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    Contents

    1

    Commerce Power

    ......................................................................... 3The Three Main Questions

    ........................................................................................... 4The Three Eras

    ............................................................................ 5Gibbons v. Ogden (1824)

    ..................................................... 6United States v E.C. Knight Co. (1895)

    ........................................................................ 7Carter v. Carter Coal (1936)

    ......................................................................... 8Houston Ry. v U.S. (1914)

    ................................................................. 9Schechter Poultry v U.S. (1935)

    .................................................. 10Champion v. Ames (Lottery Case 1903)

    ................................. 11Hammer v Dagenhart (The Child Labor Case 1918)

    ......................................... 12NLRB v. Jones & Laughlin Steel Corp. (1937)

    ................................................................................... 13US v. Darby (1941)

    .......................................................................... 14Wickard v. Filburn (1942)

    ...................................................................... 15Heart of Atlanta Motel v US

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    Commerce PowerThe Three Main Questions

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    Article 1 8: the Congress shall have the power to regulate commerce with

    foreign nations and among the several states and with Indian tribes .

    1937 until the 1990s was a time when the court expansively define the scope of

    the Commerce Power and refuse to apply the 10th amendment as a limit. Since

    the 1990s records again narrowed the scope of the Commerce Power and revive

    the 10th amendment as an independent judiciary enforceable women on Federal

    action

    1. What is Commerce?

    Gibbons was the first case to consider the scope of the commerce clause. First

    the court considered what commerce meant. It is not just traffic, it is intercourse,

    between nations and part of nations in all its branches, and is regulated by the

    prescribing rules for carrying on that intercourse.

    According to Gibbons, Commerce includes all phases of business.

    2. What is Among the States?

    Is Congress limited to regulating commerce only when it is interstate? Is intrastate

    outside Congress power because it is not among the states?

    A thing which is among is intermingled and does not stop at the boundary lineof each state, but may be introduced into the interior. The court did not choose

    the more broad definition of "in the midst of" Had the court adopted that

    definition, all commerce in the US would be regulated.

    The completely internal commerce of a state then may be reserved for the state

    itself. The court made it clear that Congress could regulate intrastate commerce

    if if it had an impact on interstate activities

    The court had three definitions of amongto choose from.

    1. One would have been to make intrastate beyond the scope of congressional

    power2. To define amongas including more than one state.

    To define amongas in the midst of, in which all commerce could be regulated

    because it is all in the midst of.

    In Gibbons the court chose the middle definition. Unfortunately, this definition

    requires case-by-case determination and does not make a bright line like the

    others.

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    Commerce PowerThe Three Main Questions

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    3. Does State Sovereignty limit congressional power.In Gibbons, the court emphatically rejected any such constraint. The Power is

    vested an complete. As it should be in a single government. COngress has

    complete authority to regulate all commerce among the states. COngress can

    regulate in the same way as if no state governments existed.

    SInce Gibbons, the court ha not consistently followed this approach.

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    Commerce PowerThe Three Eras

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    Cases Before 1887

    Relatively few cases were considered outside of Gibbons until after the civil war

    related to commerce. Then there were a few cases considering the scope of the

    power.

    They were very broad using the Gibbons rule. In one case, The Daniel Ball,

    Congress was able to license intrastate ships as long as they were carrying

    goods that had come from other states.

    Other departed from Gibbons and limited the Commerce Power

    United States v. Dewitt (1869)- A Federal Law outlawed certain chemicals. The

    Court held that the law was a police regulation relating exclusively to the

    internal trade of the states. And Congress had no power to interfere with the

    internal trade.

    In the Trademark Cases (1878) - The court invalidated a federal system for

    registering trademarks. because ti applied the wholly intrastate business and

    therefore a power not codified by congress.

    1890 -1937 - A limited Federal Commerce Power.

    This era is extremely important. It is the first time that the Supreme Court

    aggressively used its power of judicial review to invalidate state laws.

    Constitutional law after 1937, has been primarily a reaction to this era. The court

    did not invalidate another law exceeding the scope of the commerce clause until1995.

    The court philosophy during this era was termed "dual federalism". which was the

    view that the federal and state governments were separate sovereigns and each

    had a zone of authority and that it was the judicial role to protect the states

    through enforcing the constitution to protect the zones reserved to the states.

