The U.S. Supreme Court, through its broad interpretation of the commerce clause in the case of Champion v. Ames, sustained federal powers to prohibit and regulate commerce.
In 1903, the U.S. Supreme Court upheld the federal government’s potential to prohibit or restrict commerce. The case of Champion v. Ames, also known as the Lottery Case, altered the delineation between interstate and intrastate commerce under Article I, section 8, clause 3, of the U.S. Constitution, the so-called commerce clause.
The circumstances brought before the Court originated in 1895 with an act of Congress. This act made it illegal to transport or conspire to transport lottery tickets from state to state. On February 1, 1899, C. F. Champion sent two Pan-American Lottery Company lottery tickets from Dallas, Texas, to Fresno, California. The tickets were transported by a vehicle owned by the Wells-Fargo Express Company. Champion was arrested in Chicago under a warrant based on his alleged violation of the act and was subsequently convicted.
The case was appealed to the U.S. Supreme Court for final review, and on February 23, 1903, the Court upheld the conviction in a five-to-four decision. Justice John Marshall Harlan delivered the majority opinion of the Court, and Chief Justice Melville W. Fuller wrote the dissenting opinion.
When the Lottery Case appeared before the Court, the power to regulate interstate commerce was a concurrent power shared by the states and the federal government. Prior to the Lottery Case, several Court decisions had begun the process of liberalizing the connotation of “interstate,” favoring federal control. One such case was Gibbons v. Ogden (1824).
Gibbons’s steamboat was not licensed to operate under the New York monopoly. The pressure of additional competition encouraged Ogden to bring action in a New York court to prohibit Gibbons from operating. Writing for the majority in Gibbons, Chief Justice John Marshall delivered the opinion of the Supreme Court, which held the New York monopoly law to be unconstitutional. In Gibbons, the Court aspired to denote interstate commerce. Gibbons’s attorneys argued that interstate commerce is traffic to buy and sell, or the interchange of commodities. The Court agreed that interstate commerce includes traffic but added the notion of intercourse.
Generally, the term “intercourse” connotes exchange between persons or groups. With this notion, the Court reasoned that interstate commerce does not end at external boundary lines between states but may be introduced into the interior. The justices determined that commerce may pass the jurisdictional line of New York and act upon the waters to which the monopoly law applied, thus concluding that the transportation of passengers between New York and New Jersey constituted interstate commerce.
In the Champion v. Ames decision, the Court went on to reference other decisions that sanction federal authority. These cases continued to expand the essence of interstate commerce. Consequently, the Court resolved that commerce embraces navigation, intercourse, communication, traffic, the transit of persons, and the transmission of messages by telegraph.
In the Lottery Case, the use of a vehicle from Wells-Fargo Express traveling from state to state was relevant. The Court held that this travel provided sufficient intercourse with interstate commerce to allow federal domination. Further, the Court viewed the congressional justification for the creation of the act as being rational. It determined that the federal government is the proper means for protecting U.S. citizens from the widespread pestilence of lotteries. The Court deemed that such an evil act of appalling character, carried through interstate commerce, deserves federal intervention.
In his dissenting opinion, Chief Justice Fuller asserted that the Court had imposed a burden on the state’s powers to regulate for the public health, good order, and prosperity of its citizens. To hold that Congress has general police power would be to defeat the operation of the Tenth Amendment. This argument would constitute the foundation of many later dissenting opinions. This particular conviction never became the majority view.
At the time of the Lottery Case, an escalating struggle was taking place between a desire for a strong federal government, called federalism or nationalism, and the states’ right to regulate themselves. This conflict goes as far back in U.S. history as the Constitution itself. After the Revolutionary War, the states regarded themselves as independent sovereigns. The Articles of Confederation allowed only minimal intrusion into states’ internal affairs by the Continental Congress.
Faced with the inability of the confederation to function properly, provincial patriotism had to concede. The delegates at the Constitutional Convention, in an effort to fabricate a more concentrated federal government, made many compromises. They maintained within the Constitution, however, certain seemingly insurmountable limits on the federal government. As a consequence, the judiciary generally discerns the Constitution as being a limitation on federal power. Without an expressed or implied grant of authority from within the Constitution, the federal government cannot regulate.
