Module 8 - Commerce Clause - Modern Interpretations

What resulted in the modern interpretations of the Commerce Clause?

Greater economic stability and renewed concern about federal overreach. Aimed to preserve federalism.

Under federalism, what powers do states hold, and what powers does the federal government hold?

State: General police powers

Federal: Congress only has enumerated powers

What is the 10th Amendment?

Any power not specifically given to the federal government—and not forbidden to the states—is reserved for the states or the people.

What is the new framework for determining if something falls under the Commerce Clause?

1. Formalistic: Requires rigid categories of economic vs non economic activities (e.g. controlling the price of a notary vs controlling gun free zones).

2. Clear, traceable link between regulated conduct and an enumerated power

3. Structured regulation that fits defined categories (Channels, Instrumentalities, Substantial Effects)

What did Justice Jackson say in the Filburn case?

It is not a violation of due process for the Government to regulate what it subsidizes.

Filburn took the farm program’s loans, higher prices, and subsidies but refused its limits on how much he could grow.

Holding: You cannot accept the benefits of a government program and then claim the rules of that program are fundamentally unfair.

Under the modern framework, what may Congress regulate under the Commerce Clause?

CIA:

1. Channels: The paths of interstate commerce, including local activity that blocks their flow.
   Examples: Highways, rivers, airspace, the internet (Heart of Atlanta)

2. Instrumentalities: The means of interstate commerce, and persons or things in it, even if they never cross state lines.
   Examples: Airplanes, shipping containers, protecting ports and railroads.

3. Substantial Effects: Activity substantially affecting interstate commerce
   Examples: Home-grown wheat (Darby, Wickard)

For the Substantial Effects test, what are the ELEMENTS for it to be satisfied?

1. Substantial Effect: The regulated activity must substantially affect interstate commerce.

1. Economic in Nature: If court is aggregating multiple small acts that add up to a massive national impact, each act must be economic in nature.

For the Substantial Effects test, what are the FACTORS the court considers?

1. Jurisdictional Hook: Is there a jurisdictional element/hook in the statute ensuring it only applies to items or people that have crossed state lines (e.g., "possession of a firearm that has moved in interstate commerce").

1. Congressional Findings: Did Congress include data and research in the statute explaining exactly how the activity affects the national economy?

2. Attenuated Causal Chain: Does the court have to weigh “inference upon inference” to connect the local activity to the national economy?

For the Substantial Effects test, what is the EXCEPTION Justice Scalia considers?

Even if you assume growing a single medical plant is completely non-economic, Congress can still regulate it.

Under the Necessary and Proper Clause, Congress must wipe out local possession to prevent local plants from leaking into the national market and destroying the broader federal drug ban.

FACTS:

Alfonso Lopez, Jr., a 12th-grade student at a high school in San Antonio, Texas, carried a concealed .38 caliber handgun and five bullets into school. He was charged under a federal indictment with violating the Gun-Free School Zones Act of 1990, which made it a federal offense for any individual knowingly to possess a firearm at a school zone. Lopez was tried and convicted in district court.

1. What is this case’s name?

2. What is the Issue?

3. What is the Holding?

1. United States v. Lopez

2. Whether the Gun-Free School Zones Act of 1990 (18 U.S.C. § 922(q)), which prohibits the knowing possession of a firearm in a school zone, exceeds Congress's authority to legislate under the Commerce Clause.

3. The Gun-Free School Zones Act of 1990 exceeds Congress's authority under the Commerce Clause because the local possession of a firearm in a school zone is not an economic activity that substantially affects interstate commerce.

In United States v. Lopez, the government argued school violence harms learning, productivity, and the economy. What’s the issue with this reasoning?

It piles “inference upon inference” and would erase the line between what is “truly national and what is truly local.”

Can Congress regulate non-economic, violent crime based on its aggregate effect on interstate commerce, even with extensive findings? Why or why not?

No (Morrison). The “but-for causal chain” reasoning was rejected in Lopez.

1. Who decides what has a “Substantial effect” on commerce to determine if conduct falls under the Commerce Clause? Basically, who decides if an activity is economic?

2. Suppose the court decides the activity is economic. What is the second question you must ask?

1. The Court. NOT Congress. If court decides its non-economic, the law DIES.

2. Did Congress have a rational basis to believe this activity substantially affects interstate commerce, meaning the activity actually ripples out and crosses state lines?
   Courts ask only whether Congress had a rational basis.

Explain Section 5 of the Fourteenth Amendment.

Congress can only use Section 5 to target state or government actions that violate civil rights, not purely private conduct by individuals or private businesses.

Provide case examples of Section 5 of the Fourteenth Amendment.

Scenario A: The bad actor is the Government.

• Examples: A state university, a local police department, a city mayor, a public school.

• The Constitutional Tool: Congress uses Section 5 of the 14th Amendment.

