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Contents

Commerce Power
The Three Main Questions ......................................................................... 3
The Three Eras ........................................................................................... 4
Gibbons v. Ogden (1824) ............................................................................ 5
United States v E.C. Knight Co. (1895) ..................................................... 6
Carter v. Carter Coal (1936) ........................................................................ 7
Houston Ry. v U.S. (1914) ......................................................................... 8
Schechter Poultry v U.S. (1935) ................................................................. 9
Champion v. Ames (Lottery Case 1903) .................................................. 10
Hammer v Dagenhart (The Child Labor Case 1918) ................................. 11
NLRB v. Jones & Laughlin Steel Corp. (1937) ......................................... 12
US v. Darby (1941) ................................................................................... 13
Wickard v. Filburn (1942) .......................................................................... 14
Heart of Atlanta Motel v US ...................................................................... 15
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Commerce Power

The Three Main Questions ............................................................................ 3

The Three Eras .............................................................................................. 4
Gibbons v. Ogden (1824) ............................................................................... 5
United States v E.C. Knight Co. (1895) ......................................................... 6
Carter v. Carter Coal (1936) ........................................................................... 7
Houston Ry. v U.S. (1914) ............................................................................. 8
Schechter Poultry v U.S. (1935) .................................................................... 9
Champion v. Ames (Lottery Case 1903) ...................................................... 10
Hammer v Dagenhart (The Child Labor Case 1918) .................................... 11
NLRB v. Jones & Laughlin Steel Corp. (1937) ............................................. 12
US v. Darby (1941) ...................................................................................... 13
Wickard v. Filburn (1942) ............................................................................. 14
Heart of Atlanta Motel v US ......................................................................... 15
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Commerce Power
The Three Main Questions

Article 1 § 8: “ the Congress shall have the power to regulate commerce with
foreign nations and among the several states and with Indian tribes “.

1937 until the 1990s was a time when the court expansively define the scope of
the Commerce Power and refuse to apply the 10th amendment as a limit. Since
the 1990s records again narrowed the scope of the Commerce Power and revive
the 10th amendment as an independent judiciary enforceable women on Federal
action

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1. What is Commerce?
Gibbons was the first case to consider the scope of the commerce clause. First
the court considered what commerce meant. It is not just traffic, it is intercourse,
between nations and part of nations in all its branches, and is regulated by the
prescribing rules for carrying on that intercourse.

According to Gibbons, Commerce includes all phases of business.

2. What is Among the States?

Is Congress limited to regulating commerce only when it is interstate? Is intrastate
outside Congress power because it is not among the states?
A thing which is among is intermingled and does not stop at the boundary line
of each state, but may be introduced into the interior. The court did not choose
the more broad definition of "in the midst of" Had the court adopted that
definition, all commerce in the US would be regulated.
The completely internal commerce of a state then may be reserved for the state
itself. The court made it clear that Congress could regulate intrastate commerce
if if it had an impact on interstate activities
The court had three definitions of among to choose from.
1. One would have been to make intrastate beyond the scope of congressional
power
2. To define among as including more than one state.
To define among as in the midst of, in which all commerce could be regulated
because it is all in the midst of.
In Gibbons the court chose the middle definition. Unfortunately, this definition
requires case-by-case determination and does not make a bright line like the
others.
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Commerce Power
The Three Main Questions

3. Does State Sovereignty limit congressional power.

In Gibbons, the court emphatically rejected any such constraint. The Power is
vested an complete. As it should be in a single government. COngress has
complete authority to regulate all commerce among the states. COngress can
regulate in the same way as if no state governments existed.
SInce Gibbons, the court ha not consistently followed this approach.
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Commerce Power
The Three Eras

Cases Before 1887

Relatively few cases were considered outside of Gibbons until after the civil war
related to commerce. Then there were a few cases considering the scope of the
power.
They were very broad using the Gibbons rule. In one case, The Daniel Ball,
Congress was able to license intrastate ships as long as they were carrying
goods that had come from other states.

