Wickard v. Filburn

[Justice Jackson delivered the opinion of the Court, for a unanimous bench. The opinion’s first section, holding that a radio address by the Secretary of Agriculture did not invalidate the farmers’ referendum on wheat quotas, is omitted.]

The appellee for many years past has owned and operated a small farm in Montgomery County, Ohio, maintaining a herd of dairy cattle, selling milk, raising poultry, and selling poultry and eggs. It has been his practice to raise a small acreage of winter wheat, sown in the Fall and harvested in the following July; to sell a portion of the crop; to feed part to poultry and livestock on the farm, some of which is sold; to use some in making flour for home consumption; and to keep the rest for the following seeding. The intended disposition of the crop here involved has not been expressly stated.

In July of 1940, pursuant to the Agricultural Adjustment Act of 1938, as then amended, there were established for the appellee’s 1941 crop a wheat acreage allotment of 11.1 acres and a normal yield of 20.1 bushels of wheat an acre. He was given notice of such allotment in July of 1940, before the Fall planting of his 1941 crop of wheat, and again in July of 1941, before it was harvested. He sowed, however, 23 acres, and harvested from his 11.9 acres of excess acreage 239 bushels, which under the terms of the Act as amended on May 26, 1941, constituted farm marketing excess, subject to a penalty of 49 cents a bushel, or $117.11 in all.

The general scheme of the Agricultural Adjustment Act of 1938 as related to wheat is to control the volume moving in interstate and foreign commerce in order to avoid surpluses and shortages and the consequent abnormally low or high wheat prices and obstructions to commerce. Within prescribed limits and by prescribed standards the Secretary of Agriculture is directed to ascertain and proclaim each year a national acreage allotment for the next crop of wheat, which is then apportioned to the states and their counties, and is eventually broken up into allotments for individual farms.

[Marketing is defined by the Act to include disposition “by feeding (in any form) to poultry or livestock which, or the products of which, are sold, bartered, or exchanged.” So:] marketing quotas not only embrace all that may be sold without penalty but also what may be consumed on the premises. Wheat produced on excess acreage is designated as “available for marketing” as so defined, and the penalty is imposed thereon. Penalties do not depend upon whether any part of the wheat, either within or without the quota, is sold or intended to be sold. The sum of this is that the Federal Government fixes a quota including all that the farmer may harvest for sale or for his own farm needs, and declares that wheat produced on excess acreage may neither be disposed of nor used except upon payment of the penalty, or except it is stored as required by the Act or delivered to the Secretary of Agriculture.

Appellee says that this is a regulation of production and consumption of wheat. Such activities are, he urges, beyond the reach of Congressional power under the Commerce Clause, since they are local in character, and their effects upon interstate commerce are at most “indirect.” In answer the Government argues that the statute regulates neither production nor consumption, but only marketing; and, in the alternative, that if the Act does go beyond the regulation of marketing it is sustainable as a “necessary and proper” implementation of the power of Congress over interstate commerce.

The Government’s concern lest the Act be held to be a regulation of production or consumption, rather than of marketing, is attributable to a few dicta and decisions of this Court which might be understood to lay it down that activities such as “production,” “manufacturing,” and “mining” are strictly “local” and, except in special circumstances which are not present here, cannot be regulated under the commerce power because their effects upon interstate commerce are, as matter of law, only “indirect.” Even today, when this power has been held to have great latitude, there is no decision of this Court that such activities may be regulated where no part of the product is intended for interstate commerce or intermingled with the subjects thereof. We believe that a review of the course of decision under the Commerce Clause will make plain, however, that questions of the power of Congress are not to be decided by reference to any formula which would give controlling force to nomenclature such as “production” and “indirect” and foreclose consideration of the actual effects of the activity in question upon interstate commerce.

At the beginning Chief Justice Marshall described the federal commerce power with a breadth never yet exceeded. Gibbons v. Ogden, 9 Wheat. 1, 194–195. He made emphatic the embracing and penetrating nature of this power by warning that effective restraints on its exercise must proceed from political rather than from judicial processes. Id. at 197.