• Why: The 14th Amendment literally says "No State shall..." deprive people of rights. So when the state is the one misbehaving, Section 5 is the perfect weapon.

Scenario B: The bad actor is a Private Entity (Heart of Atlanta Hotel, Morrison rapists).

• Examples: A privately-owned hotel, a restaurant, a private employer, or just a random guy committing a crime.

• The Constitutional Tool: Congress must use the Commerce Clause.

• Why: The 14th Amendment cannot touch private people or private businesses. It is legally useless here. Congress has to find another way to stop them, and regulating interstate commerce is usually their only option.

FACTS:

In September 1994, Christy Brzonkala, a Virginia Tech freshman, alleged that varsity football players Antonio Morrison and James Crawford assaulted and raped her. She became severely depressed and dropped out. Local prosecutors did not charge them. Virginia Tech cleared Crawford and reduced Morrison’s two-semester suspension to a minor sanction for “using abusive language.” She sued the rapists and the school under the Violence Against Women Act’s civil remedy (42 U.S.C. § 13981), backed by four years of hearings and support from 38 state attorneys general.

1. What is this case’s name?

2. What is the Issue?

3. What is the Holding?

1. United States v. Morrison

2. Does Congress have the authority to enact the civil remedy provision of the Violence Against Women Act of 1994 (42 U.S.C. § 13981) under either Section 8 of Article I (the Commerce Clause) or Section 5 of the Fourteenth Amendment?

3. Gender motivated violence is not economic activity, the provision had no jurisdictional element, and the findings (deterred travel, lost productivity, medical costs) relied on attenuated reasoning that would let Congress regulate all violent crime and family law.
   It also failed under Section 5 because it targets private individuals, not states.

What is the rule under Raich on what type of activity Congress may regulate?

Congress may regulate purely local, non-commercial activity if

1. in the aggregate it substantially affects supply and demand in a national market for a fungible commodity

OR

2. Regulating it is an essential part of a comprehensive regulatory scheme (supported by the Necessary and Proper Clause).

FACTS:

California’s Compassionate Use Act (1996) allowed medical marijuana, but the federal Controlled Substances Act (1970) prohibited it.

Respondents, California residents, cultivated marijuana in their own homes for personal medical use WITHOUT buying, selling, or bartering. They brought suit to prevent the enforcement of the federal Controlled Substances Act (CSA) against them, arguing that federal prohibition exceeded Congress's commerce power when applied to intrastate, non-commercial medical marijuana cultivation.

1. What is this case’s name?

2. What is the Issue?

3. What is the Holding?

1. Gonzales v. Raich

2. Does Congress's regulatory authority under the Commerce Clause (augmented by the Necessary and Proper Clause) permit the federal government to prohibit the local cultivation and possession of marijuana for personal medical use pursuant to state law?

3. Like Wickard’s wheat, marijuana is a fungible commodity with an interstate market, and home-grown supply could be drawn into it. Thus, the federal Controlled Substances Act is a constitutional exercise of Congress's commerce power as applied to the intrastate cultivation and possession of marijuana for medical purposes.

Distinguish Lopez (the school gun case) and Morrison (the college rapist case) from Raich (the marijuana case).

Unlike Lopez and Morrison, the Act regulates a market for an economic commodity (“economic” defined by dictionary as the production, distribution, and consumption of commodities).

Exempting medical use would leave a “gaping hole” in the scheme.

What is the Rule from NFIB v. Sebelius (2012)?

The power to “regulate commerce” presupposes existing commercial activity.

Congress may regulate activity but may not compel people to enter commerce.

In NFIB v. Sebelius, the government argued that to make their massive national healthcare scheme work, it was "necessary and proper" to force these inactive people to buy health insurance. How did the Supreme Court respond?

The Court ruled that the Necessary and Proper Clause is a tool to manage commerce that already exists.

It is not a magic wand that Congress can use to drag a citizen off the couch, force them to buy a commercial product, and then claim, "Now that you are engaging in commerce, we have the power to regulate you!"

FACTS:

Enacted in 2010, the Affordable Care Act (ACA) included a provision known as the "individual mandate," which required most Americans to maintain minimum essential health insurance coverage or make a "shared responsibility payment" (penalty) to the Federal Government. The government defended the mandate under the Commerce Clause, arguing that the uninsured are active in the healthcare market and shift costs onto insured individuals through uncompensated emergency care, and that the mandate prevents cost-shifting and expands the risk pool. Petitioners challenged the mandate as an unconstitutional expansion of federal power, alongside a challenge to the ACA's Medicaid expansion, which threatened states with the complete loss of existing Medicaid funds if they refused to expand their programs.

1. What is this case’s name?

2. What is the Issue?

3. What is the Holding?

1. NFIB v. Sebelius

2. Did Congress exceed its enumerated powers under the Commerce, Taxing, and Spending Clauses by enacting the individual health insurance mandate and the Medicaid expansion conditions?

