was necessary to preventimpediments to interstate commerce.


The Permanent Switch

Wickard v. Filburn (1942) −

Dealt with the Agricultural Adjustment Act (AAA) which allowed theSecretary of Agriculture to establish production limits for various typesof grains.Filburn grew extra wheat which he intended to only use for himself andthe Federal Government fined him under the AAA.Supreme Court rules the AAA is constitutional.


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 andammunition 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.


Commerce Power − Modern Limitations

United States v. Morrison (2000)

Involved the Violence Against Women Act which provided a federalcivil remedy for the victims of gender-motivated violate (e.g. rapevictim 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 regulateinterstate commerce.


Police Power

Police Powers − “[R]efers to the general authority of a government toregulate 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. Howfar can it go?


Police Powers - Initial Interpretation

Champion v. Ames (1903) −

1 Law at issue prohibited lottery tickets from interstate or foreigncommerce and from being sent through the mail.

2 Complainant argues, amongst other things, that lottery should only beregulated through the police powers of the states...that the federalgovernment does not have such authority under the commerce clause.

3 Supreme Court rules the law constitutional...that the federalgovernment had the power to enact such legislation.


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 limitsthe ability of private actors to discriminate based on skin color.Heart of Atlanta Motel challenges law because they wish to continuetheir racial discrimination.Court rules that racial discrimination has a substantial impact oninterstate commerce.Court specifically says that the legislature can regulate areas ofcommerce so long as they concern more than one state and have “areal and substantial relation to the national interest.”


State Regulation of Interstate Commerce

Cooley v. Board of Wardens (1852) −

Law in question allowed state and local authorities to control thenation’s ports and harbors until congress acted otherwise. Specifically,Pennsylvania passed a port regulation law requiring that all vessels hirea local pilot to guide ships in and out of the Port of Philadelphia.Cooley changes the constitutionality of this law on the grounds that itregulated interstate commerce, something (he argued) only the FederalGovernment could regulate.Supreme Court rules that the law was constitutional.


Post Cooley Doctrine

1 The states retain the power to regulate purely intrastate commerce.

2 Congress has the power to regulate interstate commerce and foreigncommerce. When this power is exercised any contrary state law ispreempted.

3 The power of congress to regulate interstate and foreign commerce isexclusive over those elements of commercial activity that are nationalin scope or require uniform regulation.

4 Those elements of interstate and foreign commerce that are notnational in scope or do not require uniformity, and which have notbeen regulated by Congress may be subject to state authorityincluding the state’s police powers.


The Dormant Commerce Clause

South Pacific Company v. Arizona (1945) −

Law in question was Arizona state Train Limit Law − which limitedthe number of cars which could be attached to a train.South Pacific argues that the law was unconstitutional because thestates lacked the authority regulate interstate commerce.Supreme Court rules law unconstitutional.


The Dormant Commerce Clause

“The justices often refer to this as an application of the dormantCommerce Clause or the negative Commerce Clause. Thisjurisprudence recognizes that although the Commerce Clause is apositive grant of power to the federal government, it carries with it anegative command as well: states may not unreasonably discriminateagainst or burden interstate or foreign commerce (Epstein et al,475-476).”


Discriminating Against Interstate Commerce

Hunt v. Washington State Apple Advertising Commission(1977) −

Case involved 1972 North Carolina law which required all closedcontainers 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 tointerstate commerce.The Supreme Court rules that the law is unconstitutional, that itimpedes interstate commerce.


Discriminating Against Interstate Commerce

Maine v. Taylor (1986) −

Law in question was a Maine law prohibiting the importation of anylive 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 lawconstitutional on the grounds that the federal government had notacted and thus the states could play a reasonable role.


Documents

Commerce Power - Florida State University