For nearly a century, however, decisions of this Court under the Commerce Clause dealt rarely with questions of what Congress might do in the exercise of its granted power under the Clause, and almost entirely with the permissibility of state activity which it was claimed discriminated against or burdened interstate commerce. During this period there was perhaps little occasion for the affirmative exercise of the commerce power, and the influence of the Clause on American life and law was a negative one. In discussion and decision the point of reference, instead of being what was “necessary and proper” to the exercise by Congress of its granted power, was often some concept of sovereignty thought to be implicit in the status of statehood. Certain activities such as “production,” “manufacturing,” and “mining” were occasionally said to be within the province of state governments and beyond the power of Congress under the Commerce Clause.

It was not until 1887, with the enactment of the Interstate Commerce Act, that the interstate commerce power began to exert positive influence in American law and life. This first important federal resort to the commerce power was followed in 1890 by the Sherman Anti-Trust Act and, thereafter, mainly after 1903, by many others. These statutes ushered in new phases of adjudication, which required the Court to approach the interpretation of the Commerce Clause in the light of an actual exercise by Congress of its power thereunder.

When it first dealt with this new legislation, the Court adhered to its earlier pronouncements, and allowed but little scope to the power of Congress. United States v. Knight Co., 156 U. S. 1. These earlier pronouncements also played an important part in several of the five cases in which this Court later held that Acts of Congress under the Commerce Clause were in excess of its power.²¹

Footnote 21 — the five

Employers’ Liability Cases, 207 U. S. 463; Hammer v. Dagenhart, 247 U. S. 251; Railroad Retirement Board v. Alton R. Co., 295 U. S. 330; Schechter Corp. v. United States, 295 U. S. 495; Carter v. Carter Coal Co., 298 U. S. 238.

[Note the arithmetic. Between 1887 and 1942 the Court invalidated federal commerce legislation five times. It would not do so again until Lopez in 1995 — a gap of fifty-three years.]

Even while important opinions in this line of restrictive authority were being written, however, other cases called forth broader interpretations of the Commerce Clause destined to supersede the earlier ones, and to bring about a return to the principles first enunciated by Chief Justice Marshall in Gibbons v. Ogden.

Not long after the decision of United States v. Knight Co., Mr. Justice Holmes, in sustaining the exercise of national power over intrastate activity, stated for the Court that “commerce among the States is not a technical legal conception, but a practical one, drawn from the course of business.” Swift & Co. v. United States, 196 U. S. 375, 398. It was soon demonstrated that the effects of many kinds of intrastate activity upon interstate commerce were such as to make them a proper subject of federal regulation. In some cases sustaining the exercise of federal power over intrastate matters the term “direct” was used for the purpose of stating, rather than of reaching, a result; in others it was treated as synonymous with “substantial” or “material”; and in others it was not used at all. Of late its use has been abandoned in cases dealing with questions of federal power under the Commerce Clause.

In the Shreveport Rate Cases, 234 U. S. 342, the Court held that railroad rates of an admittedly intrastate character and fixed by authority of the state might, nevertheless, be revised by the Federal Government because of the economic effects which they had upon interstate commerce. The opinion of Mr. Justice Hughes found federal intervention constitutionally authorized because of “matters having such a close and substantial relation to interstate traffic that the control is essential or appropriate to the security of that traffic, to the efficiency of the interstate service, and to the maintenance of conditions under which interstate commerce may be conducted upon fair terms and without molestation or hindrance.” Id. at 351.

The Court’s recognition of the relevance of the economic effects in the application of the Commerce Clause has made the mechanical application of legal formulas no longer feasible. Once an economic measure of the reach of the power granted to Congress in the Commerce Clause is accepted, questions of federal power cannot be decided simply by finding the activity in question to be “production,” nor can consideration of its economic effects be foreclosed by calling them “indirect.”

Whether the subject of the regulation in question was “production,” “consumption,” or “marketing” is, therefore, not material for purposes of deciding the question of federal power before us. That an activity is of local character may help in a doubtful case to determine whether Congress intended to reach it. The same consideration might help in determining whether in the absence of Congressional action it would be permissible for the state to exert its power on the subject matter, even though in so doing it to some degree affected interstate commerce. But even if appellee’s activity be local and though it may not be regarded as commerce, 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 effect is what might at some earlier time have been defined as “direct” or “indirect.”

The parties have stipulated a summary of the economics of the wheat industry. Commerce among the states in wheat is large and important. Although wheat is raised in every state but one, production in most states is not equal to consumption. Sixteen states on average have had a surplus of wheat above their own requirements for feed, seed, and food. Thirty-two states and the District of Columbia, where production has been below consumption, have looked to these surplus-producing states for their supply as well as for wheat for export and carry-over.

