Con Law · WikiFramers

Part One - The Structure of Government · Module 3

The Commerce Clause

The main engine of federal power across three eras — Gibbons's breadth, the New Deal settlement, and the Lopez-line retrenchment.

Topics

The initial era and the definition of the commerce power. The 1890s to 1937: a limited federal commerce power. 1937 to the 1990s: the broad commerce power. The 1990s to the present: narrowing the commerce power.

Reading list

15 of 15 readings published

  1. Opinion Gibbons v. Ogden 22 U.S. (9 Wheat.) 1 (1824)
  2. Note United States v. E.C. Knight Co. 156 U.S. 1 (1895)
  3. Note Champion v. Ames 188 U.S. 321 (1903)
  4. Note Houston, East & West Texas Railway Co. v. United States (The Shreveport Rate Case) 234 U.S. 342 (1914)
  5. Note Hammer v. Dagenhart 247 U.S. 251 (1918)
  6. Note NLRB v. Jones & Laughlin Steel Corp. 301 U.S. 1 (1937)
  7. Note United States v. Darby 312 U.S. 100 (1941)
  8. Opinion Wickard v. Filburn 317 U.S. 111 (1942)
  9. Note Heart of Atlanta Motel, Inc. v. United States 379 U.S. 241 (1964)
  10. Note Katzenbach v. McClung 379 U.S. 294 (1964)
  11. Note Perez v. United States 402 U.S. 146 (1971)
  12. Opinion United States v. Lopez 514 U.S. 549 (1995)
  13. Note United States v. Morrison 529 U.S. 598 (2000)
  14. Opinion Gonzales v. Raich 545 U.S. 1 (2005)
  15. Opinion (edited) National Federation of Independent Business v. Sebelius 567 U.S. 519 (2012)
  16. Current case Canna Provisions v. Bondi 138 F.4th 602 (1st Cir. May 27, 2025), cert. denied, No. 25-518 (U.S. Dec. 15, 2025) (an as-applied challenge asking whether *Raich* survives the changed federal and state regulatory landscape).

Also assigned

The Federalist No. 42 (Madison), "The Powers Conferred by the Constitution Further Considered." Madison devotes a few paragraphs to the commerce power and treats it as uncontroversial. Ask why the clause that generated the least argument in 1788 generated the most in the two centuries after. — read here: No. 42

Classroom visuals

Slides for this module PDF

Discussion

How Should a Court Decide What Counts as Commerce? on Canvas — sign in required

This module in Canvas

Modules · Quizzes · Discussion boards · Files and recordings

How to read this list

A case named without a marker is assigned as an opinion and is to be read in its entirety. Opinion (edited) means the Professor has cut it for length; the text on this site is the assigned text. Note means the case is not assigned as an opinion at all — its holding, its facts to the extent they matter, and its place in the doctrinal line are given in a note written for this course, and you are responsible for that note exactly as you are responsible for an assigned opinion. Most modules close with a Current case, a recent decision chosen because it shows the doctrine you have just read being applied at its live edge; current cases are assigned as opinions. You are responsible for all assigned required materials, including the notes, questions, problems and commentary that accompany the cases, whether or not we discuss them in class.

Notes

United States v. E.C. Knight Co.

156 U.S. 1 (1895) · Westlaw

The American Sugar Refining Company bought four Philadelphia refineries and thereby controlled something like 98 percent of the nation’s sugar refining. The United States sued under the Sherman Act. It lost, 8–1. Fuller, C.J., held that the acquisition reached manufacture, and “[c]ommerce succeeds to manufacture, and is not a part of it” — a monopoly of manufacturing might affect commerce, but only indirectly, and to call that effect a regulation of commerce would leave nothing beyond federal reach. Notice what the Court is doing. It is not counting how large the effect is; it is asking where in the sequence of production the activity sits, and answering a constitutional question with a taxonomy. Harlan, J., dissenting alone, made the functionalist objection that the next forty years would slowly ratify: the combination was formed precisely in order to control price in the interstate market, and a rule that lets the country be monopolized so long as the monopolist stops short of shipping is a rule that reads the commerce power out of the Constitution at the moment it is needed. Two things to carry forward. First, Knight is the origin of the direct/indirect distinction that Wickard will later refuse to decide cases by — Jackson names this case by name when he says questions of congressional power “are not to be decided by reference to any formula which would give controlling force to nomenclature.” Second, ask yourself throughout the 1890–1937 material whether the Court is being formalist or functionalist, and watch how often it switches inside a single opinion. That question is a target in this course, not background.

