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CRS Annotated Constitution

CRS Annotated Constitution

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THE COMMERCE CLAUSE AS A RESTRAINT ON STATE POWERS

Doctrinal Background

The grant of power to Congress over commerce, unlike that of power to levy customs duties, the power to raise armies, and some others, is unaccompanied by correlative restrictions on state power.840 This circumstance does not, however, of itself signify[p.210]that the States were expected to participate in the power thus granted Congress, subject only to the operation of the supremacy clause. As Hamilton pointed out in The Federalist,841 while some of the powers which are vested in the National Government admit of their “concurrent” exercise by the States, others are of their very nature “exclusive,” and hence render the notion of a like power in the States “contradictory and repugnant.” As an example of the latter kind of power, Hamilton mentioned the power of Congress to pass a uniform naturalization law. Was the same principle expected to apply to the power over foreign and interstate commerce?

Unquestionably one of the great advantages anticipated from the grant to Congress of power over commerce was that state interferences with trade, which had become a source of sharp discontent under the Articles of Confederation, would be thereby brought to an end. As Webster stated in his argument for appellant in Gibbons v. Ogden: “The prevailing motive was to regulate commerce; to rescue it from the embarrassing and destructive consequences, resulting from the legislation of so many different States, and to place it under the protection of a uniform law.”842 In other words, the constitutional grant was itself a regulation of commerce in the interest of uniformity.843

That, however, the commerce clause, unimplemented by congressional legislation, took from the States any and all power over foreign and interstate commerce was by no means conceded and[p.211]was, indeed, counterintuitive, considering the extent of state regulation that previously existed before the Constitution.844 Moreover, legislation by Congress regulative of any particular phase of commerce would raise the question whether the States were entitled to fill the remaining gaps, if not by virtue of a “concurrent” power over interstate and foreign commerce, then by virtue of “that immense mass of legislation” as Marshall termed it, “which embraces everything within the territory of a State, not surrendered to the general government,”845 in a word, the “police power.”

The text and drafting record of the commerce clause fails, therefore, without more ado, to settle the question of what power is left to the States to adopt legislation regulating foreign or interstate commerce in greater or lesser measure. To be sure, in cases of flat conflict between an act or acts of Congress regulative of such commerce and a state legislative act or acts, from whatever state power ensuing, the act of Congress is today recognized, and was recognized by Marshall, as enjoying an unquestionable supremacy.846 But suppose, first, that Congress has passed no act, or second, that its legislation does not clearly cover the ground traversed by previously enacted state legislation. What rules then apply? Since Gibbons v. Ogden, both of these situations have confronted the Court, especially as regards interstate commerce, hundreds of times, and in meeting them the Court has, first, determined that it has power to decide when state power is validly exercised, and, second, it has coined or given currency to numerous formulas, some of which still guide, even when they do not govern, its judgment.847

[p.212]

Thus, it has been judicially established that the commerce clause is not only a “positive” grant of power to Congress, but it is also a “negative” constraint upon the States; that is, the doctrine of the “dormant” commerce clause, though what is dormant is the congressional exercise of the power, not the clause itself, under which the Court may police state taxation and regulation of interstate commerce, became well established.

Webster, in Gibbons, argued that a state grant of a monopoly to operate steamships between New York and New Jersey not only contravened federal navigation laws but violated the commerce clause as well, because that clause conferred an exclusive power upon Congress to make the rules for national commerce, although he conceded that, the grant to regulate interstate commerce was so broad as to reach much that the States had formerly had jurisdiction over, the courts must be reasonable in interpretation.848 But because he thought the state law was in conflict with the federal legislation, Chief Justice Marshall was not compelled to pass on Webster’s arguments, although in dicta he indicated his considerable sympathy with them and suggested that the power to regulate commerce between the States might be an exclusively federal power.849

Chief Justice Marshall originated the concept of the “dormant commerce clause” in Willson v. Black Bird Creek Marsh Co.,850 although in dicta. Attacked before the Court was a state law authorizing the building of a dam across a navigable creek, and it was claimed the law was in conflict with the federal power to regulate interstate commerce. Rejecting the challenge, Marshall said that the state act could not be “considered as repugnant to the [federal] power to regulate commerce in its dormant state[.]”

