Constitutional Law I
Prof. Ringhand
Spring 2016
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 intend
l’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 created the National Labor Relations Board (NLRB) to enforce federal fair labor practice standards, including the right of employees to unionize
J&L Steel argues: that the act is in reality a regulation of labor relations and not of interstate commerce and that the act can have no application to the respondent’s relations with its production employees because they are not subject to regulation by the federal govt. – manufacturing itself is not commerce
The Court: disagrees with the steel company: the court does not develop an entirely new test – they operate within the language of Schechter – they say that the impact here is direct
When industries organize themselves on a national scale, making their relation to interstate commerce the dominant factor in their activities, how can it be maintained that their industrial labor relations constitute a forbidden field into which Congress may not enter when it is necessary to protect interstate commerce from industrial war?
