Eleanor Finch
The Commerce Clause, found in Article I, Section 8, Clause 3 of the United States Constitution, grants Congress the power to regulate commerce with foreign nations, among the states, and with Indian tribes. This clause has been the subject of much debate and interpretation by courts, with some arguing that it gives Congress broad powers to regulate almost all aspects of commerce, while others seek to limit its scope and preserve state autonomy. The Commerce Clause has been used to address issues such as trade barriers, health insurance mandates, and railroad rates, and its interpretation has evolved over time as the nation's economy has become more integrated and globalized.
| Characteristics | Values |
|---|---|
| Name | Commerce Clause |
| Location | Article I, Section 8, Clause 3 |
| Purpose | To empower Congress to address problems among the several states that the states are separately unable to deal with effectively |
| Powers | To regulate commerce with foreign nations, among the several states, and with Indian tribes |
| Interpretation | The Supreme Court has generally taken a broad interpretation of the clause, but there is debate over the meaning of "commerce" and the extent of Congress's power |
| Limitations | The Court has ruled that Congress can only regulate the channels of commerce, the instrumentalities of commerce, and action that substantially affects interstate commerce |
| Impact | The Commerce Clause has been used to strike down state laws that impede interstate commerce, such as in Wabash v. Illinois and West Lynn Creamery Inc. v. Healy |
| Related Concepts | Necessary and Proper Clause, Dormant Commerce Clause |
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What You'll Learn
The Commerce Clause
However, the Supreme Court has also placed limits on the Commerce Clause. In U.S. v. Lopez (1995) and U.S. v. Morrison (2000), the Court confined Congress's regulatory authority to intrastate economic activity. The Court has also held that Congress can only regulate the channels of commerce, the instrumentalities of commerce, and actions that substantially affect interstate commerce.
The Dormant Commerce Clause is an important aspect of the Commerce Clause, prohibiting states from passing legislation that discriminates against or excessively burdens interstate commerce. This includes preventing protectionist state policies that favour in-state citizens or businesses over non-citizens conducting business within the state.
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Interstate Commerce Act
The Interstate Commerce Act was passed on February 4, 1887, by both the Senate and the House. The Act created the first independent regulatory agency in the US, the Interstate Commerce Commission (ICC), to oversee the conduct of the railroad industry. The ICC was empowered to investigate and prosecute railroads and other transportation companies alleged to have violated the Act.
The Interstate Commerce Act was passed in response to public anger over unfair railroad rates. Small businesses and farmers protested that the railroads charged them higher rates than larger corporations, and that the railroads were also setting higher rates for short hauls than for long-distance hauls. The Act required "just and reasonable" rate changes, prohibited special rates or rebates for individual shippers, and forbade long-haul/short-haul discrimination. It also prohibited "preference" in rates for any particular localities, shippers, or products, and the pooling of traffic or markets.
The Act was the first instance of federal regulation of an industry, and it established a five-member enforcement board, the ICC. The most successful provisions of the law were the requirement that railroads submit annual reports to the ICC and the ban on special rates that railroads would arrange among themselves.
The ICC's jurisdiction was limited to companies that operated across state lines, and over time, the courts narrowed the agency's authority further. In 1903, Congress established the Department of Commerce and Labor and its Bureau of Corporations to study and report on wider industries and their monopolistic practices. By 1906, the Supreme Court had ruled in favor of railroad companies in fifteen out of sixteen cases over which it presided.
The Interstate Commerce Act was amended several times in the 20th century. In 1935, Congress passed the Motor Carrier Act, which amended the Act to regulate bus lines and trucking as common carriers. Congress passed railroad deregulation measures in the 1970s and 1980s, and in 1995, Congress abolished the ICC, transferring its remaining functions to the Surface Transportation Board.
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Gibbons v. Ogden
The Gibbons v. Ogden case of 1824 was a landmark decision by the United States Supreme Court, which forbade states from enacting legislation that would interfere with Congress's right to regulate commerce among the separate states.
The case centred around a dispute between Thomas Gibbons and Aaron Ogden, who were competing in steamboat navigation. Gibbons had permission from the federal government to use the waterways, while Ogden had a license from the State of New York to navigate between New York City and the New Jersey coast. When the State of New York denied Gibbons access to the New York Bay, he sued Ogden.
The Supreme Court, led by Chief Justice Marshall, ruled in favour of Gibbons, interpreting the Constitution as granting Congress the power to regulate interstate commerce, and that federal law took precedence over state laws. This decision upheld the nationalist definition of federal power and expanded Congress's authority over the nation's economic life.
The Gibbons v. Ogden case is significant as it clarified the role of the federal government in regulating commerce and set a precedent for future cases involving the interpretation of the Commerce Clause of the Constitution. It demonstrated the Court's commitment to upholding the original intent of the Constitution and ensuring a consistent regulatory environment for interstate commerce.
