Frey 1

Commerce Clause Study Guide

Dr. Merriam Fall ‘22
Nikolas Frey

Overview of the Eras:

- Period 1: Founding Era
o McCulloch v. Maryland
o Gibbons v. Ogden
o Lots of John Marshall and federalism- wanting to create a national economy.
- Period 2: Lochner Era
o U.S. v. E.C. Knight
o Hammer v. Dagenhart
o Laissez-Faire economic principles are applied to the Commerce Clause, 10 th and
14th amendments
- Period 3: New Deal
o NLRB v. Jones & Laughlin Steel Corp. (1937)
o U.S. v. Darby (1941)
o Wickard v. Filburn (1942)
o Lochner Era is undone
o Administrative state enters the picture
o Return to the Founding Era principles
- Period 4: Civil Rights
o Heart of Atlanta Motel Inc. v. U.S. (1964)
o Katzenbach v. McClung (1964)
o Regulations of interpersonal relations.
- Period 5: New Federalism
o U.S. v. Lopez (1995)
o U.S. v. Morrison (2000)
o Raich v. Gonzalez (2005)
o Rehnquist Revolution
o Some, only some, push back on the use of commerce clause.
Three Big Article 1 Powers:
- To lay and collect taxes. Article 1 Sect. 8 Clause 1
- To regulate commerce with foreign nations, and among the several states, and with the
Indian tribes. Article 1 Sect. 8 Clause 3
- to make all Laws which shall be necessary and proper for carrying into Execution the
foregoing Powers, and all other Powers vested by this Constitution in the Government of
the United States, or any Department or Officer thereof" Article 1 Sect. 8 Clause 18
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Founding Era:
- McCulloch v. Maryland (1816)
Case Facts:
The constitutionality of a Bank of the United States had long been disputed. The First National
Bank was authorized in 1791 by President Washington following fierce debate between his
cabinet. Alexander Hamilton argued that the Bank was “necessary and proper” for Congress to
exercise its Taxation Powers which are found in Article 1 section 8. For Hamilton and the
federalists, a national bank was necessary to provide for a national economy. Thomas Jefferson
and Edmund Rudolph in the cabinet, along side James Madison in the House argued that the
Bank violated the Constitution, and that Congress had no expressed power to create a national
bank. This view falls under the term, “strict construction.”1 The First Bank’s charter lasted 20
years, and in 1816, then Pres. Madison signed a charter for a new Second Bank of the United
States (hereafter Second Bank). Even 20 years later, Congress was debating the constitutionality
of the second charter. Madison did not change his view on the constitutional question, he simply
thought that since Congress had done it once before, there was “legislative precedent”2 for them
to do it again.
Maryland however wanted a fight. The Second Bank had a bank in Baltimore, who’s head
cashier was James McCulloch. Maryland’s state legislature passed a law requiring all non-
Maryland chartered banks to issue their money on special stamped paper that they could only get
from the state by paying 2% of the value of the money printed. Banks also had an option to pay a
flat $15,000 fee per year. The Second Bank was the only non-state charter bank in Maryland and
the law was squaring directed at driving the bank’s operating costs up and making its money less
competitive. McCulloch refused to pay Maryland. Maryland filed suit in state court to force the
bank to pay. The state case was simple: MD passed a law, McCulloch violated the law, thus
McCulloch is wrong, and he has to pay the state the money. McCulloch loses in state court and
appeals to SCOTUS. Chief Justice John Marshall writes the unanimous opinion, so you know it
is going to be full of federalism and judicial acrobatics.
Arguments3:
- Maryland A: McCulloch violated state law by not paying the tax to the state
- McCulloch A: The Bank can ignore that state law because it conflicts with an Act of
dCongress.
- Maryland B:
1. Congress has no power to establish a National Bank
2. Even if Congress does have that power. State law can still be enforced upon the
federal law not withstanding federal law.