Returning to the subject in Cooley v. Board of Wardens of Port of Philadelphia,851 the Court, upholding a state law that required ships to engage a local pilot when entering or leaving the port of[p.213]Philadelphia, enunciated a doctrine of partial federal exclusivity. According to Justice Curtis’ opinion, the state act was valid on the basis of a distinction between those subjects of commerce which “imperatively demand a single uniform rule” operating throughout the country and those which “as imperatively” demand “that diversity which alone can meet the local necessities of navigation,” that is to say, of commerce. As to the former, the Court held Congress’ power to be “exclusive,” as to the latter, it held that the States enjoyed a power of “concurrent legislation.”852 The Philadelphia pilotage requirement was of the latter kind.

Thus, the contention that the federal power to regulate interstate commerce was exclusive of state power yielded to a rule of partial exclusivity. Among the welter of such cases, the first actually to strike down a state law solely on commerce clause grounds was the State Freight Tax Case.853 The question before the Court was the validity of a nondiscriminatory854 statute that required every company transporting freight within the State, with certain exceptions, to pay a tax at specified rates on each ton of freight carried by it. Opining that a tax upon freight, or any other article of commerce, transported from State to State is a regulation of commerce among the States and, further, that the transportation of merchandise or passengers through a State or from State to State was a subject that required uniform regulation, the Court held the tax in issue to be repugnant to the commerce clause.

[p.214]

Whether exclusive or partially exclusive, however, the commerce clause as a restraint upon state exercises of power, absent congressional action, received no sustained justification or explanation; the clause, of course, empowers Congress to regulate commerce among the States, not the courts. Often, as in Cooley, and later cases, the Court stated or implied that the rule was imposed by the commerce clause.855 In Welton v. Missouri,856 the Court attempted to suggest a somewhat different justification. Challenged was a state statute that required a “peddler’s” license for merchants selling goods that came from other states but that required no license if the goods were produced in the State. Declaring that uniformity of commercial regulation is necessary to protect articles of commerce from hostile legislation and thus the power asserted by the State belonged exclusively to Congress, the Court observed that “[t]he fact that Congress has not seen fit to prescribe any specific rules to govern inter–State commerce does not affect the question. Its inaction on this subject . . . is equivalent to a declaration that inter–State commerce shall be free and untrammelled.”857

It has been evidently of little importance to the Court to explain. “Whether or not this long recognized distribution of power between the national and state governments is predicated upon the implications of the commerce clause itself . . . or upon the presumed intention of Congress, where Congress has not spoken . . . the result is the same.”858 Thus, “[f]or a hundred years it has been accepted constitutional doctrine . . . that . . . where Congress has[p.215]not acted, this Court, and not the state legislature, is under the commerce clause the final arbiter of the competing demands of state and national interests.”859

Two other justifications can be found throughout the Court’s decisions, but they do not explain why the Court is empowered under a grant of power to Congress to police state regulatory and taxing decisions. For example, in Welton v. Missouri,860 the statute under review, as observed several times by the Court, was clearly discriminatory as between instate and interstate commerce, but that point was not sharply drawn as the constitutional fault of the law. That the commerce clause had been motivated by the Framers’ apprehensions about state protectionism has been frequently noted.861 A relatively recent theme is that the Framers desired to create a national area of free trade, so that unreasonable burdens on interstate commerce violate the clause in and of themselves.862

Nonetheless, the power of the Court is established and is freely exercised. No reservations can be discerned in the opinions for the Court.863 Individual Justices, to be sure, have urged renunciation of the power and remission to Congress for relief sought by litigants.864 That has not been the course followed.