Furthermore, the case highlighted the importance of new technologies, such as steamboat navigation, and their impact on commerce and state and federal laws. The decision also had implications for the regulation of other emerging industries, ensuring that federal law would take precedence and prevent states from creating monopolies or protectionist policies that could hinder interstate commerce.
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Foreign Commerce Clause
The Foreign Commerce Clause, also known as the Commerce Clause, is outlined in Article 1, Section 8, Clause 3 of the U.S. Constitution. It grants Congress the power to "regulate commerce with foreign nations, among states, and with the Indian tribes".
The interpretation of the Commerce Clause has been a subject of intense political controversy, as it defines the balance of power between the federal government and the states, as well as between the elected branches of the federal government and the Judiciary. The Constitution does not explicitly define the word "commerce", leading to differing interpretations of the scope of powers granted to Congress. Some argue that it refers to trade or exchange, while others claim that it describes broader commercial and social intercourse between citizens of different states.
The Supreme Court has generally taken a broad interpretation of the Commerce Clause, particularly in the 19th and early 20th centuries. In Gibbons v. Ogden (1824), the Court ruled that intrastate activity could be regulated under the Commerce Clause if it was part of a larger interstate commercial scheme. This was reaffirmed in Swift and Company v. United States (1905), where the Court held that Congress could regulate local commerce if it was part of a continuous "current" of commerce involving the interstate movement of goods and services.
However, in the 1930s, the Court began to narrow its interpretation of the Commerce Clause, marking the Lochner era. During this period, the Court experimented with the idea that the clause did not empower Congress to pass laws impeding an individual's right to enter into business contracts. This era ended with NLRB v. Jones & Laughlin Steel Corp (1937), where the Court recognised broader grounds for using the Commerce Clause to regulate state activity, such as if the activity had a "'substantial economic effect' on interstate commerce.
In the 1990s, the Court again attempted to curtail Congress's broad legislative mandate under the Commerce Clause, returning to a more conservative interpretation. In United States v. Lopez (1995), the Court held that Congress could only regulate the channels of commerce, the instrumentalities of commerce, and actions that substantially affect interstate commerce. This was reaffirmed in United States v. Morrison (2000).
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Indian Commerce Clause
The Indian Commerce Clause, outlined in Article I, Section 8, Clause 3 of the US Constitution, grants Congress the authority to "regulate commerce... with the Indian tribes". This clause has been interpreted to give the federal government exclusive and plenary power over Indian affairs, limiting the power of individual states.
The Indian Commerce Clause has been a source of debate and interpretation by the Supreme Court, which first enunciated the plenary power doctrine in 1886, rejecting the Indian Commerce Clause as its source. The Court's interpretation has evolved over time, with some arguing for a broader reading that grants the federal government extensive power over Indian tribes, while others advocate for a narrower interpretation that allows for a more significant role for the states.
The Supreme Court has relied on the Indian Commerce Clause to justify federal power over states and plenary power over tribes. In the case of Seminole Tribe of Florida v. Florida, the Court opined that the Indian Commerce Clause makes "Indian relations... the exclusive province of federal law," precluding almost all state authority. Similarly, in Cotton Petroleum Corp. v. New Mexico, the Court stated that the central function of the Indian Commerce Clause is to provide Congress with the power to legislate in the field of Indian affairs.
However, the Indian Commerce Clause's original understanding and intent have been questioned by scholars and justices alike. Recently, Justice Clarence Thomas has critiqued the Court's Indian Commerce Clause jurisprudence, arguing that the original understanding of the clause does not support the authority it has been interpreted to grant. This debate centres around the ambiguity of the clause's original public meaning and the silence of its drafting and adoption history.
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Frequently asked questions
The Commerce Clause is an enumerated power listed in the United States Constitution (Article I, Section 8, Clause 3). It states that the United States Congress shall have the power to regulate commerce with foreign nations, among the several states, and with the Indian tribes.
The Commerce Clause gives Congress broad power to regulate interstate commerce and restricts states from impairing interstate commerce. It has been used to address problems among the states that individual states are unable to deal with effectively.
The Commerce Clause was first translated into the present enumeration of powers in 1787 at a convention in Philadelphia. Before 1887, Congress applied the Commerce Clause only on a limited basis, usually to remove barriers that states tried to impose on interstate trade. The Interstate Commerce Act of 1887 showed that Congress could apply the Commerce Clause more expansively to national issues if they involved commerce across state lines.
The Dormant Commerce Clause is an implicit prohibition in the Commerce Clause against states passing legislation that discriminates against or excessively burdens interstate commerce. It aims to prevent protectionist state policies that favour state citizens or businesses over non-citizens conducting business within the state.
