The Commerce Clause Power

-direct effects (pre-1937 through Carter Coal, Schechter, and EC Knight) - Pre-1937 Cases: Stream of Commerce Idea (broader interpretation: ) -post 1937: substantial effects (Wickard, Darby and J&L) -sea change with Lopez? Gibbons v. Ogden, 1824 -Congress issues exclusive steamboat license -its silly to say Congress can only regulate at the border; IC power necessarily follows IC into the territory of a state -struck down state regulation - no good if it affects another state United States v. E.C. Knight Co., 1895 -Congress couldnt suppress American Sugar Refining Co.s monopoly because manufacturing is not commerce but is a pre-commercial activity i. - E.C. Knight: Sugar refining monopoly Sherman Act Manufacturing (sugar refining = intrastate activity) is not commerce. Champion v. Ames (The Lottery Case), 1903 -fed statute outlaws interstate shipping of lottery tickets -since Congress has interstate commerce power, they have the power to ban all traffic across state lines in lottery tickets -leaning toward federal police power as a result of plenary IC power Shreveport Rates case, 1914 ICC (fed. Govt agencyhas regulated the interstate and intraste rate by seting up a cap in how much shipping charges can be). The ct. says the ICC could regulate railroad shipping rates between TX and Louisiana as well as within TX because TX rates were competing with TX-LA rates, thereby impeding interstate commerce. ii. PROTECTIONISM by the states: Railroad charges intrastate firms a lower price, thereby providing the intrastate firms with an advantage (lowers their costs, so can sell at lower price = advantage over out-of-state firms) and encouraging consumers to use the TX-TX (intrastate) route. iii. This intrastate activity had a substantial affect on interstate commerce between TX and LA. So if something affects interstate commerce sufficiently: it can be regulated. This is adopted by Laughling. Hammer v. Dagenhart (Child Labor Case), 1918 -Congress prohibits shipment in IC of any product produced by child labor

-statute overturned -Congress does not have general police power, and unlike the Lottery Case, the goods here are by themselves harmless -the manufacturing itself is intrastate and therefore not subject to the power (no direct effect) (see E.C. Knight: manufacturing is precommercial, not IC) -this will probably result in a race to the bottom, but that doesnt change the federalist scheme -Congressional intent is to regulate labor, not regulating commerce -Dissent (Holmes): this isnt meddling with the states, its only saying what can move across state lines Stafford v. Wallace, 1922 -Packers and Stockyards Act of 1921 authorized the Secretary of Commerce to regulate stockyards into which cattle, moving in interstate commerce, flowed in and out -Taft talks about stream of commerce: stockyards are part of stream of commerce -precursor to more expansive view of CC power A.L.A. Schechter Poultry Corp v. U.S., 1935 -chickens shipped into the city and then slaughtered, federal government wants to regulate the labor practices -fed govt cant do this because of the direct effects test since it was after case, not before case, effects werent direct enough to qualify under CC -previous: in the flow of interstate commerce Carter v. Carter Coal Co., 1936 -regulation re: hours miners could work -federal government couldnt regulate because effects werent direct enough NLRB v. Jones & Laughlin Steel, 1937 -J&L fails to comply with steelworker guidelines -affecting commerce means burdening/obstructing free flow of commerce, and screwing with labor does that -so, this affects interstate commerce, b/c company was interstate and strikes would disrupt commerce (4th largest steel producer) -readings of the Commerce Clause: regulate is ambiguous -Direct Effects (Schechter, Carter Coal, E.C. Knight): regulate means prescribe norm for dealing with the thing itself -Substantial Effects (J&L, Darby, civil rights cases): regulate means control you can do whatever else to get there -general welfare clause in A1S8C1 is a tax and spend clause (see Butler), so you have to use the commerce clause here

U.S. v. Darby Lumber Co., 1941 -max and min wage standards for manufacture of goods for interstate commerce (Fair Labor Standards Act of 1938) -Child Labor Case had held the Child Labor Act couldnt function this way - overruled here (Congressional intent irrelevant, this has a SE on commerce) -puts in place substantial effects test, and wages have a SE on IC b/c race to the bottom (Prisoners Dilemma) will affect various states SE basically means there has to be a valid rationale for federal intervention

Wickard v. Fillburn, 1942 -D Wickard, Sec. of Agr., put quotas on wheat production and fined P Fillburn for growing past his allotment (he used excess on his own farm) -activity can be regulated based on substantial effect of aggregate of that activity -the large, important market in wheat is clearly within Congress power, and power to regulate commerce includes power to regulate prices -explicitly overrules direct/indirect test in favor of SE -home consumption substitutes for purchases on the open market, and even though Ps consumption was trivial, in the aggregate its important even though theres no jurisdictional hook in the statute -rationale for federal intervention: free-rider/prisoners dilemma problem, where each state might let other states institute quotas and benefit from the higher prices in the interstate market Heart of Atlanta Motel v. United States, 1964 -Civil Rights Act bans racial discrimination by private motels that accept out-of-state business -CRA legislative history contains examples of how racial discrimination places burdens on IC, especially by preventing blacks from traveling -it its IC that feels a substantial pinch, it doesnt matter how local the operation is that applies the squeeze Katzenbach v. McClung, 1964 -restaurant served about half food from out of state and wouldnt serve blacks -Congress could intervene because it meant sales of fewer interstate goods and interstate travel was obstructed directly by it -if theres a rational basis for regulation, you then question whether the facts fit the scheme, and here they did United States v. Lopez, 1995

-Gun-Free School Zone Act makes it illegal to knowingly possess a firearm in a school zone -categories of activity w/in commerce power: (i) the use of channels of IC; (ii) instrumentalities of, or personas or things in, interstate commerce, (iii) substantial relation to/substantial effect on interstate commerce -criminal statute has nothing to do with commerce and is not part of a larger, commercial regulatory scheme -insurance rate hikes and impaired education are not enough to uphold IC SE power; if they did that, thered be no real limit on IC power United States v. Morrison, 2000 -Violence Against Women Act provides damage remedy for abused women -crimes like this are not economic activity, nor a SE on IC Gonzales v. Raiche, 2005 -Cali medical pot law allows homegrowns; feds destroyed plants -a classic example of preemption -prohibition, even intrastate, is part of a larger regulation of economic activity and therefore satisfies Lopez/Morrison-style SE -for economic activities, deference to Congress leads to rational basis test for the regulatory act as in Katzenbach -for non-economic activities, less deference, so we ask is there SE w/Wickard aggregation