[The Court sets out the world market: exports had fallen from more than a quarter of production in the 1920s to under a tenth by 1940, leaving a domestic surplus that congested markets, tied up railroad cars and forced elevators to turn grain away.]

The effect of consumption of home-grown wheat on interstate commerce is due to the fact that it constitutes the most variable factor in the disappearance of the wheat crop. Consumption on the farm where grown appears to vary in an amount greater than 20 per cent of average production. The total amount of wheat consumed as food varies but relatively little, and use as seed is relatively constant.

The maintenance by government regulation of a price for wheat undoubtedly can be accomplished as effectively by sustaining or increasing the demand as by limiting the supply. The effect of the statute before us is to restrict the amount which may be produced for market and the extent as well to which one may forestall resort to the market by producing to meet his own needs. That appellee’s own contribution to the demand for wheat may be trivial by itself is not enough to remove him from the scope of federal regulation where, as here, his contribution, taken together with that of many others similarly situated, is far from trivial.

It is well established by decisions of this Court that the power to regulate commerce includes the power to regulate the prices at which commodities in that commerce are dealt in and practices affecting such prices. One of the primary purposes of the Act in question was to increase the market price of wheat, and to that end to limit the volume thereof that could affect the market. It can hardly be denied that a factor of such volume and variability as home-consumed wheat would have a substantial influence on price and market conditions. This may arise because being in marketable condition such wheat overhangs the market and, if induced by rising prices, tends to flow into the market and check price increases. But if we assume that it is never marketed, it supplies a need of the man who grew it which would otherwise be reflected by purchases in the open market. Home-grown wheat in this sense competes with wheat in commerce. The stimulation of commerce is a use of the regulatory function quite as definitely as prohibitions or restrictions thereon. This record leaves us in no doubt that Congress may properly have considered that wheat consumed on the farm where grown, if wholly outside the scheme of regulation, would have a substantial effect in defeating and obstructing its purpose to stimulate trade therein at increased prices.

It is said, however, that this Act, forcing some farmers into the market to buy what they could provide for themselves, is an unfair promotion of the markets and prices of specializing wheat growers. It is of the essence of regulation that it lays a restraining hand on the self-interest of the regulated and that advantages from the regulation commonly fall to others. The conflicts of economic interest between the regulated and those who advantage by it are wisely left under our system to resolution by the Congress under its more flexible and responsible legislative process. Such conflicts rarely lend themselves to judicial determination. And with the wisdom, workability, or fairness, of the plan of regulation we have nothing to do.

III

[Filburn also argued that the Act deprived him of property without due process, because the amendment of May 26, 1941 raised the penalty from 15 cents to 49 cents a bushel and swept in wheat that had previously been subject to no penalty at all — and did so after he had planted. The Court disagreed.]

It is not to be denied that between seed time and harvest important changes were made in the Act which affected the desirability and advantage of planting the excess acreage. [Under the earlier law the quota was the greater of normal or actual production on the allotted acreage, and the penalty on excess marketings was 15 cents. The amendment redefined the quota, subjected the “farm marketing excess” to a 49-cent penalty, authorized a corresponding increase in the loan available on stored excess wheat, and made the whole crop a lien for the penalty.]

The penalty provided by the amendment can be postponed or avoided only by storing the farm marketing excess according to regulations promulgated by the Secretary or by delivering it to him without compensation; and the penalty is incurred and becomes due on threshing. Thus the penalty was contingent upon an act which appellee committed not before but after the enactment of the statute, and had he chosen to cut his excess and cure it or feed it as hay, or to reap and feed it with the head and straw together, no penalty would have been demanded. Such manner of consumption is not uncommon. Only when he threshed and thereby made it a part of the bulk of wheat overhanging the market did he become subject to penalty. He has made no effort to show that the value of his excess wheat consumed without threshing was less than it would have been had it been threshed while subject to the statutory provisions in force at the time of planting. Concurrently with the increase in the amount of the penalty, Congress authorized a substantial increase in the amount of the loan which might be made to cooperators upon stored farm marketing excess wheat. That appellee is the worse off for the aggregate of this legislation does not appear; it only appears that, if he could get all that the Government gives and do nothing that the Government asks, he would be better off than this law allows. To deny him this is not to deny him due process of law.