1
Caplan 101
2
Merriam in class. Note that Merriam disagrees with Caplan on this and that this view is not represented in the
textbook.
3
Merriam’s Class 7 Power Point. Deck 7
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- Maryland makes structural arguments about the constitution; McCulloch raises textual
arguments
Questions before the Court:
1. Did Congress have the authority to establish the bank?
2. Did the Maryland law unconstitutionally interfere with congressional powers?4
Court’s holding:
1. The Second Bank of the United States is constitutional
2. States cannot tax instruments of the national government employed in the execution of
constitutional powers.5
Reasoning:
Is the Second Bank constitutional? Yes
Necessary and Proper Clause:
One might think that the answer to the question of the constitutionality of the bank by asking
three questions; Is it necessary for Congress to establish a bank to perform an enumerated
power? Is it proper for Congress to establish a bank to perform an enumerated power? What
power is Congress trying to use by establishing a bank?6 However, Marshall does not care about
making future PHC students lives easy, he wants to expand federal power! Instead, Marshall
engages in semantic and linguistic study of “necessary” as used in the Constitution. What he
turns up is that “necessary” doesn’t mean “absolutely necessary.” He turns to Article 1, Section
10 and the use of “absolutely” before necessary to indicate that to the writers, there was a
difference between the two. Marshall turns “necessary” into “appropriate” His opinion contains
no examination of the “proper” part of the clause and further does not relate the creation of the
Bank to any previous enumerated power. The Necessary and Proper clause is in Art. 1 Section 8,
Clause 18. It seems that it is allowing Congress to do whatever is “necessary and proper” to
execute any of the previous powers laid out in Art. 1 Sect. 8 Clauses 1-17. Marshall treats
Necessary and Power as its own independent power source.7 Under Marshall, “necessary and
proper” becomes “appropriate and legitimate”8
Marshall in the opinion uses the example of Federal Mail Theft as an example of what he is
talking about. See page 110 of Caplan and slide 14 of Class 7 PowerPoint9
Means and Ends:
Marshall holds that if the goal of the legislation is in the spirit of the constitution, then the means
are constitutionally. “Let the end be legitimate, let it be within the scope of the constitution, and
4
https://www.oyez.org/cases/1789-1850/17us316
5
Ibid
6
Merriam Lecture 9/15/22
7
Ibid.
8
Ibid.
9
Just knowing that mail theft was the example should, in my guess, be enough for the exam.
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all means which are appropriate, which are plainly adapted to that end, which are not prohibited,
but consist with the letter and spirit of the constitution, are constitutional.”10
Marshall’s liberalism:
While not a liberal by today’s standards Marshall’s opinions can often be seen in has consistent
with the letter and spirit of the law. As he famously adds in McCulloch, “we must never forget
that this it is a constitution that we are expounding”11 This quotation seems to be suggesting that
the structure of and words of the constitution are not enough. That judges and courts will need to
interpret different, more nuisance parts of it, while still adhering to the general principles that it
expounds.
Does Maryland’s State Law violate the U.S. Constitution? Yes
Marshall uses the Supremacy Clause invalidate MD’s tax.
The power to create implies the power to destroy. The power to tax is a power to destroy and
since the Maryland did not create the Second Bank, it cannot destroy the Second Bank.
Therefore, it cannot be subject to a state tax because states do not posses the power to destroy a
federal creation because of the Supremacy Clause.
“Marshall is in the gun, he’s back at it again, he’s looking, he’s looking, and he FINDS
CONFLICT ONCE AGAIN! Oh, my goodness, conflict wasn’t even there, and Marshall just
threw him open for the score”- SCOTUS announcer, circa 1800s.
The point of that analogy is this: The federal creation of a bank and the state’s tax on that bank
do not make the two laws inconsistent. The Second Bank could pay the 2% or the $15,000 flat
rate and still be operational. Maryland is not destroying the Second Bank. Certainly, the tax
maybe an inconvenience to the bank, but it certainly does not prohibit its existence. Marshall is
saying that by taxing the national bank, Maryland is preventing the bank from operating- which
is not true. Marshall holds that the laws do not need to be inconsistent in terms, only in
abstraction. Gives the federal government the power of “obstacle prevention” 12
This opinion reduces state power.
- Gibbons v. Ogden (1824)
Case Facts:
The Huston River is owned by the State of New York. Robert Fulton was an American developer
of steamboats. Fulton and an investor, Robert Livingston- who was a former ambassador to
France and highly politically connected guy started to create hype around the steamboat
business. Livingston convinced his political buddies in NY’s legislature to give the two of them a
legal monopoly on all steamboat travel on NY water. Fulton and Livingston received the
monopoly and would license out some of their routes and charge royalties. One of these licenses

10
Merriam Class 7 slide deck, quoting Marshall in McCulloch
11
Ibid.
12
Merriam lecture 9/15/22
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was given to Aaron Ogden, a former governor of New Jersey (Insert your favorite overused New
Jersey joke here). Ogden in 1814 began to run a passenger steamboat line between New York
City, NY and Elizabethtown, NJ. Ogden had an estranged business partner, Thomas Gibbons
who was mad that he was now cut out of the steamboat market due to NY’s monopoly law.
Gibbons turned to the Federal Coasting Licensing Act of 1793 (CLA) for a way to get back in.
the CLA allowed for a federal office to issue licenses to boat owners for a fee. With such a
license, a ship could fly the ‘Mercia flag, get exempt from some federal duties, and would be
entitled to the privileges of ships or vessels employed in the coasting trade or fisheries. Gibbons
got his federal license and went to work; opening up two passenger steamboat lines on Ogden’s
line. Ogden then sued in NY state court, seeking an injunction to bar Gibbons from operating the
steamboats on the line. Form the state court, the matter was simple: NY gave a monopoly to
Fulton, Fulton gave a license to Ogden, not to Gibbons (probably because he was from NJ).
Gibbons was breaking NY state law. Gibbons and his lawyer, Daniel Webster appealed to
SCOTUS.13 This is the first case that deals directly with the commerce clause.
Arguments:
- Ogden A: Gibbons violated State Law.
- Gibbons A: I can ignore that state law because it conflicts with a federal law (Federal
Coastal Licensing Act)
- Ogden B:
1. Congress did not have the power to enact the CLA
2. Even if Congress has the power, state law can still be enforced, notwithstanding the
federal law.14
Question before the Court:
1. Does the Commerce Clause give Congress the authority over interstate navigation?
Court’s holding:
1. Yes, because under the Constitution's Supremacy Clause, the New York monopoly was
void because it conflicted with federal law.15
Reasoning:
Navigation is Commerce:
Marshall uses other areas of the constitution that reference commerce to conclude that navigation
is in fact apart of commerce. Such as, Art. 1 Sect. 9 Clause 6 “No Preference shall be given by
any Regulation of Commerce or Revenue to the Ports of one State over those of another”
Marshall holds that commerce means intercourse between the states. He lays out clearly in his
opinion, “All America understands and has uniformly understood the word ‘commerce’ to
comprehend navigation.”16
13
Caplan 117-18
14
Merriam Class 7 Power Point. Deck 23
15
https://www.oyez.org/cases/1789-1850/22us1
16
Opinion in Gibbons. Caplan 120
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Regulating Commerce “Among the States” Involves Some In-State Regulation