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Other departed from Gibbons and limited the Commerce Power
United States v. Dewitt (1869)- A Federal Law outlawed certain chemicals. The
Court held that the law was a police regulation relating exclusively to the
internal trade of the states. And Congress had no power to interfere with the
internal trade.
In the Trademark Cases (1878) - The court invalidated a federal system for
registering trademarks. because ti applied the wholly intrastate business and
therefore a power not codified by congress.
1890 -1937 - A limited Federal Commerce Power.
This era is extremely important. It is the first time that the Supreme Court
aggressively used its power of judicial review to invalidate state laws.
Constitutional law after 1937, has been primarily a reaction to this era. The court
did not invalidate another law exceeding the scope of the commerce clause until
1995.
The court philosophy during this era was termed "dual federalism". which was the
view that the federal and state governments were separate sovereigns and each
had a zone of authority and that it was the judicial role to protect the states
through enforcing the constitution to protect the zones reserved to the states.
Beginning in the 1890s, Congress took a very different approach than they did in
Gibbons. Regulatory matters were being left to the States. The court applied the
tenth amendment to reserve a zone of activities for exclusive state control
invalidating federal laws that were within the commerce power but usurped the
states.
To understand the following cases, it is critical to know that the SC majority were
committed to a unregulated economy. They were against regulatory interference.
These doctrines reflect the court's view of the proper role of government and the
appropriate role of the court.
Beginning in the 1890s, Congress took a very different approach than they did in
Gibbons. Regulatory matters were being left to the States. The court applied the
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Commerce Power
The Three Eras
Gibbons. Regulatory matters were being left to the States. The court applied the
tenth amendment to reserve a zone of activities for exclusive state control
invalidating federal laws that were within the commerce power but usurped the
states.
The court defined three doctrines
1. It narrowly defined "commerce"
US v EC Knight. (Sherman Antitrust) - Federal law could not be applied
because the monopoly was in sugar production not in commerce. This was
because of the zone of activities that were cleared for the states
Carter v. Carter Coal Co.
2. The Court applied a restrictive interpretation of what "among the states" means.
There must be a direct effect on interstate commerce
Schecter Poultry - Federal law was unconstitutional based on insufficient
effect of interstate commerce. There was no direct relationship.
Shreveport Rate Cases - Court upheld the ability to of the interstate
Commerce Commission to set intrastate railroad rates because of there
direct impact on interstate commerce
The difficulty is in drawing the distinction between direct and indirect effects.
The court struggled with this throughout the era.
✓ One approach was to allow congress to regulate the stream of
commerce.
Swift v US - Upheld Sherman Antitrust among meat dealer to fix prices.
Although the stockyards were intrastate, they were only a stop interstate.
Stafford v Wallace - Upheld the Packers and Stockyards Act which gave the
Secretary of Commerce the right to fix rates. They were just being held there
for a time in the stream.
3. The Court held that Congress violates the tenth amendment when it regulates
matters left to state governments,
Even if an activity was commerce and was among the states, Congress could
not regulate if it was intruding into the zone of activities reserved for the states.
The Tenth amendment reserved control of activities such as minim,
manufacturing and production.
The Child Labor Case (Hammer v. Dagenhart) - the most significant tenth
amendment decision. A federal LAw prohibited interstate commerce for good
made by Children but it was declare unconstitutional because it controlled
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Commerce Power
The Three Eras
made by Children but it was declare unconstitutional because it controlled
production, which is reserved for the states.
The far reaching result of upholding the act cannot be more plainly
indicated than by pointing out that if congress can thus regulate matters
entrusted to local authority by prohibition of movement of commodities in
interstate commerce, all freedom of commerce will be at an end.
The Commerce Clause from 1937-1995
By 1937, there was great pressure to change the Constitution with the New Deal.
Many different types of pressure came to bear on changing constitutional law but
the court was still laissez faire. The distinction placed on indirect and direct effects
on Commerce were arbitrary (i.e. mining etc) ANd the economic crisis made the
laissez faire doctrine even worse and political pressure for change erupted.

