The Supreme Court may be called on to determine the scope of federal authority to regulate interstate commerce, as well as to adjudicate commercial disputes between state governments or disputes that pit the laws of one state against the laws of another. All such decisions have profound effects on the particular businesses involved, as well as on the business climate in the nation.
One of the fundamental principles of American governance is
The Constitution grants Congress the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.” Of the three, the power to regulate commerce “among the several states,” that is, the interstate commerce power, is the most problematic. The
Before the adoption of the Constitution in 1789, the newly independent United States was governed under the Articles of Confederation. Congress had no power over commerce. States created barriers, such as tariffs, to interstate trade, leading to economic chaos threatening the nation’s survival. In 1786, the Constitutional Convention was called to revise the articles, but instead drafted an entirely new constitution, granting to Congress greatly expanded powers, including the power to regulate interstate commerce.
The next century saw little federal legislation regarding commerce. In those cases questioning the scope of federal power that came before the Supreme Court, the Court deferred to Congress’s authority. The reach of both federal and state power over commerce was considered by the Court in
The Supreme Court’s first effort to place limitations on the exercise of the federal commerce power came in
In the last decades of the nineteenth century, Congress became interested in regulating the economic and social order, and the Supreme Court became interested in preventing it from doing so. The Court believed the Tenth Amendment barred Congress from regulating purely intrastate commerce and from impinging on the states’ police powers.
The Court adopted, temporarily, a narrow definition of commerce. It held in Leisy v. Hardin (1890) that the importation of intoxicating beverages is “commerce” and cannot be banned by a state. In Kidd v. Pearson (1888), though, the Court determined that the manufacturing of such beverages was not commerce and could be prohibited within a state. In a case involving the reach of the federal commerce power,
As the twentieth century dawned, the Supreme Court was willing to uphold some of Congress’s tinkering with the social order, including prohibiting the interstate transportation of women for immoral purposes, of lottery tickets, and of unsafe food and drugs. In 1905, however, the Court embarked on three decades of rejectionism of both federal and state forays into social and economic engineering. In
The Court continued to strike down state and federal laws that interfered with free markets. In some of these cases the law was held to be an improper extension of the commerce power, and in some a violation of the due process clauses of the Fifth and Fourteenth Amendments. In
In 1932, Franklin D. Roosevelt was elected president on a promise of acting immediately to repair the battered economy.
In 1937, weary of the Court’s obstructionism, Roosevelt asked Congress for authority to appoint an additional six Supreme Court justices, positions undoubtedly to be filled by justices more amenable to New Deal legislation. Though not enacted, the threat to pack the Court may have had the desired effect, as the Court suddenly changed course. In
This marked the end of the Lochner era. The Court did not thereafter overturn economic legislation on the basis of the due process clause. Roosevelt appointed seven justices in the next four years who were inclined to defer to Congress’s exercise of the commerce power. The extent of that deference was made clear in
The aggregate theory espoused in Wickard was a significant expansion of the reach of the federal commerce power. This theory underpinned the Court’s upholding of the Civil Rights Act of 1964 in two landmark cases,
The question remained as to how far this extension of the commerce power went. Had it morphed into a federal police power over health, safety, welfare, and morals? For the first fifty years after Wickard, no limit to the commerce power was identified. Then, in
As a result of the Court’s decisions, it established the principle that Congress can regulate the channels and instrumentalities of interstate commerce. It may regulate persons or things moving in interstate commerce, activities that substantially affect interstate commerce, and–if they are commercial in nature–activities that in the aggregate substantially affect interstate commerce.
Martin Luther King, Jr. (right, wearing hat) and Ralph Albernathy (also wearing hat) try to check into the Hotel Albert in Selma, Alabama, in 1965. The Supreme Court used the commerce clause to rule against segregation.
The power of the states to regulate commerce is limited in two ways. A state cannot discriminate against out-of-state commerce, unless it has a legitimate health or safety reason. A state cannot place a burden on interstate commerce unless justified by a countervailing benefit. The Court held in
Amar, Akhil Reed. America’s Constitution: A Biography. New York: Random House, 2005. Studies the Constitution one provision at a time. Amar incorporates the historical events and political issues that shaped each provision, as well as the Supreme Court’s interpretations in landmark cases. Hall, Kermit L., et al., eds. The Oxford Companion to the Supreme Court of the United States. New York: Oxford University Press, 1992. Alphabetically arranged compendium of more than one thousand entries covering the history of the Supreme Court, biographies of the justices, and four hundred of the Court’s most important decisions. Recommended for high school reference collections. Hoffer, Peter Charles, William Hoffer, James Hull, and N. E. H. Hull. The Supreme Court: An Essential History. Lawrence: University Press of Kansas, 2007. This survey of the history of the Supreme Court, with a chapter devoted to each chief justice’s tenure, considers the role of the Court as the arbiter of the Constitution, focusing on the personalities and perspectives of the justices themselves. Lively, Donald E. Landmark Supreme Court Cases: A Reference Guide. Westport, Conn.: Greenwood Press, 1999. Compendium of the entries on seventy-four of the Supreme Court’s most important cases, arranged thematically, with a detailed discussion of each case, targeted at a high school level audience. May, Christopher N., and Allan Ides. Constitutional Law–National Power and Federalism: Examples and Explanations. 3d ed. New York: Aspen, 2004. An overview of federalism that provides analysis of the federal interstate commerce power and the limitations of state authority to regulate commerce. Schwartz, Bernard. A History of the Supreme Court. New York: Oxford University Press, 1995. A chronological history including major chapters on the most significant cases, such as Lochner v. New York, as well as biographical sketches of important justices.
U.S. Department of Commerce
Supreme Court and banking law
Supreme Court and contract law
Supreme Court and labor law
Supreme Court and land law