Marshall articulates that Congress must be able to regulate some things inside of the states that
are related to interstate Commerce. Congress’s power over “commerce among the States cannot
stop at the external boundary line of each State but may be introduced into the interior. ... The
power of Congress, then, whatever it may be, must be exercised within the territorial jurisdiction
of the several States.17
It is safe to say that modern Commerce Clause (CC) jurisprudence goes well beyond what
Marshall is talking about. Marshall adds a limiting principle to the Fed. Govt. ability regulate
commerce inside of a state. Marshall’s limiting principle has three prongs. Congress can not
regulate the commerce if it is 1. Completely Internal 2. Which is carried on between man and
man in a State or between different parts of the same state. 3. And which does not extend t o
or affect other states.18
That third prong is what causes trouble. Courts have interpreted that language to mean that if the
commerce does affect another state, then it can be regulated by the federal govt. Even if the
commerce effects another state by just 1%, the feds can move in and regulate it. But how does
one define “affect?” Marshall plants seeds for future justices in the New Deal Era to expound
upon.
Scope of Federal Power Generally:
Federal action “is to be applied to 1. All the external concerns of the nation, and 2. To those
internal concerns which affect the States generally; But not to those [concerns] which are 1.
Completely within a particular State, 2. Which do not affect other States 3. And with which it is
not necessary to interfere for the purpose of executing some of the general powers of the
[national] government.”19
Did Marshall pull another conflict out of nowhere? No. This case is different in that regard from
McCulloch or Marbury. Gibbons is using the federal license in a way that is not explicitly stated
in the law but is also allowed under the law which thus creates the conflict between Federal and
NY law.
Concurring Opinion:
Justice Jackson would have gone further then Marshall. Jackson argued that states had no power
to enact any regulation affecting interstate commerce-whether it conflicted with an enacted
federal statue. Marshall says that the states cannot have any laws that contradict federal law.This
shows that the reasoning and thoughts that future courts, i.e., the New Deal court will use are
already lurking in the shadows.
This case limits state power.
3 categories of Commerce:
17
Merriam’s Class 7 Power Point, Deck 26. quoting Marshall in Gibbons.
18
Ibid Deck 27.
19
Ibid Deck 28. quoting Marshall in Gibbons.
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There are three categories of commerce regulations that are formed after Gibbons.
1. Cross-border transactions
2. Infrastructure to facilitate cross-border transactions
3. In-state activity affecting interstate commerce.
a. This is the category that almost all federal regulations come from.
Between the Founding Era and the Lochner Era, the civil war happened. This led to
reconstruction which in turn lead to the begin of centralization. Following reconstruction,
American industry boomed. Steel, Coal, and Gun manufacturing soared. In response to the
changing times, Congress began to use the Commerce Clause. This started with the Anti-
Sherman Trust Act. It should also be noted that this is when pragmatism came onto the stage.
Pragmatism is an American philosophy which started to flourish in the second half of the 19th
century. Prior to the onset of pragmatism, laws were casted in cement. Unmovable. The law said
what it said. Pragmatism takes a more holistic approach. Laws now are susceptible to changing
circumstances, new thoughts, and are adaptable. The laws and the constitution are influx
according to pragmatism.
Lochner Era:
- U.S. v. E.C. Knight (1895)
Case Facts:
E.C. Knight was a company that manufactured sugar. They, alongside three other companies in
PA, were bought out by American Sugar Refining which was based in NJ (Insert your second
overused New Jersey joke). The Attorney General of the United States sued, saying that they
were violating the Sherman Anti-Trust Act. If the merger was successful, then the company
would own 98% of the sugar refining market in the U.S. The two parties went to federal court,
where the federal trial court ruled in favor of E.C. Knight, the government appealed to the
SCOTUS.20 This is considered the first case of the Lochner Era.
Question before the court:21
Can the United States Federal Government go into Pennsylvania and prevent a merger from
happening?
Court’s holding:
No, the Commerce Clause does not give the Congress the abilty to regulate manufacturing.
The court developed a new test. Commerce is about transactions. One does not need to look at
the ‘affect’ but one should look at the content of the transaction. This leads the Court to rule that
manufacturing is not apart of commerce. Manufacturing proceeds commerce and is therefore