Champion v. Ames (The Lottery Case)

188 U.S. 321 (1903) · Westlaw

Congress made it a crime to carry lottery tickets from one State to another. Champion argued that a lottery ticket is not an article of commerce and that, in any event, the power to regulate commerce is not a power to prohibit it. The Court disagreed, 5–4 (Harlan, J.): tickets carried for profit across state lines are subjects of commerce, and Congress’s power over their interstate transportation includes the power to shut the channel entirely. What makes this case worth its place in the module is that it will not reconcile with the case you read next. In Champion, Congress may close the channels of interstate commerce to a thing it considers a moral evil; fifteen years later, in Hammer v. Dagenhart, Congress may not close them to goods made by children. The Court in Hammer tried to distinguish Champion on the ground that lottery tickets are harmful in themselves while cotton cloth is not, so that the evil in the child-labor cases “precedes” the transportation. Test that. Is a lottery ticket harmful in itself, or only because of what people do with it? And if the objection to a federal police power is that Congress would then be able to reach anything, why does that objection not swallow Champion first? I teach this as an unresolved puzzle rather than a solved one. Some people argue there is no way to distinguish the two cases at all. Your job here is not to find the answer. It is to state the distinction in its strongest form, then say exactly where it fails.

Houston, East & West Texas Railway Co. v. United States (The Shreveport Rate Case)

234 U.S. 342 (1914) · Westlaw

Shreveport, Louisiana sits 42 miles from Marshall, Texas and 232 miles from Dallas. Texas railroads, under rates set by Texas authorities, charged far less to haul freight within Texas than the Interstate Commerce Commission allowed them to charge on the interstate run into Shreveport — the intrastate Texas rate ran about 25 cents per hundred miles against better than four times that on the interstate haul. The effect was to hand Texas cities a protected market and cut Shreveport out of it. The ICC ordered the intrastate rates raised to parity, and the railroads objected that intrastate rates are the State’s business. Hughes, J., for the Court: they are, until they are used to injure interstate commerce. Congress’s power extends to matters “having such a close and substantial relation to interstate traffic that the control is essential or appropriate to the security of that traffic … and to the maintenance of conditions under which interstate commerce may be conducted upon fair terms.” This is the first of the three Lopez categories in embryo — the power to protect the instrumentalities of interstate commerce even where the threat comes from purely intrastate activity — and Lopez cites this case for exactly that proposition eighty-one years later. Two things to notice. The Court decided it by looking at economic effect, in 1914, in the middle of the formalist era; Wickard will later point at this case as evidence that the direct/indirect vocabulary was never doing the work it claimed to do. And the whole dispute is a picture: two cities, three distances, two rates. Draw it before you argue about it.

Hammer v. Dagenhart

247 U.S. 251 (1918) · Westlaw

Congress barred from interstate commerce goods produced in factories that employed children under fourteen, or that worked children under sixteen more than eight hours a day. A father sued to protect his two sons’ jobs in a North Carolina cotton mill, and won, 5–4. Day, J.: the goods themselves are harmless, so the statute does not regulate transportation at all — it regulates production, which is local, and it does so in order to standardize the labor laws of the States. That the effect is achieved through a shipping ban does not save it, because “the act in its effect does not regulate transportation among the States, but aims to standardize the ages at which children may be employed.” Champion was distinguished on the ground that there the evil precedes the transportation and here it does not. Watch the Court’s footing shift under it. Holmes, J., dissenting for himself, McKenna, Brandeis and Clarke, made the argument that eventually won: the power to regulate commerce is by its terms unqualified, Congress may prohibit interstate transportation of any article it chooses, and the indirect effect of that prohibition on state policy is neither a constitutional objection nor an unusual one — “it does not matter whether the supposed evil precedes or follows the transportation.” He added the line that carries the moral weight: if there is any matter on which civilized countries have agreed, it is the evil of premature and excessive child labor. Darby overruled this case in 1941 and adopted Holmes’s dissent almost whole, calling its departure from precedent “a novel doctrine” that “should be and now is overruled.” Twenty-three years, and one sentence.

NLRB v. Jones & Laughlin Steel Corp.