This was when Roosevelt tried to add justices to the supreme court to change its
makeup. He ultimately gained 6 seats he needed to get his New Deal programs
through. (there is no number requirement on justices in the Constitution)
Three key decision overruled th earlier decisions and expanded the scope of
Congress' power. And because of this, not one federal law was declared
unconstitutional in the is era.
1. NLRB v. Jones & Laughlin Steel Corp. (1937) - involved a Constitutional
Challenge to the NAtional Labor relations Act. which created a right to
collective bargaining. It applied when there was an affect on commerce.
The Court initially explained how the steel business were a part of the
stream of commerce and labor relations had a direct effect on it. It Flatly
declared that the employees engaged in production did not mater.
2. US v Darby (1941) - Challenge to the constitutionality of the Fair Labor
Standards Act of 1938. Prohibited SHipment of goods by employers who
did not pay minimum wage. UPheld, it departed from all previous
doctrines. The Court rejected the view that production was solely
regulated by the states. MOst importantly, the Court overrules Dagenhart
and rejected the tenth amendment limits. Now, the law is constitutional so
long as it is within the scope of congress; power.
3. Wickard v. Filburn (1941) - left no doubt that the pre-1937 doctrines had
been abandoned. The Agricultural adjustment Act limited Wheat
production but Filburn went over his allotment because he was only using it
for consumption not commerce. The COurt flatly rejected the commerce
power enforced in the earlier era. Distinction between commerce and
production or direct or indirect effects no longer applied. It upheld the act
because the cumulative effect on commerce of many farmers all eating
their own wheat had a substantial effect on
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Commerce Power
The Three Eras
their own wheat had a substantial effect on
These three cases adopt broad definitions of "commerce" and "among the states"
and reject the Tenth amendment as a limit on Congress' power. Commerce
includes all stages of business and there is no longer a distinction between
production and manufacturing etc. Congress can regulate any activity, intrastate
or interstate, that has a substantial effect on interstate commerce. Darby is
simply a reminder that the tenth amendment is simply a reminder that congress,
to legislate must point to an express or implied power. It no longer reserves a
zone of activity for the states.
The Test for the Commerce Clause after 1937
After 1937 until 1995, not one federal law was declared unconstitutional as
exceeding the scope of the commerce power. In some cases, the court even
deleted the word "substantial" and COngress could regulate as long a there was a
rational basis for believing there was an effect on commerce.
Hodel v Indiana (1981) - " a court may invalidate legislation enacted under the
Commerce Clause only if ti is clear that there is no rational basis for a
congressional finding that the regulated activity effects interstate commerce or
that there is a reasonable connection between the regulatory means selected
and the asserted ends."
Civil Rights Laws
Among the most important laws ever adopted is the Civil Rights Act of 9164
which prohibits private employment discrimination. Logically it would seem
most justified under the Fourteenth Amendment, but private behavior could not
be regulated under the Fourteenth. So Congress chose the commerce clause.
Heart of Atlanta Motel v U.S. (1964) The Court upheld the constitutionality of
the Civil Rights Act to a Motel which would not admit Blacks. The only question
was (1) whether Congress had a rational basis for finding that discrimination at
motels affected commerce and (2) that the means it selected to eliminate that
evil was reasonable and appropriate
Regulatory Laws
A key aspect of government since 1937 has been the proliferation of
government agencies which came because of the broad commerce clause.
This includes anything that can potentially ship across state lines including
stocks and insurance policies.
Congress can regulate all intrastate activities as long as their is a rational basis.
Also, Congress can regulate intrastate activities if necessary to protect its
regulation of interstate activities. The regulator power extends even after an
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Commerce Power
The Three Eras
regulation of interstate activities. The regulator power extends even after an
item has been shipped in interstate commerce.
Criminal Laws
Perez v US (1971) - Title II of the Consumer Credit Protection Act Prohibited
loan sharking activities. Defendant said that he operated wholly in NY and
there was no evidence that he was part of organized crime. COurt concluded
that loan sharking had substantial impact on interstate commerce.
Particularized findings were unnecessary as long as congress had a rational
belief that intrastate sharking affected interstate commerce.
After Perez, Congress enacted RICO. which makes it a federal crime for any
person employed by or associate with any enterprise engaged in or affect
commerce in a pattern of racketeering activity. Racketeering is broadly defined
to include gambling, prostitution, obscenity, bribery, extortion, and arson.
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Commerce Power
Gibbons v. Ogden (1824)

Facts: Thew New york legislature granted a steamboat monopoly to Robert Fulton
which he licensed to Ogden. Gibbons had a competing Ferry Service. Ogden
successfully got an injunction against Gibbons due to his monopoly. Gibbons said
that he had a right to operate his Ferry due to federal statute.
Issue: What is the scope of the Commerce clause and can a state exercise power
over a federal statute?
Rule: Congress shall regulate commerce and has priority over competing state

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statutes.
Reasoning
Commerce power, although general, like the clause to collect taxes, is something
specifically delineated to the government. So when a State regulates commerce
between states then it is going against specifically mandated federal powers.
Taxes by the states on the other hand do not keep the Feds from exercising its
power to tax.
Gibbons argues that "to regulate" is to have full power over the thing. and the
court agrees.
When states regulate their own internal affairs and those acts interfere with acts
of congress, then there is an interference with a citizens federal rights. And the
state laws must yield to federal laws.
Reversed
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Commerce Power
United States v E.C. Knight Co. (1895)