20
Caplan 220.
21
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apart of state sovereignty; Congress can not regulate manufacturing. As the court itself writes,
“Commerce succeeds to manufacture, and is not a part of it.”22
The court also reasons that there is a difference between direct and indirect. In order for the
federal government to regulate an activity, there must be a direct effect on out-of-state activity.
This case is a victory for states rights.
- Hammer v. Dagenhart (1918)
Case Facts:
By 1918, administrative agencies begin dealing with regulations. In the intervening years
between E.C. Knight and Hammer the Court upheld Federal regulations limiting the commerce
of the lottery, drugs, prostitutes, and liquor. The court did so one the basis that the regulations
were not targeting the manufacturing of those four products but their movement on the interstate
market. The Court recognized the governments interest in keeping vices out of the marketplace
and found that argument compelling.
Perhaps embolden by a string of victories at the high court, Congress decided to go one step
further. They want to end child labor in America. What a worthwhile goal! Congress, for one of
the only times in history, is actually smart and they know that the Court will strike down a law
that is targeting manufacturers because, and say it with me: Manufacturing is not commerce. So,
Congress says fine, what we will do is pass a law that says this: Business we want you to end
child labor. If you do not want to that’s fine, but you won’t be able to enter the interstate market
because we are trying to regulate what we believe is a vice (child labor).
In Charlotte, North Carolina there were the Dagenhart Family. Ronald was the father and Reuben
and John were the boys. The boys worked at the Fidelity Manufacturing Company, a cotton mill
because the family needed the money. Because of the new law and the fact that Fidelity wanted
to stay in the interstate commerce market, they announced that they were firing their child labors.
Ronald acting on behalf of his sons, and his neighbor filed suit against Fidelity and W.C.
Hammer, the U.S. Attorney for the Western District of NC.
Question before the Court:
Does the congressional act regulating child labor violate the Commerce Clause, the Tenth
Amendment, or the Fifth Amendment?
Court’s Holding:
Yes. Congress does not have the power to regulate interstate commerce on the basis of how the
product was manufactured.
The Court sees right through the sneakiness of Congress. They find that this act really does
regulate manufacturing. By doing this, they show the difference between this case about cotton
and the previous cases about the lottery, drugs, prostitution, and liquor. Those four products were

