Is There an Intrastate Barrier to Congress’s Commerce Power?.

Not only has there been legislative advancement and ju- dicial acquiescence in Commerce Clause jurisprudence, but the melding of the Nation into one economic union has been more than a little responsible for the reach of Congress’s power. “The volume of interstate commerce and the range of commonly accepted objects of government regulation have . . . expanded considerably in the last 200 years, and the regulatory authority of Congress has expanded along with them. As interstate commerce has become ubiquitous, activities once considered purely local have come to have effects on the national economy, and have accordingly come within the scope of Congress’s commerce power.”889

Congress’s commerce power has been characterized as having three, or sometimes four, interrelated principles of decision, some old, some of recent vintage. The Court in 1995 described “three broad categories of activity that Congress may regulate under its commerce power. First, Congress may regulate the use of the channels of interstate commerce. Second, Congress is empowered to regulate and protect the instrumentalities of interstate commerce, or persons or things in interstate commerce, even though the threat may come only from intrastate activities. Finally, Congress’s commerce authority includes the power to regulate those activities having a substantial relation to interstate commerce, i.e., those activities that substantially affect interstate commerce.”890

An example of the first category, regulating to protect the channels and instrumentalities of interstate commerce, is Pierce County v. Guillen,891 in which the Court upheld a prohibition on the use in state or federal court proceedings of highway data required to be collected by states on the basis that “Congress could reasonably believe that adopting a measure eliminating an unforeseen side effect of the information-gathering requirement . . . would result in more diligent efforts [by states] to collect the relevant information.”

Under the second category, which attaches to instrumentalities

892 and persons crossing of state lines, Congress has validly legislated to protect interstate travelers from harm, to prevent such travelers from being deterred in the exercise of interstate traveling, and to prevent them from being burdened. Many of the 1964 public accommodations law applications have been premised on the point that larger establishments do serve interstate travelers and that even small stores, restaurants, and the like may serve interstate travelers, and, therefore, it is permissible to regulate them to prevent or deter racial discrimination.893

Commerce regulation under this second category is not limited to persons who cross state lines but can also extend to an object that will or has crossed state lines, and the regulation of a purely intrastate activity may be premised on the presence of such object. Thus, the public accommodations law reached small establishments that served food and other items that had been purchased from interstate channels.894 Congress has validly penalized convicted felons, who had no other connection to interstate commerce, for possession or receipt of firearms, which had been previously transported in interstate commerce independently of any activity by the two felons.895

This reach is not of recent origin. In United States v. Sullivan,896 the Court sustained a conviction of misbranding under the Federal Food, Drug and Cosmetic Act. Sullivan, a Columbus, Georgia druggist, had bought a properly labeled 1000-tablet bottle of sulfathiazole from an Atlanta wholesaler. The bottle had been shipped to the Atlanta wholesaler by a Chicago supplier six months earlier. Three months after Sullivan received the bottle, he made two retail sales of 12 tablets each, placing the tablets in boxes not labeled in strict accordance with the law. Upholding the conviction, the Court concluded that there was no question of “the constitutional power of Congress under the Commerce Clause to regulate the branding of articles that have completed an interstate shipment and are being held for future sales in purely local or intrastate commerce.”897

Under the third category, Congress’s power reaches not only transactions or actions that occasion the crossing of state or national boundaries but extends as well to activities that, though local, “affect” commerce; this power derives from the Commerce Clause enhanced by the Necessary and Proper Clause. The seminal case, of course, is Wickard v. Filburn,898 sustaining federal regulation of a crop of wheat grown on a farm and intended solely for home consumption. The premise was that if it were never marketed, it supplied a need otherwise to be satisfied only in the market, and that if prices rose it might be induced onto the market. “Even activity that is purely intrastate in character may be regulated by Congress, where the activity, combined with like conduct by others similarly situated, affects commerce among the States or with foreign nations.”899 Coverage under federal labor and wage-and-hour laws after the 1930s showed the reality of this doctrine.900

In upholding federal regulation of strip mining, the Court demonstrated the breadth of the “affects” standard. One case dealt with statutory provisions designed to preserve “prime farmland.” The trial court had determined that the amount of such land disturbed annually amounted to 0.006% of the total prime farmland acreage in the Nation and, thus, that the impact on commerce was “infinitesimal” or “trivial.” Disagreeing, the Court said: “A court may invalidate legislation enacted under the Commerce Clause only if it is clear that there is no rational basis for a congressional finding that the regulated activity affects interstate commerce, or that there is no reasonable connection between the regulatory means selected and the asserted ends.”901 Moreover, “[t]he pertinent inquiry therefore is not how much commerce is involved but whether Congress could rationally conclude that the regulated activity affects interstate commerce.”902

In a companion case, the Court reiterated that “[t]he denomination of an activity as a ‘local’ or ‘intrastate’ activity does not resolve the question whether Congress may regulate it under the Commerce Clause. As previously noted, the commerce power ‘extends to those activities intrastate which so affect interstate commerce, or the exertion of the power of Congress over it, as to make regulation of them appropriate means to the attainment of a legitimate end, the effective execution of the granted power to regulate interstate commerce.’ ”903 Judicial review is narrow. Congress’s determination of an “effect” must be deferred to if it is rational, and Congress must have acted reasonably in choosing the means.904

Fourth, a still more potent engine of regulation has been the expansion of the class-of-activities standard, which began in the “affecting” cases. In Perez v. United States,905 the Court sustained the application of a federal “loan-sharking” law to a local culprit. The Court held that, although individual loan-sharking activities might be intrastate in nature, still it was within Congress’s power to determine that the activity was within a class the activities of which did affect interstate commerce, thus affording Congress the opportunity to regulate the entire class. Although the Perez Court and the congressional findings emphasized that loan-sharking was generally part of organized crime operating on a national scale and that loan-sharking was commonly used to finance organized crime’s national operations, subsequent cases do not depend upon a defensible assumption of relatedness in the class.

