Commerce Clause

The Commerce Clause

1. How did Gibbons v. Ogden (1824) define commerce and the meaning of the Commerce Clause?  

   1. Gibbons v Ogden (1824): the court ruled that the regulation of sea navigation for purposes to conduct interstate commerce was reserved by the Congress. also meant that states can’t create barriers  interfere with with interstate commerce

   2. facts: Gibbons and Ogden disputed about the right to operate steamboats between NY and NJ. Gibbons had a federal license to operate and Ogden had a NY license. 

2. What is the Commerce Clause?  Why did the framers of the Constitution include a Commerce Clause that provides Congress power to regulate commerce among the several  states when the Articles of Confederation did not provide Congress with that power?

   1. Commerce Clause grants the Congress to regulate commerce between states, nations and Native American tribes. The framers included this Clause because in Articles of Confederation, there was no outlined power to effectively regulate interstate commerce. which led to economic conflicts, conflicting state regulations and barriers to trade. To address these issues and promote more unity, the framers gave the Congress to regulate commerce.

3. How did the Gibbons v. Ogden decision interpret the meaning of the Commerce Clause?  

   1. Remember that it empowers Congress. It states that commerce is not merely buying and selling but includes channels of trade and instrumentalities. That would mean that Congress has power to regulate waterways and roads, steamboats and trains.

Dormant Commerce Clause

1. What do we mean by the Dormant Commerce Clause? 

1. The Dormant Commerce Clause: refers to the prohibition, implicit in the Commerce Clause, against states passing legislation that discriminates against or excessively burdens interstate commerce.

The Supreme Court has interpreted the Commerce Clause to be a restriction of power on the states.  When Congress passes a law that conflicts with a state law on a Commerce Clause matter, the federal law preempts the state law. In the absence of a preemptive Congressional law, the Supreme Court can strike down a state law that is in violation of the Commerce Clause. When it does so, it is invoking the Dormant Commerce Clause. Justice Thomas does not believe the Dormant Commerce Clause should exist.  He believes that if a state law interferes with interstate commerce in a way that is too burdensome, it is not the job of the Supreme Court to strike it down. The Court’s decision in the National Pork Producers case weakened Supreme Court power under the Dormant Commerce Clause.

Doing Dormant Commerce Clause analysis:

1. In what ways has the Supreme Court upheld state exercise of power that involves interstate commerce?  

   1. Think about the Cooley case: When it involves a wholly local concern and one that does not impede the national market. (PA law required ships to hire a local pilot)

   2. When it is not creating a protectionist barrier to interstate commerce. Is the state law intended or likely to create an advantage to in-state businesses and disadvantage to out of state parties? Think about the Dean Milk Company v. City of Madison (1951) case. https://www.oyez.org/cases/1940-1955/340us349

      1. Dean Milk Company v City of Madison (1950): discrimination against non-local producers was not narrowly tailored to serve the city’s interests; cities and states are not allowed to economically isolate themselves from the rest of the nation.

   3. If the state discriminates on its face against interstate commerce – it will be declared a per se unconstitutional violation of the Commerce Clause, 

      1. **unless the state has a compelling reason for pursuing that interest and there is no non-discriminatory way of accomplishing that compelling reason.  

      2. Maine v Taylor (1987): Maine’s ban of importation served a legitimate local purpose that would not be achieved through nondiscriminatory alternatives; the states retained the authority to regulate matters of “legitimate local concern”

   4. What do we mean by extraterritoriality?

      1. extraterritoriality: the application of one region's laws to people, businesses, activities that are outside of the region. allows for the authority over things happening in other places if there is a connection or impact on the interests. 

2. What is the test if the state law or policy is not discriminatory on its face or there is not an issue of extraterritoriality, but its influence on interstate commerce is incidental?

1. There is a balancing test. Remember these dormant commerce clause cases:

   1. South Carolina State Highway v. Barnwell (1938): the law for the regulation of the size of the trucks is a matter of substantial local concern, because states own and maintain their highways. Since there are no Congressional regulations in this area, the state retains the right to regulate.