Footnotes
840 Thus, by Article I, Sec. 10, cl. 2, States are denied the power to “lay any Imposts or Duties on Imports or Exports” except by the consent of Congress. The clause applies only to goods imported from or exported to another country, not from or to another State, Woodruff v. Parham, 8 Wall. (75 U.S.) 123 (1869), which prevents its application to interstate commerce, although Chief Justice Marshall thought to the contrary, Brown v. Maryland, 12 Wheat. (25 U.S.) 419, 449 (1827), and the contrary has been strongly argued. W. Crosskey, Politics and the Constitution in the History of the United States 295–323 (1953).
841 The Federalist No. 32 (J. Cooke ed. 1961), 199–203. Note that in connection with the discussion that follows, Hamilton avowed that the taxing power of the States, save for imposts or duties on imports or exports, “remains undiminished.” Id, 201. The States “retain [the taxing] authority in the most absolute and unqualified sense[.]” Id., 199.
842 9 Wheat. (22 U.S.) 1, 11 (1824). Justice Johnson’s assertion, concurring, was to the same effect. Id., 226. Late in life, James Madison stated that the power had been granted Congress mainly as “a negative and preventive provision against injustice among the States.” 4 Letters and Other Writings of James Madison (Philadelphia: 1865), 14–15.
843 It was evident from The Federalist that the principal aim of the commerce clause was the protection of the national market from the oppressive power of individual States acting to stifle or curb commerce. Id., No. 7, 39–41 (Hamilton); No. 11, 65–73 (Hamilton); No. 22, 135–137 (Hamilton); No. 42, 283–284 (Madison); No. 53, 362–364 (Madison). See H. P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 533 (1949). For a comprehensive history of the adoption of the commerce clause, which does not indicate a definitive answer to the question posed, see Abel, The Commerce Clause in the Constitutional Convention and in Contemporary Comment, 25Minn. L. Rev.432 (1941). Professor Abel discovered only nine references in the Convention records to the commerce clause, all directed to the dangers of interstate rivalry and retaliation. Id., 470–471 & nn. 169–175.
844 The strongest suggestion of exclusivity found in the Convention debates is a remark by Madison. “Whether the States are now restrained from laying tonnage duties depends on the extent of the power ‘to regulate commerce.’ These terms are vague but seem to exclude this power of the States.” 2 M. Farrand, The Records of the Federal Convention of 1787 (New Haven: rev. ed. 1937), 625. However, the statement is recorded during debate on the clause, Art. I, Sec. 10, cl. 3, prohibiting States from laying tonnage duties. That the Convention adopted this clause, when tonnage duties would certainly be one facet of regulating interstate and foreign commerce, casts doubt on the assumption that the commerce power itself was intended to be exclusive.
845 Gibbons v. Ogden, 9 Wheat. (22 U.S.) 1, 203 (1824).
846 Id., 210–211.
847 The writings detailing the history are voluminous. See, e.g., F. Frankfurter, The Commerce Clause under Marshall, Taney and White (1937); B. Gavit, The Commerce Clause of the United States Constitution (1932) (usefully containing appendices cataloguing every commerce clause decision of the Supreme Court to that time); Sholleys, The Negative Implications of the Commerce Clause, 3U. Chi. L. Rev.556 (1936). Among the recent writings, see Sedler, The Negative Commerce Clause as a Restriction on State Regulation and Taxation: An Analysis in Terms of Constitutional Structure, 31Wayne L. Rev.885 (1985) (a disputed conceptualization arguing the Court followed a consistent line over the years), and articles cited, id., 887 n. 4.
848 Id., 9 Wheat. (22 U.S.), 13–14, 16.
849 Id., 17–18, 209. In Sturges v. Crowninshield, 4 Wheat. (17 U.S.) 122, 193–196 (1819), Chief Justice Marshall denied that the grant of the bankruptcy power to Congress was exclusive. See also Houston v. Moore, 5 Wheat. (18 U.S.) 1 (1820) (militia).
850 2 Pet. (27 U.S.) 245, 252 (1829).