Thus, the Court applied the federal arson statute to the attempted “torching” of a defendant’s two-unit apartment building. The Court merely pointed to the fact that the rental of real estate “unquestionably” affects interstate commerce and that “the local rental of an apartment unit is merely an element of a much broader commercial market in real estate.”906 The apparent test of whether aggregation of local activity can be said to affect commerce was made clear next in an antitrust context.907

In a case allowing the continuation of an antitrust suit challenging a hospital’s exclusion of a surgeon from practice in the hospital, the Court observed that in order to establish the required jurisdictional nexus with commerce, the appropriate focus is not on the actual effects of the conspiracy but instead is on the possible consequences for the affected market if the conspiracy is successful. The required nexus in this case was sufficient because competitive significance is to be measured by a general evaluation of the impact of the restraint on other participants and potential participants in the market from which the surgeon was being excluded.908

Footnotes

889
New York v. United States, 505 U.S. 144, 158 (1992). [Back to text]
890
United States v. Lopez, 514 U.S. 549, 558–59 (1995) (citations omitted). [Back to text]
891
537 U.S. 129, 147 (2003). [Back to text]
892
Examples of laws addressing instrumentalities of commerce include prohibitions on the destruction of an aircraft, 18 U.S.C. § 32, or on theft from interstate shipments. Accord Perez v. United States, 402 U.S. 146, 150 (1971). [Back to text]
893
Heart of Atlanta Motel v. United States, 379 U.S. 241 (1964); Katzenbach v. McClung, 379 U.S. 294 (1964); Daniel v. Paul, 395 U.S. 298 (1969). [Back to text]
894
Katzenbach v. McClung, 379 U.S. 294, 298, 300–02 (1964); Daniel v. Paul, 395 U.S. 298, 305 (1969). [Back to text]
895
Scarborough v. United States, 431 U.S. 563 (1977); Barrett v. United States, 423 U.S. 212 (1976). However, because such laws reach far into the traditional police powers of the states, the Court insists Congress clearly speak to its intent to cover such local activities. United States v. Bass, 404 U.S. 336 (1971). See also Rewis v. United States, 401 U.S. 808 (1971); United States v. Enmons, 410 U.S. 396 (1973). A similar tenet of construction has appeared in the Court’s recent treatment of federal prosecutions of state officers for official corruption under criminal laws of general applicability. E.g., McDonnell v. United States, 579 U.S. ___, No. 15–474, slip op. at 24 (2016) (narrowly interpreting the term “official act” to avoid a construction of the Hobbs Act and federal honest-services fraud statute that would “raise[] significant federalism concerns” by intruding on a state’s “prerogative to regulate the permissible scope of interactions between state officials and their constituents.”); McCormick v. United States, 500 U.S. 257 (1991); McNally v. United States, 483 U.S. 350 (1987). Congress has overturned the latter case. 102 Stat. 4508, § 7603, 18 U.S.C. § 1346. [Back to text]
896
332 U.S. 689 (1948). [Back to text]
897
332 U.S. at 698–99. [Back to text]
898
317 U.S. 111 (1942). [Back to text]
899
Fry v. United States, 421 U.S. 542, 547 (1975). [Back to text]
900
See Maryland v. Wirtz, 392 U.S. 183, 188–93 (1968). [Back to text]
901
Hodel v. Indiana, 452 U.S. 314, 323–24 (1981). [Back to text]
902
452 U.S. at 324. [Back to text]
903
Hodel v. Virginia Surface Mining & Recl. Ass’n, 452 U.S. 264 (1981) (quoting United States v. Wrightwood Dairy Co., 315 U.S. 110, 119 (1942)). [Back to text]
904
452 U.S. at 276, 277. The scope of review is restated in Preseault v. ICC, 494 U.S. 1, 17 (1990). Then-Justice Rehnquist, concurring in the two Hodel cases, objected that the Court was making it appear that no constitutional limits existed under the Commerce Clause, whereas in fact it was necessary that a regulated activity must have a substantial effect on interstate commerce, not just some effect. He thought it a close case that the statutory provisions here met those tests. 452 U.S. at 307–13. [Back to text]
905
402 U.S. 146 (1971). [Back to text]
906
Russell v. United States, 471 U.S. 858, 862 (1985). In a later case the Court avoided the constitutional issue by holding the statute inapplicable to the arson of an owner-occupied private residence. [Back to text]
907
Summit Health, Ltd. v. Pinhas, 500 U.S. 322 (1991). See also Jones v. United States, 529 U.S. 848 (2000) (an owner-occupied building is not “used” in interstate commerce within the meaning of the federal arson statute). [Back to text]
908
500 U.S. at 330–32. The decision was 5-to-4, with the dissenters of the view that, although Congress could reach the activity, it had not done so. [Back to text]