   2. Southern Pacific Railroad Company v. Arizona (1945): the law imposed a great burden on interstate commerce because all of traffic in Arizona was interstate traffic, thus, trains operating outside of AZ would be subject to the compliance of the law. because of the law, 30% more trains were needed = +$1 bil.

   3. Bibb v. Navajo Freight Lines, (1959): if the effects of measures (mudguards) are “slight or problematic,” then the interest of the commerce will prevail. there were not identified benefits of using one over the others, but they may even result in hazard. 

2. If in pursuing a legitimate state interest, like safety and maintenance of roads, the state burdens interstate commerce, the Court will do a balancing test. Does the legitimate state interest outweigh the burden on interstate commerce?  If the burden outweighs the benefit the Court can strike it down.

Dormant Commerce Clause Test:

• Does the legitimate state interest outweigh the burden on interstate commerce? 

  • if it outweighs the benefit, the court can strike it down

• Does the law discriminate against interstate commerce or treat in state and out of state entities differently?

  • if favoring in-state actors, may be subject to stricter scrutiny.

3. Does the legitimate state interest pursued by the state unduly burden interstate commerce? Does the burden on interstate commerce outweigh the in-state benefit?

1. Pike v Bruce Test (1970): 

   1. Where the statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. 

   2. If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will, of course, depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities.

4. Extraterritoriality as it relates to the Dormant Commerce Clause?

   1. Carbone v Town of Clarkstown (1993): Commerce Clause invalidates local laws that discriminate against interstate commerce, disrupt the flow of articles of commerce, and grant municipalities disproportionate market gains.

   2. West Lynn Creamery v Healy (1994): the Court determined that the pricing order violated the Commerce Clause because it discriminated against interstate commerce. the benefit of the tax was exclusive for in state dairy farmers

   3. Baldwin v G.A.F Seelig (1935): the court ruled that the Commerce Clause prohibits states from imposing regulations that discriminate against interstate commerce by favoring local economic interests

      1. Remember all of these cases had to do with the effect of state regulations on out of state pricing.

The Expanding Power of Congress Under the Commerce Clause

1. How did the National Labor Relations Board v. Jones and Laughlin Steel https://www.oyez.org/cases/1900-1940/301us1 , (1937) change the law regarding the Commerce Clause?  What did the Court mean when it allowed Congress the power to make laws under the Commerce Clause and Necessary and Proper Clause that regulated wholly intrastate activity that had a substantial relation to interstate commerce? United States v. Darby https://www.oyez.org/cases/1940-1955/312us100case , (1941). Wickard v. Filburn, (1942) https://www.oyez.org/cases/1940-1955/317us111 ?  Remember the aggregation principle. Congress based the The Civil Rights Act of 1964 on reliance on the Commerce Clause in Heart of Atlanta Motel v. United States, (1964)  https://www.oyez.org/cases/1964/515

The Court Limits and Defines Congressional Power Under the Commerce Clause

1. United States v. Lopez, (1995), How did the Supreme Court limit Congressional power under the Commerce Clause? What was the Court’s reasoning in its opinion? Why did it argue that the Gun-Free School Zone Act of 1990 was unconstitutional?  Did the gun violence around schools not have a substantial effect on interstate commerce?  How did the Supreme Court in Gonzales v. Raich, (2004) distinguish this case from the Lopez decision?

1. United States v Lopez (1995): the possession of a gun in a local school zone is not an economic activity and does not have substantial effect on interstate commerce.

   1. it limited Congress’ power to regulate interstate commerce that did not extend to purely local activities that had no substantial impact on interstate commerce.

2. Gonzales v Raich (2004): Congress has the authority to prohibit the local cultivation and use of marijuana despite state law. Congress commerce clause power to regulate purely local activities that are part of a "class of activities" with a substantial effect on interstate commerce. 

   1. the court held that congress has the power to regulate the production and use of marijuana for medical purposes, even if it's intrastate and non-commercial. the aggregate impact of intrastate marijuana transactions → substantial effect on the national marijuana market which would impact interstate commerce.