851 12 How. (53 U.S.) 299 (1851). The issue of exclusive federal power and the separate issue of the dormant commerce clause was present in the License Cases, 5 How. (46 U.S.) 504 (1847), and the Passenger Cases, 7 How. (48 U.S.) 283 (1849), but, despite the fact that much ink was shed in multiple opinions discussing the questions, nothing definitive emerged. Chief Justice Taney, in contrast to Marshall, viewed the clause only as a grant of power to Congress, containing no constraint upon the States, and the Court’s role was to void state laws in contravention of federal legislation. Id., 5 How. (46 U.S.), 573; Id., 7 How. (48 U.S.), 464.
852 Id., 317–320. Chief Justice Taney had formerly taken the strong position that Congress’ power over commerce was not exclusive, supra, n. 10, but he acquiesced silently in the Cooley opinion. A modern echo of Cooley is Ray v. Atlantic Richfield Co., 435 U.S. 151, 179–180 (1978), in which the Court, inter alia, sustained a state requirement that vessels not satisfying certain design requirements be escorted by tugboats in Puget Sound. Noting the requirement’s similarity “to a local pilotage requirement,” the Court, following Cooley, pronounced it “not the type of regulation that demands a uniform, national rule.” But, in an apparent departure from Cooley, the Court also observed that it did not appear that “the requirement impedes the free and efficient flow of interstate and foreign commerce. . . .” See also Goldstein v. California, 412 U.S. 546, 552–560 (1973), in which, in the context of the copyright clause, the Court, approving Cooley for commerce clause purposes, refused to find the copyright clause either fully or partially exclusive.
853 Reading Railroad v. Pennsylvania, 15 Wall. (82 U.S.) 232 (1873). For cases in which the commerce clause basis was intermixed with other express or implied powers, see Crandall v. Nevada, 6 Wall. (73 U.S.) 35 (1868); Steamship Co. v. Portwardens, 6 Wall. (73 U.S.) 31 (1867); Woodruff v. Parham, 8 Wall. (75 U.S.) 123 (1868). Chief Justice Marshall, in Brown v. Maryland, 12 Wheat. (25 U.S.) 419, 488–489 (1827), indicated, in dicta, that a state tax might violate the commerce clause.
854 Just a few years earlier, the Court, in an opinion that merged commerce clause and import–export clause analyses, had seemed to suggest that it was a discriminatory tax or law that violates the commerce clause and not simply a tax on interstate commerce. Woodruff v. Parham, 8 Wall. (75 U.S.) 123 (1869).
855 “Where the subject matter requires a uniform system as between the States, the power controlling it is vested exclusively in Congress, and cannot be encroached upon by the State.” Leisy v. Hardin, 135 U.S. 100, 108–109 (1890). The commerce clause “remains in the Constitution as a grant of power to Congress . . . and as a diminution pro tanto of absolute state sovereignty over the same subject matter.” Carter v. Virginia, 321 U.S. 131, 137 (1944). The commerce clause, the Court has celebrated, “does not say what the states may or may not do in the absence of congressional action, nor how to draw the line between what is and what is not commerce among the states. Perhaps even more than by interpretation of its written word, this Court has advanced the solidarity and prosperity of this Nation by the meaning it has given these great silences of the Constitution.” H. P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 534–535 (1949). More recently, the Court has taken to stating that “[t]he Commerce Clause ‘has long been recognized as a self–executing limitation on the power of the States to enact laws imposing substantial burdens on such commerce.”’ Dennis v. Higgins, 498 U.S. 439, 447 (1991) (quoting South–Central Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 87 (1984) (emphasis supplied).
856 91 U.S. 275 (1875).
857 Id., 282. In Steamship Co. v. Portwardens, 6 Wall. (73 U.S.) 31, 33 (1867), the Court stated that congressional silence with regard to matters of “local” concern, imported willingness that the States regulate. Cf. Graves v. New York ex rel. O’Keefe, 306 U.S. 466, 479 n. 1 (1939)Justice Stone). The fullest development of the “silence” rationale was not by the Court but by a renowned academic, Professor Dowling. Interstate Commerce and State Power, 29Va. L. Rev.1 (1940); Interstate Commerce and State Power—Revisited Version, 47 Colum. L. Rev. 546 (1947).
