Con Law – Sawyer
Spring 2017
SOURCES AND SCOPE OF CONGRESSIONAL POWER
McCulloch v. Maryland (1819): Federal trumps state law
In 1816, Congress passed an act that incorporated the Bank of the United States. In 1817, the Bank opened up a branch in the state of Maryland (plaintiff). In 1818, the Maryland state legislature passed an act to impose a tax on all out-of-state banks operating in the state of Maryland. Although the act was general in nature, the Bank of the United States was the only such bank in Maryland at that time and was thus the only establishment affected by the tax. James McCulloch (defendant), head of the Maryland branch of the Bank of the United States (Bank), refused to pay the tax.
QP: (1) Does Congress have implied constitutional power to create a bank. (2) If so, may individual states tax a federally-created bank?
(1) Yes. Congress has the constitutional power to charter the Bank of the United States. This power is ultimately derived from the Constitution’s grant to Congress of the general power to “tax and spend” for the general welfare. However, in addition to its enumerated powers, Congress is also given general powers under the Constitution’s Necessary and Proper Clause, which states that Congress may create laws it deems necessary and proper to help carry out its enumerated powers.
(2) No. The Bank was created by federal statute. Maryland may not tax the Bank as a federal institution because federal laws are supreme to state laws. A federally-created institution may not be inhibited by a state law.
THE COMMERCE CLAUSE
Article I: Describes the design of the legislative branch of US Government — the Congress. Important ideas include the separation of powers between branches of government (checks and balances), the election of Senators and Representatives, the process by which laws are made, and the powers that Congress has.
First Stage of Commerce Clause Jurisprudence: Court pretty hands on, congress has far reach in commerce clause powers
McCulloch v. Maryland (1819)
commerce defined broadly, court pretty hands on
Gibbons v. Ogden (1824)
NY state legislature gives Ogden a monopoly – exclusive right to operate his boat in NY waters (believes he has the exclusive right to the ferry business), Congress gives Gibbons a nonexclusive right to also run a ferry across the Hudson river (he thinks he has the exclusive right to run a ferry) – raising the commerce clause so that he can show that his federal right trumps Ogden’s state appointed right
Congress is granted the power to regulate interstate commerce in Article I, Section 8 of the Constitution
commerce is more than just traffic, it is intercourse, commercial intercourse between nations, regulated by prescribing rules for carrying out that intercourse
2 take away arguments:
Congress needs to be able to keep states from fighting over conflicting regulations
States should be able to regulate whats going on within their own states
Marshall writes a very broad opinion, but he includes within it a carve out that says there are some things that Congress can’t reach – things that are purely intrastate – the problem is that at this time intrastate commerce is still a pretty big thing – the breadth of Marshall’s definition of commerce could coexist with state regulation of economic activity – as time went on this became less and less possible – markets became interconnected across borders – hard to have anything that is truly subject to in state regulation
Interstate Commerce Act/Sherman anti-trust act -court holding during this time that interstate and intrastate aspects of commerce were so mingled together that full regulation of interstate commerce required incidental regulation of intrastate commerce, CC authorized such regulation
Second Stage of Commerce Clause Jurisprudence: Lochner Era; Direct/Indirect Test
The Court throughout this time period used its power to invalidate numerous laws seeking to regulate business and the economy
Congress has power to regulate not the power to prohibit
Laws setting min wages, max working hours, and imposing other worker safety requirements frequently were invalidated
Court was very restrictively interpreting congressional power and state power – era of judicial overreach
10th amdt: Powers reserved to states or people
The powers not delegated to the united states by the constitution, nor prohibited by it to the States, are reserved to the states respectively, or to the people
Hammer v. Dagenhart (1918): if it directly effects then it can be regulated, anything affecting IC indirectly cannot be regulated by Congress
Challenging the constitutionality of the Keating-Owen Child Labor Act
QP: Is it within the authority of Congress in regulating commerce among the states to prohibit the transportation in interstate commerce of manufactured goods… that violate child labor laws?
No: Once the goods have entered the stream of commerce, all issues relating to their production are moot.