22
Caplan 221.
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themselves the evil that Congress was targeting. In this case, the product that Congress is
targeting is cotton. Say what you want about cotton sweaters, but they are not evil. The evil part
of this situation comes from the manufacturing of the cotton by children. The Commerce Clause
is only discussing the movement of goods. The good of cotton is not evil and Congress lacks the
authority to regulate the part that is. (Child manufacturing)
The Court also looks at the 10th Amendment. The court rules that Congress must show that the
state does not have the power that Congress themselves are using before enacting a regulation. It
also seems to suggest that there are somethings that are categorically local. That perhaps there
are some things that may go cross state borders but are so integral to state sovereignty that the
Federal government can not regulate it. Unfortunately, for everyone, the Dagenhart court did not
give a list of things that would fall into this category or provide a test for how one could
determine if something did fall into this category.
This ruling is a victory for state’s rights.
Politics Time:
The 1920s were a time for America and the world. Known as the Roaring 20s, everyone was
roaring it up; so much so that everyone forgot to check the stock market until it went crashing
down harder than a sleep deprived-PHC student after pulling several all nighters. The 20s had
been dominated by republicans politically, but with the beginning of the Great Depression things
shifted quick. 1932 FDR won the presidency, and in 1936 he pulled out a massive re-election
win. So much so that he believed that he had a mandate from the people to bring major change to
the SCOTUS. During his early years in office, the Court had been a stumbling block to some of
FDR’s New Deal initiatives. These setbacks for FDR (and he believed, the country) were led by
a group known as the Four Horsemen. These four justices were able to find a way to pick up a 5th
justice and hobble together a majority to reject FDR’s plans. FDR in his first fire side chat of his
new term announces his plan to re-make the court. His plan: for every justice over the age of 70
who doesn’t retire, the president gets to place a new justice. In context, that would have given
him 6 vacant seats right away, canceling out all four horsemen.
This plan proved to be too far. The republicans joined by southern democrats who where still
skeptical of the Northeastern Elite Roosevelt banned together to block the plan. While FDR’s
planned didn’t go into effect, the goal was achieved. In 1937, the court changed its interpretation
of the Commerce Clause. In fairness, there were signs that disagreement about Lochner era
precedents were plentiful on the court and there were signals in both dissents and opinions that
the Court would be open to changing parts of its thought process. However, the timing is too
good. Historians have dub this drastic change in interpreting “The switch in time, to save the
nine”
New Deal Era
- NLRB v. Jones & Laughlin Steel Corp. (1937)
Case Facts:
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Congress passed the National Labor Relations Act of 1935 which outlawed unfair labor practices
affecting commerce. It also created the National Labor Relations Board to enforce the act. Jones
& Laughlin was a PA corp. that owed and operated facilities in several states. A labor union
alleged that they had engaged in unfair labor practices by firing union leaders and intimidating
workers from joining. The new NLRB agreed, and order back pay and a change in policy. Jones
& Laughlin sued.
Arguments:
Jones & Laughlin argued that what happened within their PA manufacturing plant was beyond
the reach of the federal government.
Court holding:
Switch in time to save nine.
Court held that Congress could in fact regulate manufacturing and overturned E.C. Knight
Reasoning:
The court reasoned that the PA plants draw raw materials from around the country, use interstate
commerce infrastructure, they then transform those materials, that they received through
interstate commerce and produce a product that is then sold on the interstate market. Further, the
court announced that they were done with the old debates about what commerce represented
directly related to a narrow definition of commerce among the states.23 “Although the activities
maybe intrastate in character when separately considered, if they have such a close and
substantial relation to interstate commerce that their commerce from burdens and obstructions,
Congress cannot be denied the power to exercise that control.”24
This case can be considered as a body analogy. Think of the body, all different parts working
together, the heart is pumping blood to your organs. Nerves are running different feelings and
sensations around from different parts of your body to the brain. All of that running is
representative of interstate commerce, going from one place to another. The brain collects those
nerves and shoots back actions. For example, “pull that hand off the stove” The brain then sends
more nerves to complete. So, the Brain is engaged in interstate commerce.
Unlike what the Court held in E.C. Knight about looking at what the item is, the court took a
holistic, more pragmatic approach. You need to see how that item or company interacts with
other items or companies around the country. Manufacturing and commerce are no longer
distinct. Manufacturing is commerce. This means that the United States has one national
economy. It is now an integrated system.
Because materials came in from out of the state, they are engaged in interstate commerce.
- U.S. v. Darby (1941)
Case Facts:
23
Caplan 279
24
Caplan 280, quoting NLRB
 Frey 11

In 1938, Congress passed the Fair Labor Standards Act, which established minimum wages and
maximum hours for employees who were engaged in interstate commerce or in the production of
goods for interstate commerce. Fred Darby operated a lumber mill in Georgia and sold wood to
both in state and out of state consumers. He was prosecuted for breaching the FLSA and the trial
court held that the act was unconstitutional. The case was then appealed to the SCOTUS.
Questions before the Court25:
1. Whether Congress has the constitutional power to prohibit the shipment in interstate
commerce of lumber manufactured by employees whose wages are less than a prescribed
minimum or whose weekly hours of labor at that wage are greater than a prescribed
maximum
2. Whether Congress has the power to prohibit the employment of workmen in the
production of goods for interstate commerce at other than prescribed wages and hours
Arguments:
Darby argued that the FLSA violated the Commerce Clause, the 5th amendment, and the 10th
amendment.
Court holding:
Congress may regulate manufacturing because it substantially affects interstate transactions. The
Court overturns Hammer v. Dagenhart
Reasoning:
The motives and purpose of Congress’s regulations do not matter. “Regulations of Commerce
which do not infringe some constitutional prohibitions are within the plenary power conferred on
Congress by the Commerce Clause.”26
The court relies on McCulloch in holding that Congress power “extends to those activities
intrastate which so affect interstate commerce or the exercise of the power of Congress over it as
to make regulation of them appropriate means to the attainment of a legitimate end.” 27 Congress
can in fact regulate manufacturing. (This is overturning Hammer v. Dagenhart)
10th amendment and the States
The court turns the 10th amendment into a truism. Meaning that the 10th amendment is not giving
us any new information.
In Hammer, the Court held that there was a stop sign for Congress. Congress could not regulate
the intrastate activities associated with the manufacturing of products- even if the products were
going to be used in interstate commerce. In Darby, the court took away the stop sign and
replaced it with leftovers. The States can do whatever the federal government does not do. States
are allowed to do things until the federal government says no. The States are not given any
25
United States v. Darby Caplan 281.
26
Ibid 283.
27
Ibid
 Frey 12