301 U.S. 1 (1937) · Westlaw

The switch. Two years after Schechter Poultry held that “the flow in interstate commerce had ceased” before the sick chickens reached the slaughterhouse, and one year after Carter Coal held that employment relations in mining are “purely local” production, the Court upheld the National Labor Relations Act as applied to a steel company that had fired ten union men at its Aliquippa, Pennsylvania plant. Hughes, C.J., 5–4, delivered the sentence the next fifty years were built on: “It is the effect upon commerce, not the source of the injury, which is the criterion.” Jones & Laughlin was a genuinely integrated enterprise — iron ore from Michigan and Minnesota, coal from its own mines, four-fifths of its product shipped out of state — and the Court described a strike at Aliquippa as an event whose effect on interstate commerce “would be immediate and might be catastrophic.” Congress may reach intrastate activity whose relation to interstate commerce is “close and substantial,” though not effects “so indirect and remote” as to obliterate the distinction between national and local. That last clause matters: Lopez quotes it, from this case, as proof that the outer limit was announced in the very opinion that removed the old one. The chronology is worth arguing about. Jones & Laughlin came down on April 12, 1937, two months after Roosevelt proposed to add six Justices to the Court and while the bill was pending; Justice Roberts had already changed sides in a minimum-wage case argued the previous December. Ask whether “the switch in time that saved nine” is history or folklore, and what turns on the answer. Then ask a doctrinal question: after this case, is the “stream of commerce” doctrine still doing any work, or has effect-on-commerce simply absorbed it?

United States v. Darby

312 U.S. 100 (1941) · Westlaw

A Georgia lumber manufacturer was indicted under the Fair Labor Standards Act for paying below the federal minimum wage and shipping the boards out of state. Unanimous, Stone, J., and it does two separate things. First, the shipping ban: Congress may exclude any article it chooses from interstate commerce, and its motive for doing so — here, to stop the spread of substandard labor conditions — is not a judicial concern. Hammer v. Dagenhart is overruled outright, in a paragraph that adopts Holmes’s dissent and says the contrary rule “should be and now is overruled.” Second, and harder, the wage and hour requirements applied to production itself, not to shipment. Those are sustained on a different footing: Congress may regulate intrastate activities that “so affect interstate commerce … as to make regulation of them appropriate means” to an end within its power — with the Wickard aggregation idea already visible in the citation Jackson would use a year later. Then the sentence students remember: the Tenth Amendment “states but a truism that all is retained which has not been surrendered.” It adds nothing; it is a declaration of the relationship, not a substantive limit. Here is the question I want you to sit with: what fears was the Amendment answering, if not precisely the fear that the federal government might do what it is doing in Darby? Hold onto the answer, because the Tenth Amendment does not stay a truism. In Module 3A you will read New York and Printz, where it becomes an enforceable anti-commandeering rule, and you will have to say what changed — the Amendment’s text, the Court’s theory of it, or only the Court.

Heart of Atlanta Motel, Inc. v. United States

379 U.S. 241 (1964) · Westlaw

A 216-room motel two blocks from an interstate highway in downtown Atlanta refused to rent to Black travelers and sued to have Title II of the Civil Rights Act of 1964 declared unconstitutional. Unanimous, Clark, J. Seventy-five percent of the motel’s guests came from out of state; it advertised nationally; and Congress had before it a record of what the opinion calls “the qualitative as well as quantitative effect” of racial discrimination on interstate travel — the burden of not knowing where one could sleep. That is enough. The power to regulate commerce reaches local activity with a substantial and harmful effect on it, and the fact that Congress was also acting on a moral judgment does not disable it: “Congress was not restricted by the fact that the particular obstruction to interstate commerce with which it was dealing was also deemed a moral and social wrong.” Here is the thing to press on. Congress had a Fourteenth Amendment available and did not use it, because The Civil Rights Cases (1883) had held §5 powerless against private discrimination and nobody wanted to bet the statute on overruling it. So the great civil rights statute of the twentieth century rests on the power to regulate trade between States. Douglas, J., concurring, said he would have grounded it in §5 instead and found it “a bit disquieting” that the vindication of human dignity should turn on a commerce rationale. Subtext, anyone? Ask what is lost when a right is protected under a clause that is not about rights — and whether anything at all is lost, if the practical result is identical. Then read Katzenbach v. McClung, decided the same day, and see how far the rationale stretches.

