Commerce Clause – The Commerce Power of Congress

The Commerce Clause, Article I Section 8 Clause 3 of the Constitution of the United States, grants Congress the power “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes”. The commerce power is an enumerated power of Congress and the Supreme Court has interpreted it as an express grant of authority to Congress and an affirmative limitation on the rights of the states to regulate commerce within their own borders.

The scope of the commerce power depends on the interpretation of “commerce”. If construed sufficiently broadly, the commerce power can give Congress the power to legislate in many areas that otherwise would fall within the scope of the states’ police power. The Constitution does not define the term and the Supreme Court therefore has great flexibility in deciding cases involving the Commerce Clause and enormous power to influence the balance of state versus federal power.

Cases from the Supreme Court of the United States

In Gibbons v. Ogden (1824), New York gave Livingston and Fulton the exclusive right to operate steam ships on state waters and Livingston assigned his rights to Ogden. Ogden sought to enforce the exclusive right against Gibbons. The Supreme Court held that the states cannot pass legislation for the regulation of internal affairs that would normally fall within the scope of the states’ police powers, if such legislation is inconsistent with federal law enacted under the commerce power.

In Cooley v. Board of Wardens (1851), Congress passed an Act in 1789 stipulating that ship pilots would continue to be regulated under state law until Congress passed legislation to the contrary. In 1803 Pennsylvania enacted legislation requiring all ships to engage local pilots to guide them through the harbor at Philadelphia. The Supreme Court upheld the statute, holding that the Commerce Clause does not prohibit Congress from conferring the power to regulate interstate commerce upon the states.

In The Daniel Ball (1871), Congress passed an Act in 1838 prohibiting the operation of steam ships on the internal navigable waters of the United States without a license. The Daniel Ball was fined $500 for operating without the license. The Supreme Court held that Congress has the power to regulate the intrastate transport of goods if those goods are bound for or originated from another state.

In Hammer v. Dagenhart (1918), Congress passed the Child Labor Act in an attempt to combat the use of child labor in factories. The Supreme Court held that Congress did not have the power under the Commerce Clause to regulate goods produced through child labor and transported in interstate commerce. The Court held that manufacture is not commerce and the exclusion of goods was permitted only when it involved the nature of the goods themselves, not the manner in which they were made.

In Baldwin v. G.A.F. Seelig, Inc. (1935), New York enacted the New York Milk Control Act which established a price fixing scheme for transactions between milk producers and dealers. Darby refused to grant Seelig a license unless it agreed to comply with the law. Seelig refused and challenged the law as invalid in light of the Commerce Clause. The Supreme Court held that a state regulation imposing a minimum price fixing scheme to benefit the local community was an unconstitutional burden on interstate commerce.

In NLRB v. Jones & Laughlin Steel Corp. (1937), Congress enacted the National Labor Relations Act of 1935 which prohibited unfair labor practices affecting interstate commerce. Jones & Laughlin Steel was charged under the Act for allegedly discriminating against union members. The Supreme Court held that Congress has the power to regulate manufacturing activities that have a significant effect on interstate commerce, including activities that burden interstate commerce or its free flow.

In South Carolina State Highway Department v. Barnwell Brothers, Inc. (1938), South Carolina passed a law imposing limits on the weight and width of trucks on its state highways. The Supreme Court upheld the state law and held that states may regulate trucks to promote safety and prevent damage to highways, provided they do not discriminate between trucks traveling in interstate commerce and those traveling only in-state.

In United States v. Darby Lumber Co. (1941), Congress passed the Fair Labor Standards Act of 1938 establishing a minimum wage and maximum hours for employees involved in producing goods for interstate commerce. Darby was charged under the Act and challenged the law on the grounds that the regulation of in-state manufacturing activity was unconstitutional for exceeding Congress’s authority under the Commerce Clause. The Supreme Court upheld the statute, holding that Congress can exclude from interstate commerce articles which deteriorate the health, welfare, and morals of the nation. Congress may apply its own vision of public policy in excluding articles even though the state in which the goods are produced has not deemed it necessary to regulate their use.

In Wickard v. Filburn (1942), Congress set quotas on wheat production through the Agriculture Adjustment Act. Wickard exceeded his quota when the amount of wheat produced for his own use was included with the amount he sold. The Supreme Court held that Congress has the power to regulate local intrastate activities, such as the production of wheat for personal use, if they have an aggregate effect on interstate commerce.

In H. P. Hood & Sons, Inc. v. Du Mond (1949), New York passed a law stipulating that licenses for new milk processing plants could not be issued unless the Commissioner was satisfied that grant of the license would serve the public interest and would not cause disruptive competition. H. P. Hood & Sons opposed the law on the grounds that it imposed an unconstitutional burden on interstate commerce. The Supreme Court found the law unconstitutional, holding that a state regulation is unconstitutional under the Commerce Clause if its purpose and effect would be to reduce the volume of interstate commerce for the benefit of the local economy.

In Katzenbach v. McClung (1964), Congress passed the Civil Rights Act of 1964 which prohibited race based discrimination by restaurants serving food obtained through interstate commerce. The Supreme Court held that Congress can regulate business activity that is purely local, if any part of the activity affects interstate commerce, if the aggregate activity has a substantial effect on interstate commerce.

In Hicklin v. Orbeck (1978), Alaska passed the Alaska Hire statute requiring that qualified Alaska residents be hired in preference to non-residents for jobs related to the oil and gas industry. The Supreme Court found the law unconstitutional, holding that the Commerce Clause prohibits the states from preferring its own residents in utilizing natural resources located within the state but bound for interstate commerce.

In United States v. Lopez (1995), Congress enacted the Gun-Free School Zones Act of 1990 (GFSZA) prohibiting the possession of firearms in school zones. Lopez brought a loaded handgun to school and was charged under the Act. The Supreme Court held that the commerce power only grants Congress the ability to regulate the use of the channels and instrumentalities of interstate commerce, and other activities having a substantial relation to or a substantial effect on interstate commerce. The Act was held to unconstitutional for exceeding the power of Congress under the Commerce Clause.


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