What is commerce?
Facts: AMerican Sugar Refining Company is a New Jersey Corporation. The other
four companies were incorporate din PA and held 33% of the sugar market and
competitor of the ASRC. ASRC bought all the other sugar company in the country.
The ASRC bought out the stock of the four PA companies, independent and without
their knowledge of the monopoly created. ASRC then controlled 90% of the market,
Issue: May congress suppress a monopoly on manufacture of good before they

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enter the stream of commerce.
Holding No. Manufacturing is separate from commerce because it happens before
any interstate transportation and congress has no power.
Reasoning
Control of manufacturing or monopolies might restrain trade but that is indirect.
Here, Congress did not attempt to deal with the monopoly directly, or restrict
corporation created by he states, or or make it criminal. The power to regulate
commerce is the power to prescribe the rule b which commerce will be governed
and is a power independent of that to suppress a monopoly
Ruling Affirmed
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Commerce Power
Carter v. Carter Coal (1936)

Facts: The Bituminous Coal Conservation Act of 1935 - to stabilize the mining
industry, promote interstate commerce, conserve resources etc. The
constitutionality of the act was challenged. The acts real purpose was to fix prices
at all local mines. Labor provisions allowed for bargaining by miners, independently,
without interference or coercion.
Issue Can congress legislate local labor management relations under the
commerce clause

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Holding - Local working conditions cannot be regulated by congress under the
commerce clause.
Reasoning
What is Commerce? Intercourse for the purpose of trade. Including
transportation, purchase and sale of commodities. it also embraces the
instruments for which it is to be carried on. A pretension as far reaching as this
would extend to contracts between citizens, and control everybody. But incident
leading up to and culminating in mining do not constitute such intercourse. The
workers relation to employers are local in character and have nothing to do with
commerce. None of these negotiations have anything to do with interstate
commerce. It kay have a secondary effects but that is not enough.
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Commerce Power
Houston Ry. v U.S. (1914)

What does "among the states" mean

Supreme court did not have a consistent approach between 1890 and 1937. In
some cases, the Court allowed congress the ability to regulate interstate
transactions because of their impact in interstate commerce. In other cases, they
restricted the power.
In reading these cases, look at the different definitions of among the states.

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Facts: The suits were brought by the railroads against the Interstate Commerce
Commission. to set aside an order on the Grounds that it exceeded its authority.
The complaint was that the appellants maintained unreasonable rates. and that the
prices discriminated in favor of Texas intrastate. ICC wanted them to raise the
intrastate rates. RR said you can't do that because it is not interstate.
Issue: May Congress regulate intrastate commerce where it is found to affect
interstate commerce.
Holding yes, where no federal regulation exists.
Reasoning
The ICC found that the class rates were unreasonable. Where Congress has the
power to regulate trade, it dominates. This has been a tenet of the court. And this
was done because of the problems that happened in the articles of confederation.
The purpose was to make uniformity of regulation. And to do this, there must be
freedom of interstate commerce form local control.
Congress is empowered to regulate, to enact all measures necessary and
appropriate and to promote growth and safety etc. Its authority extends to all
operations that have a substantial relation to interstate traffic. that the control is
essential to the security of that traffic, or to the efficiency of the service.
Wherever there is interstate commerce, it is the Congress, not the states, that
have the final say. Otherwise, Congress would be denied its constitutional
authority
So where does Congress get the power to regulate intrastate? Court has a test. If
intrastate harms interstate, then you can have jurisdiction. But they don't really
say that any measures that are truly interstate can be breached. So they say,
When the intrastate activity has a "close and Substantial relationship" with the
interstate activity, then congress can regulate it.
Fundamental theory is inconsistent with Carter v. Cater Coal and EC Knight
dealt with a dual federalist theory. The theory said that if states could regulate
it, then the federal government could not. They were mutually exclusive.
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Commerce Power
Houston Ry. v U.S. (1914)
Ruling Affirmed
 9
Commerce Power
Schechter Poultry v U.S. (1935)