    Beginning in the 1890s, Congress took a very different approach than they did in

    Gibbons. Regulatory matters were being left to the States. The court applied the

    tenth amendment to reserve a zone of activities for exclusive state control

    invalidating federal laws that were within the commerce power but usurped thestates.

    To understand the following cases, it is critical to know that the SC majority were

    committed to a unregulated economy. They were against regulatory interference.

    These doctrines reflect the court's view of the proper role of government and the

    appropriate role of the court.

    Beginning in the 1890s, Congress took a very different approach than they did in

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    Commerce PowerThe Three Eras

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    Gibbons. Regulatory matters were being left to the States. The court applied the

    tenth amendment to reserve a zone of activities for exclusive state control

    invalidating federal laws that were within the commerce power but usurped the

    states.

    The court defined three doctrines

    1. It narrowly defined "commerce"

    US v EC Knight. (Sherman Antitrust) - Federal law could not be applied

    because the monopoly was in sugar production not in commerce. This was

    because of the zone of activities that were cleared for the states

    Carter v. Carter Coal Co.

    2. The Court applied a restrictive interpretation of what "among the states" means.

    There must be a direct effect on interstate commerce

    Schecter Poultry - Federal law was unconstitutional based on insufficient

    effect of interstate commerce. There was no direct relationship.

    Shreveport Rate Cases - Court upheld the ability to of the interstate

    Commerce Commission to set intrastate railroad rates because of there

    direct impact on interstate commerce

    The difficulty is in drawing the distinction between direct and indirect effects.

    The court struggled with this throughout the era.

    One approach was to allow congress to regulate the stream of

    commerce.

    Swift v US - Upheld Sherman Antitrust among meat dealer to fix prices.

    Although the stockyards were intrastate, they were only a stop interstate.

    Stafford v Wallace - Upheld the Packers and Stockyards Actwhich gave the

    Secretary of Commerce the right to fix rates. They were just being held there

    for a time in the stream.

    3. The Court held that Congress violates the tenth amendment when it regulates

    matters left to state governments,Even if an activity was commerce and was among the states, Congress could

    not regulate if it was intruding into the zone of activities reserved for the states.

    The Tenth amendment reserved control of activities such as minim,

    manufacturing and production.

    The Child Labor Case (Hammer v. Dagenhart) - the most significant tenth

    amendment decision. A federal LAw prohibited interstate commerce for good

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    Commerce PowerThe Three Eras

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    made by Children but it was declare unconstitutional because it controlled

    production, which is reserved for the states.

    The far reaching result of upholding the act cannot be more plainly

    indicated than by pointing out that if congress can thus regulate matters

    entrusted to local authority by prohibition of movement of commodities in

    interstate commerce, all freedom of commerce will be at an end.

    The Commerce Clause from 1937-1995

    By 1937, there was great pressure to change the Constitution with the New Deal.

    Many different types of pressure came to bear on changing constitutional law but

    the court was still laissez faire. The distinction placed on indirect and direct effects

    on Commerce were arbitrary (i.e. mining etc) ANd the economic crisis made the

    laissez faire doctrine even worse and political pressure for change erupted.

    This was when Roosevelt tried to add justices to the supreme court to change its

    makeup. He ultimately gained 6 seats he needed to get his New Deal programs

    through. (there is no number requirement on justices in the Constitution)

    Three key decision overruled th earlier decisions and expanded the scope of

    Congress' power. And because of this, not one federal law was declared

    unconstitutional in the is era.

    1. NLRB v. Jones & Laughlin Steel Corp. (1937) - involved a Constitutional

    Challenge to the NAtional Labor relations Act. which created a right to

    collective bargaining. It applied when there was an affect on commerce.

    The Court initially explained how the steel business were a part of the

    stream of commerce and labor relations had a direct effect on it. It Flatly

    declared that the employees engaged in production did not mater.

    2. US v Darby (1941) - Challenge to the constitutionality of the Fair Labor

    Standards Act of 1938. Prohibited SHipment of goods by employers who

    did not pay minimum wage. UPheld, it departed from all previous

    doctrines. The Court rejected the view that production was solely

    regulated by the states. MOst importantly, the Court overrules Dagenhart

    and rejected the tenth amendment limits. Now, the law is constitutional so

    long as it is within the scope of congress; power.

