Commerce Clause: Hidden Power In The Constitution

The Dormant Commerce Clause, also known as the Negative Commerce Clause, is a legal doctrine inferred from Article I, Section 8, Clause 3 of the US Constitution, which gives Congress the power to regulate commerce with foreign nations, among states, and with Indian tribes. This clause has been interpreted by the Supreme Court to prohibit state laws that discriminate against or unduly burden interstate commerce, even in the absence of specific congressional legislation. The Court's decisions on the Dormant Commerce Clause aim to prevent economic protectionism and preserve a national market for goods and services. The doctrine's origins can be traced back to the 1820s, with early applications seen in cases such as Gibbons v. Ogden in 1824 and Cooley v. Board of Wardens in 1851.

Explore related products

Dormant Commerce Clause: Contemporary Supreme Court Decisions (LandMark Case Law)

$3.99

ECONOMIC DEVELOPMENT AND THE DORMANT COMMERCE CLAUSE: THE LESSONS OF CUNO V. DAIMLERCHRYSLER AND ITS EFFECT ON STATE TAXATION AFFECTING INTERSTATE COMMERCE

$17.75

The Commerce Clause: Volume 2

$97.95

The Constitution and Economic Regulation: Commerce Clause and the Fourteenth Amendment

$50.86 $62.99

The Tenth Amendment and the Interstate Commerce Clause

$9.99 $9.99

House Hearing, 109th Congress: Economic Development and the Dormant Commerce Clause: The Lessons of Cuno V. Daimler Chrysler and Its Effects on State

$17.75

The Commerce Clause

In the 1851 case of Cooley v. Board of Wardens, Justice Benjamin R. Curtis wrote for the Court, noting that:

> "Either absolutely to affirm, or deny that the nature of this [commerce] power requires exclusive legislation by Congress, is to lose sight of the nature of the subjects of this power, and to assert concerning all of them, what is really applicable but to a part."

In 1937, following the end of the Lochner era, the use of the Commerce Clause by Congress to authorize federal control of economic matters became effectively unlimited. However, in United States v. Lopez (1995), the Supreme Court attempted to curtail Congress's broad legislative mandate under the Commerce Clause by returning to a more conservative interpretation of the clause. 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 as the possession of a firearm in a school zone would lead to violent crime, thereby affecting general economic conditions. The Supreme Court rejected the government's argument, holding that Congress only has the power to regulate the channels of commerce, the instrumentalities of commerce, and action that substantially affects interstate commerce.

The Dormant Commerce Clause, or Negative Commerce Clause, is a legal doctrine that courts in the United States have inferred from the Commerce Clause in Article I of the US Constitution. The primary focus of the doctrine is barring state protectionism. The Dormant Commerce Clause prohibits state legislation that discriminates against, or unduly burdens, interstate or international commerce. In California, for example, milk sold is required to contain a certain percentage of milk solids that federal law does not require. This is allowed under the Dormant Commerce Clause because California's stricter requirements apply equally to California-produced milk and imported milk and do not discriminate against or inappropriately burden interstate commerce.

Limits state authority

The Dormant Commerce Clause, or Negative Commerce Clause, is a legal doctrine inferred from the Commerce Clause in Article I, Section 8, Clause 3 of the US Constitution. The Commerce Clause gives Congress the power to "regulate commerce with foreign nations, among states, and with the Indian tribes".

The Dormant Commerce Clause limits state authority by barring state protectionism and prohibiting state legislation that discriminates against or unduly burdens interstate or international commerce. This means that states may not discriminate against interstate commerce or take actions that appear neutral but unduly burden interstate commerce. For example, in 2015, the Court held that Maryland's practice of taxing personal income earned in the state and taxing its citizens' personal income earned outside the state without offering tax credits for income tax paid to other states was a violation of the dormant commerce clause.