There were a branch of cases that came like stafford v Wallace, where the court
sustained the regulation of intrastate activities in the stockyard of illinois because
the stockyards were just a throat through which the stream of commerce passed
and the cattle was just waiting for shipping.
Facts: Petitioner were convicted for violation of the Live Poultry Code. They are
slaughter house operators. NY has large market, Although almost all poultry is sent
from other states Petition relates to wages, and hours and sales to retail dealer and

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butchers in brooklyn. It is no surprise that in NY, poultry comes from out of state.
Government had to use regulations
Petitioner said that (1) the Code adoption was beyond legislative power. (2) That
it attempted to regulate intrastate transactions outside of its power, (3) it was
repugnant to the due process clause.
Issue Did the defendants transactions directly affect interstate commerce so as to
be subject to federal regulation
Holding - One goods have traveled interstate to their state, they are no longer part
of interstate commerce or under federal jurisdiction
Reasoning - Like Carter v Carter Coal but the other end of the stream of commerce.
The court concludes in part that he stream of commerce approach did not apply
here.
The Statute is unconstitutional because there is an unlawful delegation. There is
a rule that Constitutional power can only be delegated if there are clear
guidelines. Here, the preparation of codes for each industry, including chickens,
was delegated to the industries themselves and then that unconstitutional
delegation doctrine required that it was unconstitutional and was struck down.
The second reason is the Commerce clause - Even though all the chickens came
from out of state, it was not considered part of the stream of commerce. The
stream of commerce had stopped. Since New York was the final destination.
Then
Necessary and well established distinction between direct and indirect effects on
interstate commerce. bright line is case by case. general distinction is If it is
purely indirect, then he state maintain the power. (which in essence is him making
it up) A substitute for "close and Substantial Relationship -
The distinction must recognized as fundamental or Congress would have too
much power.
Ruling
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Commerce Power
Champion v. Ames (Lottery Case 1903)

Facts: Statute says No Lottery tickets can be transported state to state. Champion
purposely carried a box of tickets across state lines. Appellant argues that
Congress has the power to regulate, not to prohibit commerce. Prohibiting is a state
function.
Issue May Congress use the commerce clause to prohibit shipments to protect
commerce of all states.
Holding Yes

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Reasoning
The Court says that Congress has the power to regulate and that includes the
power to prohibit. The Congress has acquired Police power over time and
through these cases. Congress can exclude any item from being transported
across state lines. But this is too big and must be done on a case by case basis
and this rule does nothing more than say lottery tickets cannot be transported.
Ruling - Affirmed
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Commerce Power
Hammer v Dagenhart (The Child Labor Case 1918)

One of the dumbest decision ever by the SC

Facts: Father on behalf of his sons tried to stop a law that prohibited interstate
commerce of products made by underaged workers - A child labor law.
Issue: Is Congress allowed to regulate Commerce this way
Holding - Congress does not have the authority to regulate child labor, a purely state

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function by preventing interstate commerce of their products
Reasoning
The statute denies the privilege of the goods in interstate commerce if they were
produced in a mill where a child under age 8 was employed. And one would think
that after the lottery case, that this was a slam dunk, that there was no way it
would not be sustained. But the court say that it is unconstitutional. That it is
offends a process that is purely local in character.
How does the court not be consistent with the other decisions such as the Mann
act, or the lottery case? A state can't protect itself against the unfair competition
of goods produced in another State that are subsidized by Child labor? They
can't impose a tariff which is totally against the constitution, nor can they make it
criminal to use a piece of furniture. Regardless of how it is made. But you could
say that you cannot sell lottery tickets or your own body, under the police power.
And that is why this is all backwards. Because the states could protect
themselves from the lottery type of commerce. Here, the federal government
really was exercising a power that congress was supposed to have. Because the
states cannot protect themselves from unfair labor practices.
One would think this was just a deny of interstate and Congress was allowed to
do this. But it is not. At this time, Congress is seeking to regulate the production
of goods and since the States can regulate it, then COngress can't. This is Dual
Federalism. Also, the evil occurs after the transportation as opposed to here it is
before the transportation.
This was overturned in US v. Darby
 12-1
Commerce Power
NLRB v. Jones & Laughlin Steel Corp. (1937)

Facts: Jones is a huge corporation with 75% of its steel sent outside its home state
of PA. Steel Corp violated Labor Act by using unfair labor practices. affecting
commerce. They were discriminating through hiring and tenure practices, and
coercing and interfering with the Union. NLRB ordered a cease and desist, The corp
failed to comply and an action was brought.
Issue Is the NLRB an invasion of states power in attempting to regulate all industry.
Holding Congressional power to protect interstate commerce is not limited to