The act in its effect does not regulate transportation among the states, but aims to standardize the ages at which the children may be employed
the mere fact that they were intended for interstate commerce transportation does not make their production subject to federal control under the commerce power
Congress’s motive matters, here the purpose is to get at purely local conditions – it’s an unconstitutional purpose/reason
TEST: Direct vs. Indirect Affects
The court argues that there is an important distinction between things that directly affect and indirectly affect interstate commerce – if it directly affects then it can be regulated
A.L.A. Schechter Poultry Corp. v. United States (1935): jurisdictional hook can’t be used to regulate – once the transaction ends congress does not have the power to regulate
Challenging the constitutionality of section 3 of the national industrial recovery act – regulates hours for workdays and a minimum wage
Notion of a jurisdictional hook – if an item has traveled in interstate commerce that’s enough for congress to regulate
Congress’s argument: these chickens came through interstate commerce – b/c they came through interstate commerce jurisdiction attached to the chickens in essence, and jurisdiction stays with it
Butcher’s argument: maybe if they were selling to other states then congressional regulation could attach – but what happens here is that the commercial transaction ends – when the transaction ends and its not a continuing transaction in commerce then it cant be regulated
Court rejects hook: once out of flow, cant justify regulation – maybe if the chicken was leaving the state again then congress could hook jurisdiction to it – it stops in NY and doesn’t go any further – cant reg. at that point
aggregate effect of local sales on interstate commerce – doesn’t matter – have to look at the transaction on its own terms, not all similar transactions
The Court characterized the distinctions b/t direct and indirect effects of intrastate transactions upon interstate commerce as a fundamental one – activities that affect interstate commerce directly are within congress’s power; affect interstate commerce indirectly are not – otherwise there would be no limit on the federal govt
Policy: applicable to both Carter Coal and Schechter: if the govt were responsible for regulating every indirect act that affected interstate commerce it would end up regulating virtually everything – the states would no longer have power over themselves
Carter v. Carter Coal Co (1936). : Regulating local activities is unconstitutional, no matter how it affects the aggregate
Challenging the constitutionality of the Bituminous Coal Conservation Act (BCCA) which helped regulate the coal mining industry by establishing standards for fair competition, production, wages, hours, and labor relations
QP: Here there is no doubt that what’s going on in the individual state is definitely affecting the interstate market – is that enough to hook congressional regulatory authority? Court says no
Court: even if the cumulative effect on the national market of what’s going on at each individual mine is enormous – it doesn’t matter – as long as its intrastate then congress can’t touch it – this the sharpest rejection of the effects part of John Marshall’s test – we look only at the transaction on an individual basis
Govt argues: that all production and distribution of the coal directly affects interstate commerce – the coal is produced and then sent off into the stream of interstate commerce – therefore regulation of the production of the coal is imperative for the protection of the commerce – therefore the labor provisions should be sustained
Third Stage of Commerce Clause Jurisprudence (1937-1980’s); Substantial Affects Test
the Court was almost completely saying that it’s not their job to enforce restrictions on congressional power – up to congress to decide if a law was good or not
NEW TEST HERE à here they started calling impact on other states direct activity
NLRB v. Jones & Laughlin Steel Corp (1937) : the effect on commerce can trigger regulation regardless of where we are in the flow of commerce, as long as it’s affecting commerce directly it counts – loosening of the direct/indirect test –> beginning of substantial Affects test
Challenging the constitutionality of the National Labor Relations Act (NLRA) which cre
isprudence: 1980’s; Defining Economic Activity
The Court taking baby steps into the regulation of commercial activity – court begins to test some doctrines
Increased effort on the part of the court to impose some restrictions on Congress while operating within the existing doctrinal paradigm
United States v. Lopez (1995): If the thing being regulated is not economic activity, you cannot aggregate your way to substantial activity –> there has to be some limit on Congress’s power
Challenging constitutionality of the Gun-Free School Zones Act (GFSZA), making it a federal offense for any individual knowingly to possess a firearm in a place that the individual knows, or has reasonable cause to believe, is a school zone
Govt argues:
Violent crime decreases IC
When the activity has a substantial effect on commerce then congress gets to regulate it
Darby: the doctrinal validity of a substantial effects test, as long as something substantially effects commerce, its doesn’t matter if the thing being regulated is intrastate or not
Inhibits to travel
Heart of Atl: CC power extends to the channels of commerce, the things that enable commerce are within the CC regulation – schools are like that because you need to educate people so that they will participate in congress
Possession irrelevant – doesn’t matter because there is an effect
Wickard: possession can be regulated, it doesn’t matter if there is no commercial transaction, what matters is that the aggregated affect, effects commerce. Doesn’t matter that the thing being regulated is not economic in nature
The court says this is too far
When you look at previous cases the court has authorized 3 categories where commerce clause power validly exercised:
1) Channels of IC (planes, trains, cars, etc.)
2) Instrumentalities – things that have traveled in IC – this is the idea of a jurisdictional hook (Schechter) – if what congress is regulating an object that has moved in IC, Congress can do that, hooking on jurisdiction to the commodities that have moved
Here regulating the possession of a gun not the gun itself
3) Substantial effect on IC –> the court distinguishes Wickard here
What they’re regulating here isn’t necessarily and economic activity, possession of a gun is not an economic activity – possession of a gun is a commodity
Wheat is a fungible commodity, growing your own wheat for your consumption is an economic activity
If the thing being regulated is not economic activity, you cannot aggregate your way to substantial activity
POLICY: Court concerned with the consequences of congress’s argument – if aggregate effect is enough to allow regulation, then there’s almost nothing that could not be regulated
United States v. Morrison (2000): Congress does not have the authority under the Commerce Clause to regulate violence against women because it is not an economic activity
Challenging the constitutionality of the Violence Against Women Act (VAWA), which contained a provision for a federal civil remedy for victims of gender-based violence
Using same reasoning as in Lopez – the “but for” this crime other affects to the interstate commerce would not have occurred reasoning – this would allow congress to have virtually unlimited regulatory power
Breyer Dissent:
Once the constitutional choice was made to give Congress the power to regulate IC this includes things that substantially effect the economy – not a judicial issue that the economy has grown and become more encompassing of everyday life
The only Q for the courts here is whether congress’s determination that the aggregate will substantially effect IC is reasonable/rationale – if yes then that’s where the court stops
