ArtI.S8.C3.2 Meaning of Commerce

Article I, Section 8, Clause 3:

[The Congress shall have Power . . . ] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; . . .

While the etymology of the word “commerce” suggests that “merchandise,” or goods for sale, was integral to its original meaning,1 Chief Justice John Marshall in Gibbons v. Ogden interpreted the Commerce Clause broadly.2 Gibbons concerned whether the New York legislature could grant a monopoly to Aaron Ogden to operate steamships on New York waters and thereby prevent Thomas Gibbons from operating a steamship between New York and New Jersey pursuant to a license granted by Congress.3 In defending his New York-granted steamship monopoly, Ogden argued that transporting passengers did not constitute “commerce” under the Commerce Clause. Finding New York’s grant of a steamship monopoly violated the Commerce Clause, Chief Justice Marshall reasoned that commerce encompassed not only buying and selling but also, more generally, intercourse and consequently navigation. The Chief Justice wrote:

The subject to be regulated is commerce. The counsel for the appellee would limit it to traffic, to buying and selling, or the interchange of commodities, and do not admit that it comprehends navigation. This would restrict a general term, applicable to many objects, to one of its significations. Commerce, undoubtedly, is traffic, but it is something more—it is intercourse.4

Marshall further noted the general understanding of the meaning of commerce, the Article I, Section 9 prohibition against Congress granting any preference “by any regulation of commerce or revenue, to the ports of one State over those of another,” and Congress’s power to impose embargoes.5

In Gibbons, Marshall qualified the word “intercourse” with the word “commercial,” thus retaining the element of monetary transactions.6 Initially, the Court viewed activities covered by Congress’s interstate commerce clause power narrowly. Thus, the Court held the Commerce Clause did not reach mining or manufacturing regardless of whether the product moved in interstate commerce;7 insurance transactions crossing state lines;8 and baseball exhibitions between professional teams traveling from state to state.9 Similarly, the Court held that the Commerce Clause did not apply to contracts to insert advertisements in periodicals in another state10 or to render personal services in another state.11

Later decisions treated the Commerce Clause more expansively. In 1945, the Court held in Associated Press v. United States that a press association gathering and transmitting news to client newspapers to be interstate commerce.12 Likewise, in 1943, the Court held in American Medical Association v. United States that activities of Group Health Association, Inc., which serve only its own members, are “trade” and capable of becoming interstate commerce.13 The Court also held insurance transactions between an insurer and insured in different states to be interstate commerce.14 Most importantly, the Court held that manufacturing,15 mining,16 business transactions,17 and the like, which occur antecedent or subsequent to a move across state lines, are part of an integrated commercial whole and covered by the Commerce Clause. As such, Supreme Court case law on the meaning of “commerce” in “interstate commerce” covers movements of persons and things, whether for profit or not, across state lines;18 communications; transmissions of intelligence, whether for commercial purposes or otherwise;19 and commercial negotiations that involve transportation of persons or things, or flows of services or power, across state lines.20

The Oxford English Dictionary: “com- together, with, + merx, merci- merchandise, ware.” back
22 U.S. (9 Wheat.) 1 (1824). back
Act of February 18, 1793, 1 Stat. 305, entitled “An Act for enrolling and licensing ships or vessels to be employed in the coasting trade and fisheries, and for regulating the same.” back
Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 189 (1824). back
Id. at 190–94. back
Id. at 193. back
Kidd v. Pearson, 128 U.S. 1 (1888); Oliver Iron Co. v. Lord, 262 U.S. 172 (1923); United States v. E. C. Knight Co., 156 U.S. 1 (1895); see also Carter v. Carter Coal Co., 298 U.S. 238 (1936). back
Paul v. Virginia, 75 U.S. (8 Wall.) 168 (1869); see also the cases to this effect cited in United States v. Se. Underwriters Ass’n, 322 U.S. 533, 543–545, 567–568, 578 (1944). back
Fed. Baseball League v. Nat’l League of Pro. Baseball Clubs, 259 U.S. 200 (1922). When pressed to reconsider its decision, the Court declined, noting that Congress had not seen fit to bring the business under the antitrust laws by legislation having prospective effect; that the business had developed under the understanding that it was not subject to these laws; and that reversal would have retroactive effect. Toolson v. N.Y. Yankees, 346 U.S. 356 (1953). In Flood v. Kuhn, 407 U.S. 258 (1972), the Court recognized these decisions as aberrations, but thought the doctrine was entitled to the benefits of stare decisis, as Congress was free to change it at any time. The same considerations not being present, the Court has held that businesses conducted on a multistate basis, but built around local exhibitions, are in commerce and subject to, inter alia, the antitrust laws, in the instance of professional football, Radovich v. Nat’l Football League, 352 U.S. 445 (1957), professional boxing, United States v. Int’l Boxing Club, 348 U.S. 236 (1955), and legitimate theatrical productions, United States v. Shubert, 348 U.S. 222 (1955). back
Blumenstock Bros. v. Curtis Publ’g Co., 252 U.S. 436 (1920). back
Williams v. Fears, 179 U.S. 270 (1900). See also Diamond Glue Co. v. U.S. Glue Co., 187 U.S. 611 (1903); Browning v. City of Waycross, 233 U.S. 16 (1914); General Ry. Signal Co. v. Virginia, 246 U.S. 500 (1918). But see York Mfg. Co. v. Colley, 247 U.S. 21 (1918). back
Associated Press v. United States, 326 U.S. 1 (1945). back
Am. Med. Ass’n v. United States, 317 U.S. 519 (1943). Cf. United States v. Or. Med. Society, 343 U.S. 326 (1952). back
United States v. Se. Underwriters Ass’n, 322 U.S. 533 (1944). back
NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937). back
Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381 (1940). See also Hodel v. Va. Surface Mining and Reclamation Ass’n, 452 U.S. 264, 275–283 (1981); Mulford v. Smith, 307 U.S. 38 (1939) (agricultural production). back
Swift & Co. v. United States, 196 U.S. 375 (1905); Stafford v. Wallace, 258 U.S. 495 (1922); Chi. Bd. of Trade v. Olsen, 262 U.S. 1 (1923). back
In many later formulations, crossing of state lines is no longer the sine qua non; wholly intrastate transactions with substantial effects on interstate commerce may suffice. back
E.g., United States v. Simpson, 252 U.S. 465 (1920); Caminetti v. United States, 242 U.S. 470 (1917). back
The Court stated: “Not only, then, may transactions be commerce though non-commercial; they may be commerce though illegal and sporadic, and though they do not utilize common carriers or concern the flow of anything more tangible than electrons and information.” United States v. Se. Underwriters Ass’n, 322 U.S. 533, 549–50 (1944). back