Tackling the most important topics of law school, Part 9a: The Commerce Clause, and how we got there

September 25, 2013

Law School 101a(Editor’s note: Over the next ten weeks, we’ll be covering some of the most prominent legal concepts taught in law school to help students faced with these topics, whether for the first time or as part of a review, better comprehend them.)

After a couple of topics that are more procedural in nature, we are back with a more substantial topic, one found in the Constitution.

Article I, Section 8, Clause 3 of the U.S. Constitution provides: “The Congress shall have Power…[t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”

This section of the Constitution is known as the Commerce Clause, and it gives Congress authority to make laws for the purpose of regulating “interstate commerce” and commerce with foreign nations and with tribal governments.

Despite its being contained in the Constitution during its original ratification in 1788, the clause has been interpreted very differently by the Supreme Court ever since.  Even today, it continues to be a controversial congressional power.

The first time the Supreme Court interpreted the Commerce Clause was in 1824’s Gibbons v. Ogden.  The case primarily involved the question of whether Congress’ powers under the Commerce Clause were limited to regulating state borders.

The Supreme Court answered that question in the negative, choosing to read “commerce” broadly (you can check out this post for more of the facts of Gibbons); specifically, the Gibbons Court found that Congress’ Commerce Clause power “extends to every species of commercial intercourse between the United States and foreign nations, and among the several States” (“intercourse” here meaning connections or dealings).

For over 70 years after Gibbons, the Supreme Court maintained this broader view of “commerce,” and would regularly strike down state laws that interfered with Congress’ regulatory powers under the Clause.  In addition, Ogden was also the first appearance of the “dormant Commerce Clause,” a legal principle that prohibits a state from passing laws that wrongly burden interstate commerce.  In other words, Congress alone has the power to regulate interstate commerce.  Much of the Supreme Court jurisprudence during the 70 years following Gibbons was concerned with the dormant Commerce Clause, striking down state regulations that stepped into Congress’ vast regulatory powers.

That ended with 1895’s U.S. v. E. C. Knight, which limited Congress’ authority by defining manufacturing as an activity strictly local in nature, and thus outside the scope of the Commerce Clause.

E.C. Knight marked the start of yet another era, but one that saw a narrow interpretation of the Commerce Clause that limited the federal government’s power to regulate the national economy.

This judicial philosophy became particularly problematic during President Franklin Roosevelt’s New Deal, which saw broad new congressional forays into regulation.  It was during this time that the Supreme Court ruled in NLRB v. Jones & Laughlin Steel Corporation, reversing its Commerce Clause course yet again to espouse a more expansive view of the clause.

This expansive approach prevailed for almost sixty years, and resulted in near-limitless economic regulatory powers for Congress, which can be seen in the Supreme Court’s 1942 Wickard v. Filburn ruling.  Wickard upheld the Agricultural Adjustment Act of 1938, which restricted farmers as to how much of a certain crop they could grow – even those crops grown solely for private consumption.

This expansive view also allowed for several civil rights victories at the Supreme Court, including 1964’s landmark Heart of Atlanta Motel v. U.S.

Beginning with 1995’s U.S. v. Lopez, however, the Supreme Court has consistently struck down challenged government regulations as exceeding Congress’ powers under the Commerce Clause.

The sole exception to this trend is 2005’s Gonzales v. Raich, in which both Justice Anthony Kennedy and Justice Antonin Scalia joined the Court’s liberal bloc to uphold the government regulation being challenged.  Considering that the regulations being challenged were federal criminal drug laws, Raich is more likely the result of Kennedy’s and Scalia’s ideological opposition to legalized marijuana than a true departure from the current Court’s restrictive Commerce Clause views.

Even the most recent Commerce Clause case to come before the Supreme Court, 2012’s National Federation of Independent Businesses v. Sebelius, would have seen government regulation as beyond the scope of Congress’ Commerce Clause powers had it not been for Chief Justice Roberts’ opinion allowing the challenged regulation (the Affordable Care Act’s “individual mandate”) to stand as a valid exercise of Congress’ taxing powers.  And the individual mandate has far more to do with regulating interstate commerce than the majority of other congressional exercises of Commerce Clause powers that have been upheld in the past.

So where does that leave us in evaluating whether a government regulation is a proper exercise of Commerce Clause authority?

After last year’s ruling on Obamacare, many constitutional law scholars are still trying to figure that out for themselves.  But we’ll take a stab at it in Part B of this week’s topic.