[It is hardly lack of due process for the Government to regulate that which it subsidizes.]

Reversed.

Notes & Questions

1. Big picture. Wickard is usually taught as the moment the commerce power became unlimited, and that reading is available: a man is penalized for growing food on his own land and feeding it to his own animals, and the constitutional hook is that he thereby failed to buy something. But read what Jackson actually says he is doing. He is not enlarging the power; he is refusing a vocabulary. The whole middle of the opinion is a history of words — “production,” “manufacturing,” “mining,” “direct,” “indirect” — and the argument is that these words were never doing the work courts claimed for them, that “direct” was sometimes used “for the purpose of stating, rather than of reaching, a result,” and that its use has now “been abandoned.” Ask which is the more radical move: extending a power, or taking away the language in which limits on that power had been expressed. Then notice that fifty-three years later Lopez will need a new vocabulary — “economic,” “noneconomic” — to state a limit at all, and ask whether the new words are any more load-bearing than the old ones.

2. Raw specific knowledge — get the numbers exactly right, because they are the argument. Allotment: 11.1 acres. Normal yield: 20.1 bushels per acre. He sowed 23 acres. Excess: 11.9 acres. Harvested from the excess: 239 bushels. Penalty: 49 cents a bushel, $117.11 in all — raised from 15 cents after he planted. State (a) what the aggregation principle holds, in one sentence, using the Court’s words “taken together with that of many others similarly situated”; (b) the two independent mechanisms by which home-consumed wheat affects the interstate price — the overhang mechanism and the forestalled purchase mechanism — and be able to say which one applies to a farmer who genuinely never sells a bushel; and (c) the holding of Part III, which almost nobody remembers: the mid-season increase in the penalty was not an unconstitutional retroactive taking, because the penalty attached on threshing, an act he performed after the amendment.

3. Practical application. A federal statute establishes a national market in residential solar generation and, to prevent the scheme’s being undercut, penalizes homeowners who generate more than a set number of kilowatt-hours for their own use without selling into the grid. Your client generates 118 percent of the cap and consumes all of it herself. (a) Write the Government’s brief in three sentences, using Wickard’s two mechanisms by name. (b) Write your client’s brief in three sentences, using Lopez and Morrison. (c) Now the harder part: identify the single fact you would most want to add to the record, and say which side it helps. (d) Does it matter whether the statute exempts small producers? Justice O’Connor will argue in Raich that the wheat program’s exemption for small farms is what keeps Wickard from reaching “the home cook’s herb garden,” and the Raich majority will answer that the exemption “[did not] play any role in the Court’s analysis.” Decide which of them is reading this opinion correctly — the text is above.

4. Attack the reasoning. “Home-grown wheat in this sense competes with wheat in commerce.” That sentence does enormous work, so test it. (a) If not buying wheat is competing with wheat, what does a person have to do in order not to be participating in the wheat market? Sleeping is not buying wheat. (b) Jackson’s answer, if he has one, is that Filburn was doing something — growing, harvesting, threshing — and that the regulation attaches to the activity, not the abstention. Find the sentence in Part III that makes this concrete (the one about cutting and curing it as hay). Is the constitutional line really the difference between threshing and not threshing? (c) In NFIB the Chief Justice will say that “[t]he farmer in Wickard was at least actively engaged in the production of wheat,” and Justice Ginsburg will answer that the Act “forc[ed] some farmers into the market to buy what they could provide for themselves” — a phrase she takes from this very opinion, which you have just read. Both of them are quoting Wickard accurately. Explain how that is possible.

5. Creative thinking. Jackson gives away the strongest objection to his own opinion and then declines to answer it: the Act forces some farmers into the market to buy what they could provide for themselves, and this is an “unfair promotion of the markets and prices of specializing wheat growers.” His response is that redistribution is “of the essence of regulation” and that such conflicts “rarely lend themselves to judicial determination.” Two exercises. (a) Rewrite that passage as a dissent — the dissent no one filed, since the Court was unanimous — in under 250 words, taking Jackson’s own premises seriously rather than denying that the wheat market affects commerce. (b) Then rewrite the Commerce Clause itself, in under thirty words, so that it authorizes the Agricultural Adjustment Act but not the Gun-Free School Zones Act. If you find that you cannot, say precisely where the difficulty lies — and whether it lies in the drafting or in the belief that the two cases are actually distinguishable.