This policy is not easily implemented in cases concerning commerce. Under the commerce clause, Congress has the authority to regulate commerce with foreign nations and among the several states and with Native Americans. The commerce clause seems to conflict with the Tenth Amendment,
To add another complication, consider the Constitution’s supremacy clause, Article VI, paragraph 2. This states that if legitimate state and federal powers are in conflict, then the national interest will prevail. This power is enhanced by the Court’s broad interpretation of the “necessary and proper clause” (Article I, section 8) in McCulloch v. Maryland (1819).
From a political perspective, it is notable that both the McCulloch and Gibbons cases came before the Court while John Marshall was chief justice. Marshall served under President John Adams as the secretary of state and was a devout federalist. During Marshall’s tenure as chief justice, the Court vested within its jurisdiction an unusual allotment of power. It assigned to itself final interpretation rights over the constitutionality of all federal and state laws brought before the Court.
The ruling in the Lottery Case had an immediate influence on U.S. society. Social reformers quickly seized on the rationale provided by the Court and began prompting Congress to regulate. In 1906, Senator Albert J. Beveridge of Indiana successfully proposed a meat inspection amendment to an appropriations bill. The amendment, which prohibited the interstate shipment of meats that had not been federally inspected, received an influential recommendation from President Theodore Roosevelt. Additionally, Upton Sinclair’s novel The Jungle (1906) greatly intensified popular support for Beveridge’s cause.
Later, Beveridge proposed another bill based on the commerce clause. This legislation attempted to exclude from commerce goods produced by child labor. Beveridge was certain that the Lottery Case settled the constitutionality of his proposal, but convincing his colleagues of this proved to be arduous and unsuccessful. Congress finally passed the Child Labor Act
Despite this setback, the precedent established in the Lottery Case was adequate to sustain a wide variety of laws intended to limit the movement of harmful goods. During the early twentieth century, the Court upheld the exclusion from interstate commerce of impure foods, white slavery (involuntary prostitution), obscene literature, and articles designed for indecent and immoral use.
With only some antithesis, the Court continued to reform the meaning of interstate commerce to enhance federal control. A greatly extended application of the clause can be found in Heart of Atlanta Motel v. United States (1964).
The Court upheld the constitutionality of the act. The tests employed by the Court were whether the activity is commerce that concerns more than one state and whether the act showed a substantial relation to a national interest. The Court postulated that the operation of a motel might appear local in nature, but it does affect interstate commerce. The Court resolved that a motel accommodating interstate travelers is engaged in commerce that concerns more than one state.
Again, as in the Lottery Case, the Court determined that the evil averted by the act was a legitimate national concern. The rationale offered by the Court in Heart of Atlanta Motel exhibits the accumulation of many years of precedents. The Court asserted that the same interest that led Congress to deal with segregation prompted it to control gambling, criminal enterprises, deceptive practices in the sale of products, fraudulent security transactions, improper branding of drugs, wages and hours, members of labor unions, crop control, discrimination against shippers, the protection of small business from injurious price cutting, and resale price maintenance at terminal restaurants. The Court affirmed that Congress, in many of these examples, was regulating against moral wrongs. It concluded that segregation is a valid moral issue that would support the enactment of the Civil Rights Act.
The Court has applied various constitutional tests to interstate commerce throughout its history. Initially, the Court viewed interstate commerce as physical movement between states. Soon it began examining federal jurisdiction based on the direct versus indirect influences of the law in question on interstate commerce. By the middle of the twentieth century, the Court began examining whether the purely local activity had an appreciable effect on interstate commerce.
Another offspring of the commerce clause is the Interstate Commerce Commission
The need to unite the country necessitated a strong centralized government, but debates persist over the effects ensuing from the expanding role of the federal bureaucracy. Some critics perceive the federal government as an inadequate regulator of business, particularly in the area of environmental protection. Other commentators reason that businesses have become dependent on the government as a form of protection from competition. Still others assert that business enterprises cannot mature and flourish because of excessive government control.
The judiciary appears to recognize one conspicuous restriction on the federal government’s authority. Regardless of how significant the legal arguments are, most courts hesitate to make decrees that will prohibit major industries from operating. In addition, certain potentially negative economic effects, such as the loss of many jobs, particularly in the automotive, steel, and oil industries, act as subtle legal shields from overly zealous government intrusion.
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