Article I, Section 8, Clause 3 of the United States Constitution empowers the United States Congress "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes".
The Commerce Clause has been the subject of intense constitutional and political disagreement centering on the extent to which Federal legislation may govern economic activity connected to interstate commerce but occurring within a state. Some have argued that the clause should be interpreted broadly to include a wide range of activities as related to commerce and the Supreme Court has often agreed with this interpretation.
In Gibbons v. Ogden (1824), Justice Marshall ruled that the power to regulate interstate commerce also included power to regulate interstate navigation: "Commerce, undoubtedly is traffic, but it is something more—it is intercourse ... [A] power to regulate navigation is as expressly granted, as if that term had been added to the word 'commerce' ... [T]he power of Congress does not stop at the jurisdictional lines of the several states. It would be a very useless power if it could not pass those lines."
In Swift v. United States (1905), the Court ruled that the clause covered meatpackers; although their activity was geographically "local", they had an important effect on the "current of commerce" and thus could be regulated under the commerce curve. Stafford v. Wallce (1922) upheld a federal law regulating the Chicago meatpacking industry, because the industry was part of in the interstate commerce of beef from ranchers to dinner tables.
The clause was the subject of conflict between the U.S. Supreme Court and the Administration of Franklin D. Roosevelt in 1935-37 when the Court struck down several of the President's "New Deal" measures on the grounds that they encroached upon intrastate matters. After winning the 1936 election by a landslide he proposed a plan to appoint an additional justice for each unretired Justice over 70. Given the age of the current justices this permitted a court of up to 15. Roosevelt claimed that this was not to change the rulings of the court, but to lessen the load on the older Justices, who he claimed were slowing the Court down.
There was widespread opposition to this plan, but in the end the New Deal did not need it to succeed. In what became known as "the switch in time that saved nine", Justice Roberts and Chief Justice Hughes switched sides in 1937 and upheld the National Labor Relations Act, which gave the National Labor Relations Board extensive power over unions across the country. In 1941 the Court upheld the Fair Labor Standards Act which regulated the production of goods shipped across state lines. In Wickard v. Filburn (1942) the Court upheld the Agricultural Adjustment Act as applied to wheat grown for homemade consumption.
The wide interpretation of the scope of the commerce clase continued following the passing of the Civil Rights Act, which aimed to prevent business from discriminating against black customers. In Heart of Atlanta Motel v. United States (1964), the Court ruled that Congress could regulate a business that served mostly interstate travelers; in Katzenbach v. McClung (1964) the Court ruled that the government could regulate Ollie's Barbecue, which served mostly local clientele but sold food that had previously moved across state lines; and in Daniel v. Paul (1969), the Court ruled that the government could regulate an entire 232 acre (0.9 km²) recreational facility because three out of the four items sold at its snack bar were purchased from outside the state.
In 1995, the limits of the power of the Federal government under the commerce clause was once again tested in United States v. Lopez (later clarified by United States v. Morrison). There Justice Rehnquist, delivering the opinion of the Court, ruled that Congress only had the power to regulate:
- the channels of commerce,
- the instrumentalities of commerce, and
- action that substantially affects interstate commerce
Thus the government did not have the power to regulate relatively unrelated things such as the possession of firearms near schools which had been banned by the law at issue. It was the first time since the New Deal fight in 1936 that the Court had overturned a putative regulation on interstate commerce because it exceeded Congress's commerce power.
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