    3. Wickard v. Filburn (1941) - left no doubt that the pre-1937 doctrines had

    been abandoned. The Agricultural adjustment Act limited Wheat

    production but Filburn went over his allotment because he was only using it

    for consumption not commerce. The COurt flatly rejected the commerce

    power enforced in the earlier era. Distinction between commerce and

    production or direct or indirect effects no longer applied. It upheld the act

    because the cumulative effect on commerce of many farmers all eating

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    Commerce PowerThe Three Eras

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    their own wheat had a substantial effect on

    These three cases adopt broad definitions of "commerce" and "among the states"and reject the Tenth amendment as a limit on Congress' power. Commerce

    includes all stages of business and there is no longer a distinction between

    production and manufacturing etc. Congress can regulate any activity, intrastate

    or interstate, that has a substantial effect on interstate commerce. Darby is

    simply a reminder that the tenth amendment is simply a reminder that congress,

    to legislate must point to an express or implied power. It no longer reserves a

    zone of activityfor the states.

    The Test for the Commerce Clause after 1937

    After 1937 until 1995, not one federal law was declared unconstitutional as

    exceeding the scope of the commerce power. In some cases, the court even

    deleted the word "substantial" and COngress could regulate as long a there was a

    rational basis for believing there was an effect on commerce.

    Hodel v Indiana (1981) - " a court may invalidate legislation enacted under the

    Commerce Clause only if ti is clear that there is no rational basis for a

    congressional finding that the regulated activity effects interstate commerce or

    that there is a reasonable connection between the regulatory means selected

    and the asserted ends."

    Civil Rights Laws

    Among the most important laws ever adopted is the Civil Rights Act of 9164which prohibits private employment discrimination. Logically it would seem

    most justified under the Fourteenth Amendment, but private behavior could not

    be regulated under the Fourteenth. So Congress chose the commerce clause.

    Heart of Atlanta Motel v U.S. (1964) The Court upheld the constitutionality of

    the Civil Rights Act to a Motel which would not admit Blacks. The only question

    was (1) whether Congress had a rational basis for finding that discrimination at

    motels affected commerce and (2) that the means it selected to eliminate that

    evil was reasonable and appropriate

    Regulatory LawsA key aspect of government since 1937 has been the proliferation of

    government agencies which came because of the broad commerce clause.

    This includes anything that can potentially ship across state lines including

    stocks and insurance policies.

    Congress can regulate all intrastate activities as long as their is a rational basis.

    Also, Congress can regulate intrastate activities if necessary to protect its

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    Commerce PowerThe Three Eras

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    regulation of interstate activities. The regulator power extends even after an

    item has been shipped in interstate commerce.

    Criminal Laws

    Perez v US (1971) - Title II of the Consumer Credit Protection Act Prohibited

    loan sharking activities. Defendant said that he operated wholly in NY and

    there was no evidence that he was part of organized crime. COurt concluded

    that loan sharking had substantial impact on interstate commerce.

    Particularized findings were unnecessary as long as congress had a rational

    belief that intrastate sharking affected interstate commerce.

    After Perez, Congress enacted RICO. which makes it a federal crime for any

    person employed by or associate with any enterprise engaged in or affect

    commerce in a pattern of racketeering activity. Racketeering is broadly defined

    to include gambling, prostitution, obscenity, bribery, extortion, and arson.

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    Commerce PowerGibbons v. Ogden (1824)

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    Facts: Thew New york legislature granted a steamboat monopoly to Robert Fulton

    which he licensed to Ogden. Gibbons had a competing Ferry Service. Ogdensuccessfully got an injunction against Gibbons due to his monopoly. Gibbons said

    that he had a right to operate his Ferry due to federal statute.

    Issue: What is the scope of the Commerce clause and can a state exercise power

    over a federal statute?

    Rule: Congress shall regulate commerce and has priority over competing state

    statutes.

    Reasoning

    Commerce power, although general, like the clause to collect taxes, is something

    specifically delineated to the government. So when a State regulates commerce

    between states then it is going against specifically mandated federal powers.

    Taxes by the states on the other hand do not keep the Feds from exercising its

    power to tax.

    Gibbons argues that "to regulate" is to have full power over the thing. and the

    court agrees.

