A Lost Clause... The Commerce Power And Its Decline

The commerce clause of the United States Constitution is one of its most powerful and least understood. As the third clause of Art.1 s.8 of the Constitution, it provides Congress with the power "to regulate commerce with foreign nations, and among the several States, and with the Indian tribes," and for the purposes of this discussion, we will be looking mainly at interstate commerce, as this is the part that impacts most on the domestic agendas of (primarily Democratic) presidents throughout the centuries.

Before we dive into the case law on this clause, it is essential first to understand the three distinct eras of jurisprudence, where we see the commerce clause interpreted restrictively, then expand rapidly after the New Deal, before regressing to its position a century earlier as the 1990s draw to a close.

Before the New Deal

During this era, several tests were developed to determine when the Court would intervene in the commerce clause. 

The 'substantial economic effects' test was seen vividly in the Shreveport Rate case, where Texas had put tariffs on shipping between Texas and Louisiana, which gave an advantage to Texan carriers. Although this only applied to one state - Texas - it was clearly having an impact on interstate trade with Louisiana, and so the Court determined that the federal government's power to regulate interstate commerce also allowed it to regulate purely intrastate commerce in cases where control of the former was not possible without control of the latter. In order for the Court to intervene, the intrastate measure must have a "close and substantial relation to interstate commerce," and, as intrastate and interstate commerce are so fundamentally joined, the Court, therefore, must have jurisdiction over them both.

Friedman noted that there was substantial tension between this case and the principle of US v EC Knight Co, which established that Congress cannot regulate manufacturing - states have the sole power to take legal action against manufacturing monopolies, according to Chief Justice Fuller. In Friedman's view, the mere fact that while Congress could regulate intrastate activity so long as it had a sufficient impact on interstate commerce but could not regulate manufacturing itself, was untenable. While Cushman argued this doctrine lasted for over forty years successfully, it eventually did fall as the New Deal era of jurisprudence was ushered in by more liberal justices.  

The 'stream of commerce' test is simple: where there is an interstate element of the commerce somewhere down the line (in Swift & Co v US, where cattle were sold in a different state from where they originated), Congress has the power to regulate this. This case marked the success of President T Roosevelt's antitrust policies and overruled the US v EC Knight principle that Congress cannot regulate manufacturing. 

Finally, the 'national police regulation' test was related to upholding the laws and morality of the nation. In Champion v Ames, trafficking lottery tickets between states constituted interstate commerce that could be regulated; in Hipolite Egg Co v US, the Pure Food and Drug Act was upheld, allowing the prohibition of the introduction into the States by means of interstate commerce of impure drugs and foods; most notably, perhaps, was the decision in Schechter Poultry v US, which invalidated regulations of the poultry industry, rendering a major component of the New Deal unconstitutional. 

After the New Deal

The Schechter Poultry case led President F D Roosevelt to propose a major constitutional reform: court-packing, whereby he would increase the number of Justices on the Court in order to secure a majority for his New Deal reforms in the judiciary. While both Cushman and Friedman debate the impact this had on the judiciary - whether it frightened the existing justices or not - the Court swiftly changed its course, and in the case of NLRB v Jones & Laughlin Steel Corp, the Court upheld the constitutionality of the National Labour Relations Act 1935, which represented a massive expansion of Congressional power under the commerce clause. 

In US v Darby, the Court went further and upheld the Fair Labour Standards Act 1938, holding that Congress had the power to regulate employment conditions - signaling a major reversal from the deferential Lochner-style jurisprudence of the 19th century. Race relations also came under the lens of the commerce clause, when in the cases of Katzenbach v McClung and Heart of Atlanta Hotel v US, the Court held that Congress had acted within its power in forbidding racial discrimination in restaurants and motels, respectively, as such discrimination was a burden to interstate commerce. 

One of the most important developments in the New Deal era of jurisprudence came with the decision in Wickard v Filburn, which set an important precedent for an expansive reading of the commerce clause for decades to come. The goal of the legal challenge, in this case, was to overrule the Agricultural Adjustment Act 1938, which limited the area that farmers could devote to wheat production. The stated purpose of this Act passed during the Great Depression, was to stabilize the price of wheat in the national market by controlling the amount of wheat produced. The Court upheld the Act, claiming that Congress could regulate wholly intrastate, non-commercial activity if such activity, viewed in the aggregate, would have a substantial effect on interstate commerce, even if the individual effects are trivial. 

The contemporary commerce power

The principles of Wickard v Filburn and NLRB v Jones continued until the end of the 20th century when the conservative Rehnquist and Roberts Courts regressed back to the jurisprudence of the 19th century in the case of US v Lopez. In Lopez, a San Antonio student challenged the Gun-Free School Zones Act 1990, which banned possession of handguns near schools. Chief Justice Rehnquist held that while Congress has broad lawmaking authority under the commerce clause, this does not extend to the regulation of carrying handguns, which plainly is not an interstate economic activity. Breyer's dissent harks back to the Katzenbach principle, saying gun violence could have a significant effect on interstate commerce by impairing educational environments. 

Similarly, the case of US v Morrison, which struck down parts of the Violence Against Women Act 1994 further expanded on this principle, holding that the effects have to be directly economic, not simply indirectly economic, in order to come under the commerce clause powers. 

The dormant commerce clause 

The final issue that warrants investigation is the doctrine of the dormant commerce clause. This is the idea that only Congress can regulate interstate commerce - states cannot do it themselves. In the case of Philadelphia v New Jersey, an NJ law prohibited the importation of most solid or liquid waste which originated from or was collected outside the territorial limits of the state. This violated the commerce clause, with Justice Stewart for the majority writing that "whatever New Jersey's ultimate purpose, it may not be accomplished by discriminating against articles of commerce coming from outside the State, unless there is some reason, apart from their origin, to treat them differently." 

Federalism: a barrier or the answer?

If you are of a more liberal mindset, you likely prefer the Court's reasoning in the post-New Deal era, whereas if you are of a more conservative mindset, you likely prefer the Court's reasoning in the pre-New Deal and contemporary eras. The most basic difference is the impact on federalism and the 10th Amendment, which Chief Justice Marshall signalled as one of the key reasons for the dormant commerce clause doctrine. The powers which are not expressly granted to the federal government are reserved to the States - it is a simple proposition, but one which is viewed as a barrier to achieving the aims of the New Deal, and other wide-ranging legislation, including the Civil Rights Act of 1964. 

The consequence of federalism as a barrier is that it must be viewed as the answer - whilst it is clear that, after US v Lopez, the US Congress cannot legislate for gun-free school zones, it is similarly clear that the states can do this. Diane McGimsey noted Justice Thomas' concurring opinion in US v Lopez, where he laments how far the Court has strayed from the original interpretation of the commerce clause and praises the return of principled federalism that Lopez brought with it.

It is of undeniable consequence, no matter your judicial leanings, that the United States was purposefully built on the principle of a federal government, and while the contemporary jurisprudence may bring about some despondence for advocates of a strong federal government, it also provides a unique opportunity to bring about real, long-lasting change in each of the fifty states without violating the commerce clause in attempting to regulate intrastate activity. 

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