categories that are out of touch from the Federal government. While Hammer held to the dual
sovereignty principle, Darby holds to overlapping sovereignty and where there is overlapping
sovereignty, the federal will always trump the states.
5th Amendment:
The court briefly touches on it. Holds that the Court’s ruling in West Coast Hotel v. Parrish
closed the argument on the subject. Minimum wage laws and Maximum hours laws are
constitutional.
- Wickard v. Filburn (1942)
Case Facts:
By this time 7 out of the 9 justices were appointed by FDR. During the Great Depression,
Congress passed Agricultural Adjustment Act of 1933 which was stuck down as unconstitutional
by the four horsemen plus two. In 1937, Congress passed a new Agricultural Adjustment Act.
The AAA set mandatory production quotas that would go into effect if a supermajority of
farmers voted to comply. In 1940, the Department of Agriculture, under the AAA proposed
limiting production of wheat for 1941. A national farmer referendum was held and the proposal
was adapted. Roscoe Filburn was a wheat farmer in Ohio who according the the formula was
allowed to plant 11.1 acres of wheat. Filburn said “nah fam, I’m good” and went head and
planted 23 acres of wheat. It is unclear what Filburn was going to do with the wheat, but it
appears like he was going to keep it on the farmer and store it for next years feed, seed, or turn it
into flour for his family.
Arguments:
Filburn argued that growing wheat and consuming it on the same farm without wheat or money
ever changing hands was not “commerce among the several states.”
The DOA was not concerned about what Filburn did with the wheat. They were concerned in
regulating the national supply of a commodity that was in the interstate and international
markets. In order to do this, they had to limit the amount of wheat produced.
Court holding:
Congress may use its Commerce Power to regulate or prohibit activities provided the economic
effects of such activities are substantial.28
Reasoning:
Aggregation Doctrine:
The court creates this doctrine of looking at all of the market, not just Farmer Filburn, but of
Farmer Filburn plus all the other wheat farmers in America. This doctrine holds that all may be
individually regulated because together they have an impact. Congress can regulate activity
within a single state, even if each individual activity had a trivial effect on interstate commerce,
28
https://www.oyez.org/cases/1940-1955/317us111
 Frey 13

as long as the intrastate activity viewed in the aggregate would have a substantial effect on
interstate commerce.
The court is done with direct and indirect tests from the Lochner era. “It may still, whatever its
nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce
and this irrespective of whether such effort is what might at some earlier times have been defined
as “direct” or “indirect”29
Revolution of 1937 effects30
Schechter Poultry (1935); Carter Coal (1936) Jones & Laughlin (1937) Darby (1941)
and Lochner Era generally Filburn (1942)
For “effects” prong, Congress may only “Direct/Indirect” test abandoned; Congress
regulate activity with “direct” effect on needs only a “substantial relationship” to
interstate commerce interstate commerce
Certain conduct is per se local (e.g., No conduct is per se local; must consider the
manufacturing) context
Economic activities must be segregated from Economic activities and their effects may be
each other for purposes of the nexus analysis aggregated to ascertain their cumulative effect
Tenth Amendment limits federal powers, in Tenth Amendment is a truism.
order to protect state authority

Civil Rights Era:

Note that we are moving from regulating economic activity to social interaction regulations.
- Heart of Atlanta Motel v. United States (1964)
Case Facts:
Following the assassination of JFK and the elevation of LBJ to the presidency, the federal
government got working on one of JFK’s plans. Massive Civil Rights reform. This had been
tried before in 1875, however the SCOTUS struck down the Act as unconstitutional. The 1875
act banned public accommodations from discriminating based on race. Public accommodations
are private entities that open themselves up to the public. The courts view public
accommodations as private entities for the purpose of the Constitution. In original, 1875
argumentation the U.S. never thought about using the commerce clause as a legal tool to pass the
constitutional test. Instead, the government relied on the enforcement clauses of the 13 th and 14th
amendments. The issue with the 13th amendment is it is the wrong issue, but right actor. Not
dealing with slavery, but we are dealing with private entities. The issue with the 14 th amendment
is it is the right issue, discrimination but wrong actor states. Considering this, the court declares
the act unconstitutional.
This is relevant because Congress passes a new Civil Rights Act of 1960. That act contains Title
II, which is practically the exact same law as the Civil Rights Act of 1875 but updated to
29
Wickard v. Filburn Caplan 290.
30
Dr. Merriam’s Class 9 power point. Deck 15.
 Frey 14

