The United States Constitution

A forum for discussing the meaning of the United States Constitution for our political process.

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Location: Middleton, Massachusetts, United States

I am concerned about the direction of the United States economy and politics, and about our declining influence in the world. I feel we are losing our moral and ethical bearings.

Thursday, August 17, 2006

What is Interstate Commerce?

Aaron Ogden (he of Gibbons v. Ogden)Article 1, Section 8, Clause 3 of the Constitution states that the Congress shall have power:

to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.

This is informally known as "the commerce clause" - sixteen seemingly innocent words from which have sprung volumes of laws, commentaries, and disputes. Why even include such a clause? The reason - what if a state like New Jersey was able to charge tariffs or prevent ships from New York from entering their waters? If a shipment had to cross many states, say from Massachusetts to Virginia, and each state had different laws about weights and measures, or what could be carried on their roads, it would be difficult to do business. The Founding Fathers felt that there is a national interest in encouraging the flow of goods from one state to another.

Gibbons v Ogden (1824), involving steamboat traffic between New York and New Jersey, established the right of Congress to regulate interstate commerce. Robert Fulton, the inventor of the steamboat, and Robert Livingston, from a highly politically connected New York family, granted Aaron Ogden, a New Jersey steamboat operator, the exclusive right to operate a steamboat between New York City and Elizabeth Point, New Jersey. The right was established under a New York state law. Thomas Gibbons had been operating a competing steamboat service under a Congressional law established before the Gibbons grant. Gibbons was prevented by Ogden from crossing into New York waters. Gibbons sued, claiming that he had that right under the Commerce clause - in other words, that the Congressional grant was superior to the Ogden grant.

The Court, with the majority opinion delivered by Chief Justice John Marshall, sided with Gibbons. The ruling established the right of Congress to regulate interstate commerce.

The debate doesn't stop there. A state still has power to regulate commerce within its boundary. So the unresolved questions are: when when does commerce become interstate? And what exactly does "commerce" entail?

The distinction might seem clear cut at first, but the Court rulings have evolved. Activity that occurred solely within the boundaries of one state have been ruled within the scope of the Commerce Clause, and thus regulated by Congress. A major test of the Commerce Clause was United States v. E. C. Knight (1895). E. C. Knight was a sugar manufacturer that controlled over 98% of the sugar refining in the United States. The company only operated in one state. Under the Sherman Anti-Trust Act of 1890, Congress sought to regulate the "sugar trust". The Court was asked to rule whether manufacturing constituted interstate commerce. In an 8-1 decision, the Court decided against the government - manufacturing was not by itself interstate commerce.

During the New Deal era, Congress again attempted to expand it's interpretation of interstate commerce. One law was the National Industrial Recovery Act (NRA - the Blue Eagle), which attempted to set health and safety standards for businesses. In Schechter Poultry Corp. v. United States (1935), the Court again sided with the state. The case involved a Brooklyn, New York chicken store, who was charged with selling an "unfit chicken" according to the NRA standards. The problem: Schechter only did business in New York, so the NRA statute didn't apply.

In the 1940s and proceeding into the civil rights era of the 1960s and 1970s, the Court's opinion began to change. In Wickard v. Filburn (1942), the Court ruled that even though Rosco Filburn, a wheat farmer, only grew and sold his wheat in one state, his action (exceeding the quota of the Agricultural Adjustment Act) affected interstate commerce because his wheat competed with wheat in other states. The Court ruled in favor of the United States.

In the 1960s, after the Civil Rights Act, the Interstate Commerce clause was found to include cases where, in one state, an act of racial discrimination was committed. The definition of interstate commerce, during the Rehnquist court, has been interpreted more restrictively, to favor state power. There is still ample room for interpretation of the Commerce Clause.

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