NoteTaker Trial
transact;ions which are "part of the flow" but may be used to regulate those acts
which have a substantial relation to interstate commerce which will protect
commerce from burden and constructions.
Reasoning
The NLRB can be construed as to act within the sphere of constitutional authority.
The point of the Act is interstate commerce.
The act defines the term "affecting commerce". which means labor disputes
burdening commerce. The definition is one of inclusion and exclusion. It purports
to reach only that which affects commerce and is thus within its sphere. Acts that
have effect are not immune because they come out of labor disputes, it is the
effect upon commerce, not the source if injury which is the criterion.
Defendants argue that manufacturing is not commerce, but protection of
commerce is not limited only to commerce.
Congress’ authority to deal with such burdens is plenary, and reaches to the
source of the burden wherever it may lie. Thus, although the activities may be
intrastate in character when separately considered, if they have such a close and
substantial relationship to interstate commerce that their control is essential or
appropriate to protect that commerce, Congress cannot be denied the power to
exercise that control.
While it seems this cite would come from Shreveport Rate case, but instead he
cited Carter v Carter Coal. Shreveport is the better cite because that is what
he said in that case, being the author. But he chose Carter to try and indicate
that the court was not making the switch but being consistent.
Analysis:

Labor strife in the steel industry has a gigantic ripple effect on interstate
commerce because of the important place steel occupies in the modern
world. Automobiles, residences, buildings, and even the very computer
being used to write these words include steel. This, however, is just a
consideration of the finished product, to say nothing of all the individual
workers involved in making the steel, as well as those involved in producing
 12-2
Commerce Power
NLRB v. Jones & Laughlin Steel Corp. (1937)
workers involved in making the steel, as well as those involved in producing
the products that use steel. A disruption at the source, that is, at the point
where steel is produced, or at any prior point in the chain of production, can
therefore have a devastating effect upon interstate commerce. Because this
is a national problem, it demands a national solution. In N.L.R.B. v.
Friedman-Harry Marks Clothing Co., the Court upheld the application of the
NLRA to even a relatively small clothing manufacturer that shipped clothing
in interstate commerce. The Court noted that a strike in the New York
clothing industry would have a severe effect on interstate commerce. This
shows that an economic effect on interstate commerce, even if slight, gives
Congress authority under the Commerce clause to regulate the activity.
 13-1
Commerce Power
US v. Darby (1941)

Facts: Darby, A Georgia lumber producer, challenged an indictment against him for
violation of the Fair Labor Standards Act. A Georgia lumber company violated
federal minimum wage/maximum hour laws. Its defense is that the federal
government overreached its Commerce Clause authority in setting the standards.
Issue
1. Can Congress prohibit the interstate shipment of lumber manufactured by
employees whose wages do not meet the minimum standard?

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2. Does it have the power to prohibit employment of workmen engaged in
production of interstate commercial goods at other than prescribed wages
and hours?

Holding Congress has the authority, under the Commerce Clause, to exclude any
article from interstate commerce, in judgment that they are injurious to the public
health, morals or welfare.
Reasoning
Congress powers to regulate commerce extends to regulations that prohibit
commerce. Citing Gibbons v Ogden. COngress is free to exclude form interstate
commerce articles which may be injurious to public health , even though the state
has not sought to regulate its use. SUch regulation is not forbidden just because
the product ultimately is used within a state.
Hammer v Dagenhart (Prohibition interstate commerce is limited to articles which
in themselves are harmful) has long been abandoned. It is now and forever
overruled
Here, not of the relationship between state and federal governments, Congress
can use any form necessary to the attainment of the permitted end, being
enforcing labor law. The Tenth Amendment does not affect this decision. It is
nothing more than a declaratory statesmen of the relationship between state and
federal governments and nothing more than a statement to ally fears of a new
national government exercising powers not granted.
Analysis:

Remember the Court’s ruling in Hammer v. Dagenhart, that Congress did not
have the power, under the Commerce Clause, to prohibit child labor through
a general ban on the shipment of its fruits. Was Hammer truly a ruling
without support in prior and subsequent case law? In the Lottery Case the
Court ruled that only those articles adjudged to be deleterious in and of
themselves could be banned from interstate commerce. In Schechter Poultry
(the Sick Chicken Case), the Court ruled that the commerce power did not
extend past the initial sale once an article entered a state. In E.C. Knight the
 13-2
Commerce Power
US v. Darby (1941)
extend past the initial sale once an article entered a state. In E.C. Knight the
Court ruled that Congress could not regulate manufacturing because it is a
local concern. The holding in Carter v. Carter Coal is directly on point for
Darby. The Court held therein that Congress could not set wages and
working conditions for miners, yet, after Darby, it has power to do so.
Justice Stone’s assertion thus seems somewhat disingenuous. The
difference is in the Court’s newfound ability to swallow the government’s
“race to the bottom” rationale. The result is that corporations have a harder
time exploiting competition in attracting industry—which means jobs and a
broader tax base—between states.
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Commerce Power
Wickard v. Filburn (1942)

THE SUPREME COURT SETS A NEW OUTER BOUNDARY OF THE

FEDERAL COMMERCE POWER
Facts: Wickard (P) exceeded his allotted quota for wheat production, the excess
amount to be used for his own consumption. He was fined by the government and
seeks to have the quota ruled unconstitutional.
Issue: Does the Commerce clause include the regulation of those items not

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intended for distribution nationally
Holding Congress may regulate all activities having a substantial effect on interstate
commerce, even those that do not have a substantial effect individually but do when
viewed in the aggregate.
Reasoning
Darby gave Congress power to regulate production of goods for commerce but
the appellee here urges that since he is not selling but consuming the product, ti
is beyond the reach of the legislature.
Questions of power are not to be decided by reference to a formula or
nomenclature such as production, but rather, whether it has an effect on the
stream of commerce.
They appellees own contribution of wheat may be negligible consumption but not
enough to remove him from the scope of federal regulation where combined with
other consumers is hardly trivial. Unlimited production for consumption keeps the
person out of the buying market and therefore effects commerce and would
obstruct the purpose for which the Act was initiated.
Analysis:

It is clear after Wickard, if it wasn’t clear after Darby, that the Tenth
Amendment is ineffective as a check on the federal commerce power.
Wickard also set a new, broader standard for the exercise of the commerce
power. How difficult is it to come up with an intrastate activity that doesn’t,
in some way, substantially affect interstate commerce when viewed in the
national aggregate? As demonstrated in the 1960s civil rights cases,
Congress has taken advantage of this vast broadening of its commerce
authority. After Wickard, the only significant checks on the commerce power
were specific guarantees, such as those in the Bill of Rights.
 15
Commerce Power
Heart of Atlanta Motel v US

RACIAL DISCRIMINATION IN PUBLIC ACCOMMODATIONS EXERTS A

SUBSTANTIAL AND HARMFUL EFFECT UPON INTERSTATE COMMERCE
Facts: An Atlanta, Georgia motel wishes to continue its racially discriminatory
operations in spite of the 1964 Civil Rights Act (Act) barring racial discrimination in
public accommodations
Issue : May Congress regulate local activities that can exert substantial influence on
interstate commerce.

NoteTaker Trial
Holding Yes
Reasoning
Discrimination is rampant throughout the country and impairs negroes ability to
travel, not knowing if they will find accommodations.
It is the same interest in protecting interstate commerce that lead to . . . (the Cite
most of the previously discussed cases)
It is said that the operation of the motel here is of purely local character. Even if
this were true, if it is interstate commerce that feels the pinch, it does not matter
how local the operation which applies the squeeze. Thus, Congress may regulate
the local incidents of interstate commerce, including within the states of origin
and destination, which might have a substantial and harmful effect upon that
commerce.

The Court’s opinion in Heart of Atlanta is well reasoned, at least partially due
to the testimony Congress took when considering the Civil Rights Act of
1964. Congress knew the bar it had to meet in order to make the legislation
constitutional, just as it surely knew the speed with which the Act would be
challenged. The Act’s constitutionality here flows from the fact that an
inability to rely on finding accommodations while traveling from state to state
is a substantial obstruction to the undertaking of such travel. When a
significant percentage of the population is much less likely to travel
interstate, even the purely economic ramifications are easy to recognize.
People who travel spend money in local economies, without acting as a
drain on public resources. A traveler is, therefore, someone who pays
without also taking. Interestingly, had civil rights not been on just-
assassinated president John F. Kennedy’s legislative agenda, the Act may
not have passed at all, but his successor, Lyndon Johnson, made a strong
moral case for passing the agenda as a way of honoring JFK’s memory.