    When states regulate their own internal affairs and those acts interfere with acts

    of congress, then there is an interference with a citizens federal rights. And the

    state laws must yield to federal laws.

    Reversed

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    Commerce PowerUnited States v E.C. Knight Co. (1895)

    6

    What is commerce?

    Facts: AMerican Sugar Refining Company is a New Jersey Corporation. The other

    four companies were incorporate din PA and held 33% of the sugar market and

    competitor of the ASRC. ASRC bought all the other sugar company in the country.

    The ASRC bought out the stock of the four PA companies, independent and without

    their knowledge of the monopoly created. ASRC then controlled 90% of the market,

    Issue: May congress suppress a monopoly on manufacture of good before they

    enter the stream of commerce.

    Holding No. Manufacturing is separate from commerce because it happens before

    any interstate transportation and congress has no power.

    Reasoning

    Control of manufacturing or monopolies might restrain trade but that is indirect.

    Here, Congress did not attempt to deal with the monopoly directly, or restrict

    corporation created by he states, or or make it criminal. The power to regulate

    commerce is the power to prescribe the rule b which commerce will be governed

    and is a power independent of that to suppress a monopoly

    Ruling Affirmed

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    Commerce PowerHouston Ry. v U.S. (1914)

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    What does "among the states" mean

    Supreme court did not have a consistent approach between 1890 and 1937. In

    some cases, the Court allowed congress the ability to regulate interstate

    transactions because of their impact in interstate commerce. In other cases, they

    restricted the power.

    In reading these cases, look at the different definitions of among the states.

    Facts: The suits were brought by the railroads against the Interstate Commerce

    Commission. to set aside an order on the Grounds that it exceeded its authority.

    The complaint was that the appellants maintained unreasonable rates. and that the

    prices discriminated in favor of Texas intrastate. ICC wanted them to raise the

    intrastate rates. RR said you can't do that because it is not interstate.

    Issue: May Congress regulate intrastate commerce where it is found to affect

    interstate commerce.

    Holding yes, where no federal regulation exists.

    Reasoning

    The ICC found that the class rates were unreasonable. Where Congress has the

    power to regulate trade, it dominates. This has been a tenet of the court. And this

    was done because of the problems that happened in the articles of confederation.

    The purpose was to make uniformity of regulation. And to do this, there must be

    freedom of interstate commerce form local control.

    Congress is empowered to regulate, to enact all measures necessary and

    appropriate and to promote growth and safety etc. Its authority extends to all

    operations that have a substantial relation to interstate traffic. that the control is

    essential to the security of that traffic, or to the efficiency of the service.

    Wherever there is interstate commerce, it is the Congress, not the states, that

    have the final say. Otherwise, Congress would be denied its constitutional

    authority

    So where does Congress get the power to regulate intrastate? Court has a test. If

    intrastate harms interstate, then you can have jurisdiction. But they don't reallysay that any measures that are truly interstate can be breached. So they say,

    When the intrastate activity has a"close and Substantial relationship"with the

    interstate activity, then congress can regulate it.

    Fundamental theory is inconsistent with Carter v. Cater Coal and EC Knight

    dealt with a dual federalist theory. The theory said that if states could regulate

    it, then the federal government could not. They were mutually exclusive.

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    Commerce PowerHouston Ry. v U.S. (1914)

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    Ruling Affirmed

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    Commerce PowerSchechter Poultry v U.S. (1935)

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    There were a branch of cases that came like stafford v Wallace, where the court

    sustained the regulation of intrastate activities in the stockyard of illinois becausethe stockyards were just a throat through which the stream of commerce passed

    and the cattle was just waiting for shipping.

    Facts: Petitioner were convicted for violation of the Live Poultry Code. They are

    slaughter house operators. NY has large market, Although almost all poultry is sent

    from other states Petition relates to wages, and hours and sales to retail dealer and

    butchers in brooklyn. It is no surprise that in NY, poultry comes from out of state.

    Government had to use regulations

    Petitioner said that (1) the Code adoption was beyond legislative power. (2) That

    it attempted to regulate intrastate transactions outside of its power, (3) it wasrepugnant to the due process clause.

    Issue Did the defendants transactions directly affect interstate commerce so as to

    be subject to federal regulation

    Holding - One goods have traveled interstate to their state, they are no longer part

    of interstate commerce or under federal jurisdiction

    Reasoning - Like Carter v Carter Coal but the other end of the stream of commerce.

