The Commerce Clause refers to Article 1, Section 8, Clause 3 of the U.S. Constitution, which gives Congress the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.”
The Constitution enumerates certain powers for the federal government; the Tenth Amendment provides that any powers that are not enumerated in the Constitution are reserved for the states. Congress has often used the Commerce Clause to justify exercising legislative power over the activities of states and their citizens, leading to significant and ongoing controversy regarding the balance of power between the federal government and the states.
The Commerce Clause has historically been viewed as both a grant of congressional authority and as a restriction on states’ powers to regulate. The “dormant” Commerce Clause refers to the prohibition, implied in the Commerce Clause, against states passing legislation that discriminates against or excessively burdens interstate commerce. The meaning of the word "commerce" is a source of much of the controversy. The Constitution does not explicitly define the word. Some argue that it refers simply to trade or exchange, while others claim that the founders intended to describe more broadly commercial and social intercourse between citizens of different states. Thus, the interpretation of "commerce" affects the appropriate dividing line between federal and state power.
The Commerce Clause has been used to justify the use of federal laws in matters that do not on their face implicate interstate trade or exchange. Early on, the Supreme Court ruled that the power to regulate interstate commerce encompassed the power to regulate interstate navigation. Gibbons v. Ogden, 22 U.S. 1 (1824). In 1905, the Court used the Commerce Clause to halt price fixing in the Chicago meat industry, when it ruled that Congress had authority to regulate the local meat market under the Sherman Anti-Trust Act. It found that business done even at a purely local level could become part of a continuous “current” of commerce that involved the interstate movement of goods and services. Swift and Company v. United States, 196 U.S. 375 (1905). Despite these decisions, the Commerce Clause could still effectively be used to limit the federal government’s power, as the early years of the New Deal demonstrated.
With the advent of the New Deal, the powers of the federal government expanded into realms—such as regulation of in-state industrial production and worker hours and wages—that would not necessarily be considered “commerce” under the definitions set forth in Gibbons and Swift. As a result, prior to 1937, the Court exercised its power to strike down New Deal legislation as applied to certain plaintiffs. It found in Schechter Poultry Corp. v. US that the National Industrial Recovery Act was unconstitutional as applied to a poultry seller who bought and sold chicken only within the state of New York. 295 U.S. 495 (1935). The Court also found the Bituminous Coal Conservation Act unconstitutional. Carter v. Carter Coal Corp., 298 U.S. 238 (1936). Following his reelection, President Roosevelt responded to these attacks on his legislation by proposing what is known as the “Court-packing plan,” which would have expanded the size of the Supreme Court from nine to up to fifteen justices. Although the plan was defeated and the composition of the Court soon changed, the proposal was credited with changing the Court’s view on New Deal legislation. Beginning with the landmark case of NLRB v. Jones & Laughlin Steel Corp., the Court recognized broader grounds upon which the Commerce Clause could be used to regulate state activity—most importantly, that activity was commerce if it had a “substantial economic effect” on interstate commerce or if the “cumulative effect” of one act could have an effect on such commerce. 301 U.S. 1 (1937).
The Civil Rights Act of 1964, which outlawed segregation and prohibited discrimination against African-Americans, was passed under the Commerce Clause in order to allow the federal government to charge non-state actors with Equal Protection violations, which it had been unable to do up to that point because of the Fourteenth Amendment’s limited application to state actors. The Supreme Court found that Congress had the authority to regulate a business that served mostly interstate travelers in Heart of Atlanta Motel v. United States. 379 U.S. 241 (1964). It also ruled that the federal civil rights legislation could be used to regulate a restaurant, Ollie’s Barbeque, a family-owned restaurant in Birmingham, Alabama because, although most of Ollie’s customers were local, the restaurant served food which had previously crossed state lines. Katzenbach v. McClung, 379 U.S. 274 (1964).
In 1995, the Rehnquist Court again restricted the interpretation of the Commerce Clause in Lopez v. United States. 514 U.S. 549 (1995). The defendant in this case was charged with carrying a handgun to school in violation of the federal Gun Free School Zones Act of 1990. The defendant argued that the federal government had no authority to regulate firearms in local schools, while the government claimed that this fell under the Commerce Clause since possession of a firearm in a school zone would lead to violent crime, thereby affecting general economic conditions. The Chief Justice rejected this argument, and held that Congress only has the power to regulate the channels of commerce, the instrumentalities of commerce, and action that substantially affects interstate commerce. He declined to further expand the Commerce Clause, writing that “[t]o do so would require us to conclude that the Constitution's enumeration of powers does not presuppose something not enumerated, and that there never will be a distinction between what is truly national and what is truly local. This we are unwilling to do.”
The federal government’s power was further restricted in the landmark case of Morrison v. United States, which overturned the Violence Against Women Act for its reliance on the Commerce Clause in making domestic violence against women a federal crime. 529 U.S. 598 (2000). Taken together, Lopez and Morrison have made clear that while the Court is still willing to recognize a broad interpretation of the Commerce Clause, if it does not find activity substantial enough to constitute interstate commerce it will not accept Congress's stated reason for federal regulation.