Katzenbach v. McClung

379 U.S. 294 (1964) · Westlaw

Ollie’s Barbecue was a family restaurant on a Birmingham side street, eleven blocks from the nearest interstate highway. It seated Black customers only at a takeout counter. It served almost no travelers. And it lost, unanimously, on the same day as Heart of Atlanta — but not on the same reasoning, and the difference is the whole point. Heart of Atlanta was about outputs: the motel’s customers moved in interstate commerce, so the discrimination burdened the traffic directly. Ollie’s customers did not. What moved in interstate commerce was the inputs — roughly $70,000 of meat a year bought from a local supplier who had bought it out of state, about 46 percent of what the restaurant purchased. Clark, J., for the Court: Congress had evidence that discrimination in restaurants sold less interstate food, discouraged Black professionals from moving to segregated communities, and obstructed interstate travel; the question for a court is only whether Congress had a rational basis for finding that the class of activity affects commerce and whether the means chosen are reasonable, and “where we find that the legislators, in light of the facts and testimony before them, have a rational basis for finding a chosen regulatory scheme necessary to the protection of commerce, our investigation is at an end.” Black, J., concurring, thought the aggregate effect of many such restaurants was the real ground. So: does the inputs theory answer Douglas’s worry from Heart of Atlanta, or make it worse? If the constitutional status of Ollie’s conduct turns on where his supplier bought the beef, the rule has been stated in a way that has nothing to do with why the conduct is wrong. Note also what rational basis is doing here in 1964, and compare it with Lopez thirty-one years later, where a congressional record was demanded and, on being produced in Morrison, held not enough.

Perez v. United States

402 U.S. 146 (1971) · Westlaw

Alcides Pérez was a New York loan shark. He lent a butcher $1,000, collected roughly $2,000 over three months by threatening the man’s life and family, and was convicted under Title II of the Consumer Credit Protection Act, which makes “extortionate credit transactions” a federal crime. Nothing in his conduct crossed a state line, and the statute required no proof that any of it did. Affirmed, 8–1 (Douglas, J.), and this is the case that gives the modern doctrine its shape. Douglas set out three categories of activity Congress may reach under the commerce power: the use of the channels of interstate commerce; the instrumentalities of interstate commerce, or persons or things in it, even where the threat is purely intrastate — the destruction of an aircraft, thefts from interstate shipments; and activities affecting commerce. Extortionate credit falls in the third. Congress had found that loan sharking is a principal source of revenue for organized crime, and where a class of activities is within the reach of federal power, “the courts have no power ‘to excise, as trivial, individual instances’ of the class.” Stewart, J., dissenting alone, made the objection to remember: loan sharking is a local crime, Congress made no finding that Pérez or anyone like him was connected to interstate crime, and “it is not enough to say that loan sharking is a national problem, for all crime is a national problem.” Two things travel from here. Lopez takes the three categories from this case, restates them, and refuses to add a fourth. And in my own version of the test, Step 1 belongs to Pérez and López together. The three categories come from Pérez. The discipline about how far the third one reaches comes from Lopez.

United States v. Morrison

529 U.S. 598 (2000) · Westlaw

Christy Brzonkala sued two Virginia Tech football players under §13981 of the Violence Against Women Act, which gave victims of gender-motivated violence a federal civil action against the aggressor. The Court struck the provision down, 5–4 (Rehnquist, C.J.), by the same alignment as Lopez, and the opinion is best read as Lopez with one variable changed. Gender-motivated violence, like gun possession in a school zone, is not economic activity; the statute has no jurisdictional element; and the traditional state concern — here the regulation of intrastate violence and family law — cuts against federal power. But there is a difference, and it is the reason this case earns its own place. Congress this time did the homework. Four years of hearings produced a mountain of findings on the cost of gender-motivated violence to the national economy, exactly the record whose absence Lopez had noticed. The Court held it insufficient: the findings rested on “a method of reasoning that we have already rejected as unworkable if we are to maintain the Constitution’s enumeration of powers,” because the same but-for causal chain would let Congress regulate family law and every other traditional state subject. “[T]he existence of congressional findings is not sufficient, by itself, to sustain the constitutionality of Commerce Clause legislation.” On the board I put this as Congress saying so does not make it so. The sharper way to say it is that the Court is giving Congress less deference than it used to. Factor 2 is not a checklist item that a diligent Congress can satisfy; after Morrison it is a judgment the Court reserves to itself. Souter, J., dissenting, said the majority had revived Carter Coal’s categorical formalism under a new name and asked why a Congress that produced this record should be trusted less than the Congress in Katzenbach, which produced almost none. That is the question. Answer it before class.