3. The individual mandate exceeds Congress's powers under the Commerce Clause and the Necessary and Proper Clause.
   The individual mandate is constitutional as a valid exercise of Congress's taxing power.
   The threatened withdrawal of all existing Medicaid funds for states that decline to participate in the ACA's Medicaid expansion is unconstitutional (gun to the head), though the expansion remains constitutional if stripped of the penalty of losing existing funds.

Synthesize all the cases in this module. Answer the following for each case:

1) Case Name 2) Activity regulated 3) Result 4) Key reason

1. 1) Lopez. 2) Gun possession near schools 3) Struck 4) Non-economic, only an indirect link.

2. 1) Morrison. 2) Gender-motivated violence 3) Struck 4) Non-economic, findings not enough

3. 1) Raich 2) Home-grown medical marijuana 3) Upheld 4) Part of a comprehensive economic scheme

4. 1) NFIB 2) Not buying health insurance 3) Struck (commerce) 4) Inactivity cannot be compelled

In Carter v. Carter Coal (1936), the Supreme Court held that provisions of the Bituminous Coal Conservation Act of 1935 regulating the wages and hours of each coal miner exceeded Congress's power under the Commerce Clause. The Court reasoned that an individual miner's production of coal does not have a direct effect on interstate commerce. Why would this reasoning be insufficient for concluding that Congress lacked power to enact the provision under more recent Commerce Clause precedents?

A. Under current law, the Court would consider whether Congress reasonably could conclude that the aggregate production of all affected miners might have a direct effect on interstate commerce.

B. Under current law, the Court would consider whether Congress rationally could conclude that the aggregate production of all affected miners might have a substantial effect on interstate commerce.

C. Under current law, the Court would consider whether Congress rationally could conclude that the aggregate production of all affected miners might have an economic effect on interstate commerce.

D. Under current law, the Court would consider whether Congress rationally could conclude that the average production of all affected miners might have an indirect effect on interstate commerce.

B

When Congress relies on its Commerce Power to pass a statute, it often expressly makes some connection to commerce an element of the statute. In Lopez v. United States (1995), however, the Supreme Court recognized that such an element is not necessary for a statute to be constitutional. Which of the following cases best supports this proposition?

A. Wickard v. Filburn (1942)

B. Katzenbach v. McClung (1964)

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

D. United States v. Darby (1941)

A

The federal government recently purchased a large U.S.-based airplane manufacturer that was facing bankruptcy. Government officials explained that they were concerned that if this key manufacturer failed, domestic capacity to build large aircraft would be greatly diminished, seriously threatening national security. The United States now seeks to make the newly acquired manufacturer more profitable. Which legislative measure is most likely not permitted under the Commerce Clause?

A. Exempting the manufacturer from expensive federal labor and safety regulations.

B. Limiting the number of aircraft competing manufacturers can produce.

C. Requiring major corporations to purchase a specified number of corporate jets from the manufacturer even if they do not want to purchase any aircraft from any manufacturer.

D. Prohibiting U.S. air carriers from purchasing foreign-made aircraft for a one-year period.

C

Congress has enacted a comprehensive scheme of laws governing radio communications over certain frequencies. Smith is an organic farmer in Oregon who lives on his own farm and grows Belgian endives. In violation of one provision of the laws, Smith uses a low-powered radio transmitter set to a prohibited frequency to chat with his parents, who live on the same farm but in a separate house. It is undisputed that Smith's radio signals are too weak to reach beyond the boundaries of his farm or interfere with any other radio signal. Smith contends that the provision at issue is unconstitutional because it is beyond the reach of Congress's Commerce Power. Is the provision within Congress's commerce power?

A. No. Congress cannot regulate Smith's radio signals because they are not used for a commercial purpose.

B. Yes. Congress could rationally conclude that Smith's radio signal by itself has an effect on interstate commerce even if Congress knew that the signals were too weak to reach beyond the boundaries of his farm and could not identify any way in which the signal conceivably might affect interstate commerce.

C. Yes. Congress had power to enact the provision at issue if the provision is necessary to ensure that a comprehensive scheme for regulating interstate commerce is not undercut, even if the provision by itself would reach conduct that does not have a substantial effect on interstate commerce.

D. No. Congress cannot regulate Smith's radio signal if his signal, even when aggregated with all other similar low-powered radio signals throughout the United States, would be too weak to have a substantial effect on interstate commerce.

C

The Supreme Court held in Gibbons v. Ogden (1824) that Congress's power to regulate commerce is "plenary." According to modern precedents, what can Congress not do with this plenary power?

A. Require otherwise inactive individuals to engage in particular commercial transactions.

B. Regulate how individuals engage in particular commercial transactions.

C. Subsidize individuals as they engage in particular commercial transactions.

D. Prohibit individuals from engaging in particular commercial transactions.

A