    The court concludes in part that he stream of commerce approach did not apply

    here.

    The Statute is unconstitutional because there is an unlawful delegation. There is

    a rule that Constitutional power can only be delegated if there are clear

    guidelines. Here, the preparation of codes for each industry, including chickens,

    was delegated to the industries themselves and then that unconstitutional

    delegation doctrine required that it was unconstitutional and was struck down.

    The second reason is the Commerce clause - Even though all the chickens came

    from out of state, it was not considered part of the stream of commerce. The

    stream of commerce had stopped. Since New York was the final destination.

    Then

    Necessary and well established distinction between direct and indirect effects oninterstate commerce. bright line is case by case. general distinction is If it is

    purely indirect, then he state maintain the power. (which in essence is him making

    it up) A substitute for "close and Substantial Relationship -

    The distinction must recognized as fundamental or Congress would have too

    much power.

    Ruling

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    Commerce PowerChampion v. Ames (Lottery Case 1903)

    10

    Facts: Statute says No Lottery tickets can be transported state to state. Champion

    purposely carried a box of tickets across state lines. Appellant argues thatCongress has the power to regulate, not to prohibit commerce. Prohibiting is a statefunction.

    Issue May Congress use the commerce clause to prohibit shipments to protectcommerce of all states.

    Holding Yes

    Reasoning

    The Court says that Congress has the power to regulate and that includes thepower to prohibit. The Congress has acquired Police power over time and

    through these cases. Congress can exclude any item from being transportedacross state lines. But this is too big and must be done on a case by case basisand this rule does nothing more than say lottery tickets cannot be transported.

    Ruling - Affirmed

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    Commerce PowerHammer v Dagenhart (The Child Labor Case 1918)

    11

    One of the dumbest decision ever by the SC

    Facts: Father on behalf of his sons tried to stop a law that prohibited interstatecommerce of products made by underaged workers - A child labor law.

    Issue: Is Congress allowed to regulate Commerce this way

    Holding - Congress does not have the authority to regulate child labor, a purely statefunction by preventing interstate commerce of their products

    Reasoning

    The statute denies the privilege of the goods in interstate commerce if they were

    produced in a mill where a child under age 8 was employed. And one would thinkthat after the lottery case, that this was a slam dunk, that there was no way itwould not be sustained. But the court say that it is unconstitutional. That it isoffends a process that is purely local in character.

    How does the court not be consistent with the other decisions such as the Mannact, or the lottery case? A state can't protect itself against the unfair competitionof goods produced in another State that are subsidized by Child labor? Theycan't impose a tariff which is totally against the constitution, nor can they make itcriminal to use a piece of furniture. Regardless of how it is made. But you couldsay that you cannot sell lottery tickets or your own body, under the police power.And that is why this is all backwards. Because the states could protect

    themselves from the lottery type of commerce. Here, the federal governmentreally was exercising a power that congress was supposed to have. Because thestates cannot protect themselves from unfair labor practices.

    One would think this was just a deny of interstate and Congress was allowed todo this. But it is not. At this time, Congress is seeking to regulate the productionof goods and since the States can regulate it, then COngress can't. This is DualFederalism. Also, the evil occurs after the transportation as opposed to here it isbefore the transportation.

    This was overturned in US v. Darby

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    Commerce PowerNLRB v. Jones & Laughlin Steel Corp. (1937)

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    Facts: Jones is a huge corporation with 75% of its steel sent outside its home state

    of PA. Steel Corp violated Labor Act by using unfair labor practices. affectingcommerce. They were discriminating through hiring and tenure practices, andcoercing and interfering with the Union. NLRB ordered a cease and desist, The corpfailed to comply and an action was brought.

    Issue Is the NLRB an invasion of states power in attempting to regulate all industry.

    Holding Congressional power to protect interstate commerce is not limited totransact;ions which are "part of the flow" but may be used to regulate those actswhich have a substantial relation to interstate commerce which will protectcommerce from burden and constructions.

    Reasoning

    The NLRB can be construed as to act within the sphere of constitutional authority.The point of the Act is interstate commerce.