consider modern advancements. Title VI deals with institutions that receive federal money, Title
VII deals with any business with 15 or more employees.
Heart of Atlanta Motel Inc. was a public accommodation that operated solely in Georgia that had
a policy of rejecting black guests. The hotel does solicit out of state patronage through various
media and billboards. It was believed that approximately 75% of their hotel guests were from
outside of Georgia.
Arguments:
Heart of Atlanta Motel argues that 1. Congress exceeded its power to regulate commerce under
the commerce clause 2. that the act violates the 5th amendment because the motel was deprive of
the right to choose tis customers and operate their business as it wishes, which resulted in taking
of liberty and property without due process of the law. 3. That by requiring appellant to rent
available rooms to Negroes against its will, Congress is subjecting it to involuntary servitude in
violation of the 13th amendment.31
United States argues both the Commerce Clause and the 14th amendment
Court holding:
The Commerce Clause extends the anti-discrimination provisions in the Civil Rights Act of 1964
to hotels that host travelers from outside the state.32
Reasoning:
The majority of the court reject’s the government’s 14th amendment argument but relies on
Gibbons to make its conclusion. In summarizing Gibbons, the court holds, “The determinative
test of the exercise of power by the Congress under the commerce Clause is simply whether the
activity sought to be regulated is “commerce which concerns more States than one” and has real
and substantial relation to the national interest.33 The court also finds that transportation is
commerce.
Since the motel was positioned near Interstates 75 and 85 and received most of its business from
outside Georgia, this showed that it had an impact on interstate commerce, which is all that is
needed to justify Congress in exercising the Commerce Clause power.34
Further, Congress has judged that racial discrimination has affected interstate commerce,
therefore it can be regulated.
Douglass’s Concurrence
He goes in a radical step. He does not rely on the Commerce Clause, instead he turns to the 14 th
amendment. He practically turns the 14th amendment to applying not just to state actors but to

31
Heart of Atlanta Motel, Inc. v. United States Caplan 366.
32
https://www.oyez.org/cases/1964/515
33
Heart of Atlanta Motel, Inc. v. United States Caplan 366.
34
https://www.oyez.org/cases/1964/515
 Frey 15

public accommodations. This would be disastrous. He is trying to legislate morality from the
bench.
- Katzenbach v. McClung (1964)
Case facts:
Ollie’s BBQ was located in Birmingham, Alabama. It was owed by Oliver McClung. Ollie’s
allowed whites to eat in the restaurant seating area but blacks had to get take out order from the
counter facing the street. Because of Title II of the Civil Rights Act of 1960 would outlaw this
discrimination, McClung sued Attorney General Nicholas Katzenbach to invalidate the law. Both
sides agree that Ollie’s BBQ did not serve any customers from outside of Alabama. However,
the facts did show that Ollie purchased about 46% of his meat from a local supplier who
procured some of his meat from out of state. In-State Food and Out of State of Food goes to the
wholesaler who then sells to the local restaurant that then sells that food to customers who are all
from the state.
Title II of the Civil Rights Act of 1960 defined that it applies to any restaurant “if its operations
affect commerce” It further defines that as if “it serves or offers to serve interstate travelers or a
substantial portion of the food which it serves has moved in commerce.
Case holding:
“Congress had ample basis upon which to find that racial discrimination at restaurant which
receive from out of state a substantial portion of the food served does, in fact, impose
commercial burdens of national magnitude upon interstate commerce.”35x
Reasoning:
SCOTUS relies on the congressional record to show the burdens that racial segregation has on
interstate economy and because Congress just needs to show that it effects interstate commerce,
it is a low burden. The court further applied the aggregation doctrine in this case as well. While
perhaps the small restaurants racial discrimination policies won’t affect national economics, all
the little mom and pop restaurants together definitely would have an effect. The statue also says
“offers to serve” which of course this and all other restaurants in America fall under that
umbrella.
The Supreme Court is relying on less than half of the meat that the guy bought in state being
produced out of state, not by him, but by another third party to say that the Congress has the
abilty to regulate that finish product because of an action that was three degrees of separation
between the regulated activity and the alleged interstate commerce.
In 1936, 28 years early. SCOTUS denied similar reasoning in Schechter Poultry. There the Court
ruled that the regulation on market men because the commission men got 96% of their chicken
out of state was unconstitutional. In this case, there were still three degrees of separation between
the regulated activity and the alleged interstate commerce and there were more meat coming in

35
Katzenbach v. McClung Caplan 373.
 Frey 16

from out of state, yet the court still ruled this unconstitutional. Again, empathizing how big a
deal the switch in time to save nine really was.
New Federalism Era:
Between 1935 and 1995, the Court upheld every single commerce clause related regulation
passed by the Federal Government
- U.S. v. Lopez (1995)
Case facts:
In 1990, Congress passed the Gun Free School Zone Act of 1990 which made it a federal offense
for any induvial to knowingly posses a firearm at a place that the individual knows or reasonably
should know is a school zone. A high school student, Lopez brings a gun to school with the
intent to sell the gun. Student is arrested and charged under the act. He challenges the validity of
the act under the commerce clause. Within the legislative history of the GFSZ there is no
mention of the Commerce Clause
Chief Justice William Rehnquist was the last justice to be truly concerned about federalism. With
Rehnquist at the helm, the court began to take a closer look at congressional acts under the
commerce clause.
Case holding:
The possession of a gun in a local school zone is not an economic activity that might, have a
substantial effect on interstate commerce. The law is a criminal statute that has nothing to do
with "commerce" or any sort of economic activity.36
Reasoning:
The Rehnquist Court has three problems with the GFSZA.
1. The act regulates possession, not the sale of a gun. Congress is trying to use the
commerce clause to regulate something that is not economic in nature.
2. Congress didn’t identify a nexus point between interstate commerce in the statue.
a. No express nexus language about which guns may not be possessed.
b. No express Congressional findings describing a nexus.
3. No nexus to interstate commerce actually exists.
Justice Breyer in his dissent tried to provide a nexus between the possession of a gun in a school
zone and interstate commerce. If someone posses a gun in a school zone, the students will feel
unsafe, if they feel unsafe, they won’t learn, if they don’t learn, then they won’t get good jobs, if
they don’t get good jobs, then they won’t help the national economy. Now that’s some Marshall
level judicial acrobatics!
The majority cites several of the Lochner era cases in its opinion which scare the dissenters. But
this “revolution” is really just a dust-up. It only takes Congress to add 13 words to the act to
36
https://www.oyez.org/cases/1994/93-1260
 Frey 17