858 Southern Pacific Co. v. Arizona, 325 U.S. 761, 768 (1945).
859 Id., 769. See also California v. Zook, 336 U.S. 725, 728 (1949).
860 91 U.S. 275, 277, 278, 279, 280, 281, 282 (1876).
861 Id., 280–281; Brown v. Maryland, 12 Wheat. (25 U.S.) 419, 446 (1827) (Chief Justice Marshall); Guy v. City of Baltimore, 100 U.S. 434, 440 (1879); Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 550, 552 (1935); Maryland v. Louisiana, 451 U.S. 725, 754 (1981).
862 E.g., Gwin, White & Prince, Inc. v. Henneford, 305 U.S. 434, 440 (1939); McLeod v. J. E. Dilworth Co., 322 U.S. 327, 330–331 (1944); Freeman v. Hewitt, 329 U.S. 249, 252, 256 (1946); H. P. Hood & Sons v. Du Mond, 336 U.S. 525, 538, 539 (1949); Dennis v. Higgins, 498 U.S. 439, 447–450 (1991). “[W]e have steadfastly adhered to the central tenet that the Commerce Clause ‘by its own force created an area of trade free from interference by the States.”’ American Trucking Assns., Inc. v. Scheiner, 483 U.S. 266, 280 (1987) (quoting Boston Stock Exchange v. State Tax Comm., 429 U.S. 318, 328 (1977)).
863 E.g., Fort Gratiot Sanitary Landfill, Inc. v. Michigan Natural Resources Dept., 112 S.Ct. 2019, 2023–2024 (1992); Quill Corp. v. North Dakota ex rel. Heitkamp, 112S.Ct.1904,1911 (1992); Wyoming v. Oklahoma, 112 S.Ct. 789, 800–801 (1992). Indeed, the Court, in Dennis v. Higgins, 498 U.S. 439, 447–450 (1991), broadened its construction of the clause, holding that it confers a “right” upon individuals and companies to engage in interstate trade. With respect to the exercise of the power, the Court has recognized Congress’ greater expertise to act and noted its hesitancy to impose uniformity on state taxation. Moorman Mfg. Co. v. Bair, 437 U.S. 267, 280 (1978). Cf. Quill Corp. supra, 1916.
864 In McCarroll v. Dixie Lines, 309 U.S. 176, 183 (1940), Justice Black, for himself and Justices Frankfurter and Douglas, dissented, taking precisely this view. See also Adams Mfg. Co. v. Storen, 304 U.S. 307, 316 (1938) (Justice Black dissenting in part); Gwin, White & Prince, Inc. v. Henneford, 305 U.S. 434, 442 (1939) (Justice Black dissenting); Southern Pacific Co. v. Arizona, 325 U.S. 761, 784 (1945) (Justice Black dissenting); id., 795 (Justice Douglas dissenting). Justices Douglas and Frankfurter subsequently wrote and joined opinions applying the dormant commerce clause. In Michigan– Wisconsin Pipe Line Co. v. Calvert, 347 U.S. 157, 166 (1954), the Court rejected the urging that it uphold all not–patently discriminatory taxes and let Congress deal with conflicts. More recently, Justice Scalia has taken the view that, as a matter of original intent, a “dormant” or “negative” commerce power cannot be justified in either taxation or regulation cases, but, yielding to the force of precedent, he will vote to strike down state actions that discriminate against interstate commerce or that are governed by the Court’s precedents, without extending any of those precedents. CTS Corp. v. Dynamics Corp. of America, 481 U.S. 69, 94 (1987) (concurring); Tyler Pipe Industries, Inc. v. Washington State Dept. of Revenue, 483 U.S. 232, 259 (1987) (concurring in part and dissenting in part); Bendix Autolite Corp. v. Midwesco Enterprises, Inc., 486 U.S. 888, 895 (1988) (concurring in judgment); American Trucking Assn., inc. v. Smith, 496 U.S. 167, 200 (1990) (concurring).

Supplement: [Pp. 215–16, add to n.864:]

Itel Containers Int’l Corp. v. Huddleston, 507 U.S. 60, 78 (1993) (Justice Scalia concurring) (reiterating view); Oklahoma Tax Comm’n v. Jefferson Lines, Inc., 514 U.S. 175, 200–01 (1995) (Justice Scalia, with Justice Thomas joining) (same). Justice Thomas has written an extensive opinion rejecting both the historical and jurisprudential basis of the dormant Commerce Clause and expressing a preference for reliance on the Imports–Exports Clause. Camps Newfound/ Owatonna, Inc. v. Town of Harrison, 520 U.S. 564, 609 (1997) (dissenting; joined by Justice Scalia entirely and by Chief Justice Rehnquist as to the Commerce Clause but not the Imports–Exports Clause).

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