    The act defines the term "affecting commerce". which means labor disputes

    burdening commerce. The definition is one of inclusion and exclusion. It purports

    to reach only that which affects commerce and is thus within its sphere. Acts that

    have effect are not immune because they come out of labor disputes, it is the

    effect upon commerce, not the source if injury which is the criterion.

    Defendants argue that manufacturing is not commerce, but protection ofcommerce is not limited only to commerce.

    Congress authority to deal with such burdens is plenary, and reaches to thesource of the burden wherever it may lie. Thus, although the activities may beintrastate in character when separately considered, if they have such a close andsubstantial relationship to interstate commerce that their control is essential orappropriate to protect that commerce, Congress cannot be denied the power toexercise that control.

    While it seems this cite would come from Shreveport Rate case, but instead he

    cited Carter v Carter Coal. Shreveport is the better cite because that is what

    he said in that case, being the author. But he chose Carter to try and indicate

    that the court was not making the switch but being consistent.

    Analysis:

    Labor strife in the steel industry has a gigantic ripple effect on interstate

    commerce because of the important place steel occupies in the modern

    world. Automobiles, residences, buildings, and even the very computer

    being used to write these words include steel. This, however, is just a

    consideration of the finished product, to say nothing of all the individual

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    Commerce PowerNLRB v. Jones & Laughlin Steel Corp. (1937)

    12-2

    workers involved in making the steel, as well as those involved in producing

    the products that use steel. A disruption at the source, that is, at the point

    where steel is produced, or at any prior point in the chain of production, can

    therefore have a devastating effect upon interstate commerce. Because this

    is a national problem, it demands a national solution. In N.L.R.B. v.

    Friedman-Harry Marks Clothing Co., the Court upheld the application of the

    NLRA to even a relatively small clothing manufacturer that shipped clothing

    in interstate commerce. The Court noted that a strike in the New York

    clothing industry would have a severe effect on interstate commerce. This

    shows that an economic effect on interstate commerce, even if slight, gives

    Congress authority under the Commerce clause to regulate the activity.

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    Commerce PowerUS v. Darby (1941)

    13-1

    Facts: Darby, A Georgia lumber producer, challenged an indictment against him for

    violation of the Fair Labor Standards Act.A Georgia lumber company violatedfederal minimum wage/maximum hour laws. Its defense is that the federalgovernment overreached its Commerce Clause authority in setting the standards.

    Issue

    1. Can Congress prohibit the interstate shipment of lumber manufactured by

    employees whose wages do not meet the minimum standard?

    2. Does it have the power to prohibit employment of workmen engaged in

    production of interstate commercial goods at other than prescribed wages

    and hours?

    Holding Congress has the authority, under the Commerce Clause, to exclude anyarticle from interstate commerce, in judgment that they are injurious to the publichealth, morals or welfare.

    Reasoning

    Congress powers to regulate commerce extends to regulations that prohibitcommerce. Citing Gibbons v Ogden. COngress is free to exclude form interstatecommerce articles which may be injurious to public health , even though the statehas not sought to regulate its use. SUch regulation is not forbidden just becausethe product ultimately is used within a state.

    Hammer v Dagenhart (Prohibition interstate commerce is limited to articles whichin themselves are harmful) has long been abandoned. It is now and foreveroverruled

    Here, not of the relationship between state and federal governments, Congresscan use any form necessary to the attainment of the permitted end, beingenforcing labor law. The Tenth Amendment does not affect this decision. It isnothing more than a declaratory statesmen of the relationship between state andfederal governments and nothing more than a statement to ally fears of a newnational government exercising powers not granted.

    Analysis:

    Remember the Courts ruling in Hammer v. Dagenhart, that Congress did not

    have the power, under the Commerce Clause, to prohibit child labor through

    a general ban on the shipment of its fruits. Was Hammertruly a ruling

    without support in prior and subsequent case law? In the Lottery Case the

    Court ruled that only those articles adjudged to be deleterious in and of

    themselves could be banned from interstate commerce. In Schechter Poultry

    (the Sick Chicken Case), the Court ruled that the commerce power did not

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    Commerce PowerUS v. Darby (1941)

    13-2

    extend past the initial sale once an article entered a state. In E.C. Knightthe

    Court ruled that Congress could not regulate manufacturing because it is a

    local concern. The holding in Carter v. Carter Coalis directly on point for

    Darby. The Court held therein that Congress could not set wages and

    working conditions for miners, yet, after Darby, it has power to do so.