make it constitutional. Congress will now spend time and effort into establishing the nexus
relationship.
- U.S. v. Morrison
Case facts:
Violence Against Women Act of 1994 created a federal civil cause of action for victims of sex-
based crimes. After learning from Lopez, Congress spends time and congressional testimony
showing a nexus between violence against women and interstate commerce. Christy Brzonkala
was a student at Virginia Tech and in fall of 1994 she met Antonio Morrison and James
Crawford. After 30 minutes of meeting them, the two men assaulted her and repeatedly raped
her. The two men were then bragging about what they had done around campus. After the attack,
Brzonkala became severely emotionally disturbed and depressed. She soon stopped attending
classes. In 1995, she sued Morrison, Crawford, and VT.
In the VAWA, Congress identified which enumerated power they were using. Congress claimed
they were using sect. 5 of the 14th amendment and the Commerce Clause.
Case holding:
Court held that Congress lacked the authority to enact a statute under the Commerce Clause or
the Fourteenth Amendment since the statute did not regulate an activity that substantially
affected interstate commerce nor did it redress harm caused by the state.37
Reasoning:
The activity that Congress is regulating under the commerce clause must be economic in nature.
It is not enough for Congress to just show a nexus between the two, the activity itself must be
economic in nature.
“Congress commerce authority includes the power to regulate those activities having a
substantial relation to interstate commerce, i.e., those activities that substantially affect interstate
commerce.”38
“We accordingly reject the argument that Congress may regulate noneconomic, violent criminal
conduct based solely on that conduct’s aggregate effect on interstate commerce. The Constitution
requires a distinction between what is truly national and what is truly local.”39The court does
point out that the victim is not without redress, but there is no economic activity involved in her
case.
Congress Can Regulate 1. Channels/Transportation 2. Moves across state lines 3. Substantial
relationship/substantial effect on interstate commerce.
Justice Thomas in his concurrence goes further. He wants to get rid of point three in its entirety.
Point three is where the problems lie. What is a substantial relationship of effect? By doing this
37
https://www.oyez.org/cases/1999/99-5
38
U.S. v. Morrison
39
U.S. v. Morrison Merriam Class 11 PowerPoint. Deck 11.
 Frey 18

however, we would be destroying the modern American political apparatus and laying off
millions of workers.
- Raich v. Gonzalez (2005)
Case facts:
In 1996, California relaxed some of its marijuana laws to allow for its use for medical treatments.
Medical marijuana was still a violation of the federal Controlled Substances Act of 1970. The
CSA forbid all manufacturing and possession of marijuana, regardless of if it crossed state lines.
Two women Angel Raich and Diane Monson challenged the constitutionality of the CSA.
Case holding:
The Court held that the commerce clause gave Congress authority to prohibit the local
cultivation and use of marijuana, despite state law to the contrary.
Reasoning40:
There is the majority and the Scalia concurrence.
Majority by Justice Stevens “Our case law firmly establishes Congress’s power to regulate
purely local activities that are part of an economic ‘class of activities’ that have a substantial
effect on interstate commerce.”
Concurrence by Justice Scalia “Congress may regulate noneconomic intrastate activities only
where the failure to do so could undercut its regulation of interstate commerce.” A law cannot be
“necessary & proper” for executing commerce clause “when it violates a constitutional principle
of state sovereignty.” Scalia seemed more inclined to follow the N&P clause then commerce
clause. He is interested in the Hamiltonian view of centralization and that the view that this
legislation is need to fight the war on drugs.
Justice Stevens changed the rule. The Rehnquist Rule was the activity must be economic in
nature. Stevens changed the rule to “being related to a class of activities that have a substantial
effect on interstate commerce.” Big change, classes of activities is different then the activity
itself being economic. There does not seem to be a limit on what would not fall into these
categories.
The majority relies on Wickard by saying that these two cases are very similar to each other.
However, one could argue that is not true. In Wickard, the court was trying to stimulate the
economy, in this case the federal government is trying to kill the market.
So, while the Rehnquist court did put a dent into the commerce clause power, Raich fixes it up
good as knew and drives off into the sunset. There was no long-term revolution that many feared
was coming.

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Dr. Merriam Class 11 PowerPoint. Deck 14.