    Justice Stones assertion thus seems somewhat disingenuous. The

    difference is in the Courts newfound ability to swallow the governments

    race to the bottom rationale. The result is that corporations have a harder

    time exploiting competition in attracting industrywhich means jobs and a

    broader tax basebetween states.

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    Commerce PowerWickard v. Filburn (1942)

    14

    THE SUPREME COURT SETS A NEW OUTER BOUNDARY OF THE

    FEDERAL COMMERCE POWER

    Facts: Wickard (P) exceeded his allotted quota for wheat production, the excess

    amount to be used for his own consumption. He was fined by the government and

    seeks to have the quota ruled unconstitutional.

    Issue: Does the Commerce clause include the regulation of those items notintended for distribution nationally

    Holding Congress may regulate all activities having a substantial effect on interstatecommerce, even those that do not have a substantial effect individually but do whenviewed in the aggregate.

    Reasoning

    Darby gave Congress power to regulate production of goods for commerce butthe appellee here urges that since he is not selling but consuming the product, tiis beyond the reach of the legislature.

    Questions of power are not to be decided by reference to a formula ornomenclature such as production, but rather, whether it has an effect on thestream of commerce.

    They appellees own contribution of wheat may be negligible consumption but notenough to remove him from the scope of federal regulation where combined with

    other consumers is hardly trivial. Unlimited production for consumption keeps theperson out of the buying market and therefore effects commerce and wouldobstruct the purpose for which the Act was initiated.

    Analysis:

    It is clear after Wickard, if it wasnt clear after Darby, that the Tenth

    Amendment is ineffective as a check on the federal commerce power.

    Wickardalso set a new, broader standard for the exercise of the commerce

    power. How difficult is it to come up with an intrastate activity that doesnt,

    in some way, substantially affect interstate commerce when viewed in the

    national aggregate? As demonstrated in the 1960s civil rights cases,Congress has taken advantage of this vast broadening of its commerce

    authority. After Wickard, the only significant checks on the commerce power

    were specific guarantees, such as those in the Bill of Rights.

  • 8/14/2019 Con Law Notes Test

    23/23

    Commerce PowerHeart of Atlanta Motel v US

    15

    RACIAL DISCRIMINATION IN PUBLIC ACCOMMODATIONS EXERTS A

    SUBSTANTIAL AND HARMFUL EFFECT UPON INTERSTATE COMMERCE

    Facts: An Atlanta, Georgia motel wishes to continue its racially discriminatoryoperations in spite of the 1964 Civil Rights Act (Act) barring racial discrimination inpublic accommodations

    Issue : May Congress regulate local activities that can exert substantial influence oninterstate commerce.

    Holding Yes

    Reasoning

    Discrimination is rampant throughout the country and impairs negroes ability to

    travel, not knowing if they will find accommodations.

    It is the same interest in protecting interstate commerce that lead to . . . (the Citemost of the previously discussed cases)

    It is said that the operation of the motel here is of purely local character. Even if

    this were true, if it is interstate commerce that feels the pinch, it does not matter

    how local the operation which applies the squeeze. Thus, Congress may regulate

    the local incidents of interstate commerce, including within the states of origin

    and destination, which might have a substantial and harmful effect upon that

    commerce.

    The Courts opinion in Heart of Atlanta is well reasoned, at least partially due

    to the testimony Congress took when considering the Civil Rights Act of

    1964. Congress knew the bar it had to meet in order to make the legislation

    constitutional, just as it surely knew the speed with which the Act would be

    challenged. The Acts constitutionality here flows from the fact that an

    inability to rely on finding accommodations while traveling from state to state

    is a substantial obstruction to the undertaking of such travel. When a

    significant percentage of the population is much less likely to travel

    interstate, even the purely economic ramifications are easy to recognize.People who travel spend money in local economies, without acting as a

    drain on public resources. A traveler is, therefore, someone who pays

    without also taking. Interestingly, had civil rights not been on just-

    assassinated president John F. Kennedys legislative agenda, the Act may

    not have passed at all, but his successor, Lyndon Johnson, made a strong

    moral case for passing the agenda as a way of honoring JFKs memory.