The dormant commerce clause prevents states from adopting protectionist measures and preserves a national market for goods and services. Courts first determine whether a state regulation discriminates on its face against interstate commerce or whether it has the purpose or effect of discriminating against interstate commerce. If the statute is discriminatory, the state must justify both the local benefits flowing from the statute and show that it has no other means of advancing its legitimate local purpose.

The dormant commerce clause also applies to state taxation. The Court's taxation decisions reflect the Framers' conviction that the new Union must avoid economic Balkanization, which had plagued relations among the Colonies and later among the States under the Articles of Confederation.

The dormant commerce clause is not a license for federal courts to decide what activities are appropriate for state and local governments. Citizens can choose to leave matters to the private sector, in which case any regulation undertaken must not discriminate against interstate commerce.

Prohibits state protectionism

The Dormant Commerce Clause, also known as the Negative Commerce Clause, is a legal doctrine inferred from the Commerce Clause in Article I, Section 8 of the US Constitution. While the Commerce Clause grants Congress the power to regulate commerce with foreign nations, among states, and with Indian tribes, the Dormant Commerce Clause acts as a restriction on state power.

The primary focus of the Dormant Commerce Clause is to prohibit state protectionism and prevent economic Balkanization among the states. It achieves this by barring state legislation that discriminates against or unduly burdens interstate or international commerce. Courts determine whether a state regulation discriminates against interstate commerce on its face or in its purpose or effect. If a statute is found to be discriminatory, the state must justify the local benefits of the statute and demonstrate that there are no alternative means to advance the legitimate local purpose.

For example, in the 2015 case of Comptroller of the Treasury of Maryland v. Wynne, the Court held that Maryland's practice of taxing personal income earned both in and out of the state, without providing a tax credit for income tax paid to other states, violated the Dormant Commerce Clause. The Court considered this double taxation as a form of protectionism that restricted interstate commerce.

In another instance, the Supreme Court struck down an Oklahoma law that mandated electric utilities to source ten percent of their coal purchases from in-state suppliers. This law was deemed to blatantly discriminate against out-of-state actors and favour in-state economic interests, falling under the purview of the Dormant Commerce Clause.

The Dormant Commerce Clause also applies when a law is facially neutral but unduly burdens interstate commerce. For instance, in National Pork Producers Council v. Ross, the Court affirmed that California's Proposition 12, forbidding the sale of pork from pigs confined in a cruel manner, did not violate the Dormant Commerce Clause. The Court rejected the argument that Proposition 12 violated extraterritoriality, as it did not have the practical effect of controlling commerce outside the state.

Explore related products

Taxes Supreme Court Decisions

$26.49

The Commerce Clause: Volume 1

$97.95

Economic Liberties and the Constitution

$63.99 $190

The Commerce Clause: Historic US Supreme Court Cases (LandMark Case Law)

$9.99

Corporate Welfare: Crony Capitalism That Enriches the Rich

$41.79 $52.95

The Journalist's Guide to American Law

$96.99 $210

Court interpretations

The Dormant Commerce Clause, or Negative Commerce Clause, is a legal doctrine inferred from the Commerce Clause in Article I, Section 8, Clause 3 of the US Constitution. The Commerce Clause gives Congress the power to "regulate commerce with foreign nations, among states, and with the Indian tribes".

The Supreme Court has identified two principles that guide its modern interpretation of the Dormant Commerce Clause. Firstly, states may not discriminate against interstate commerce. Secondly, states may not take actions that appear neutral but unduly burden interstate commerce.

In the 1851 case of Cooley v. Board of Wardens, Justice Benjamin R. Curtis wrote:

> "Either absolutely to affirm, or deny that the nature of this [commerce] power requires exclusive legislation by Congress, is to lose sight of the nature of the subjects of this power, and to assert concerning all of them, what is really applicable but to a part."

The first clear instance of the Supreme Court striking down a state law under the Dormant Commerce Clause came in 1873 in Reading Railroad Company v. Pennsylvania.

In 1995, the Supreme Court attempted to curtail Congress's broad legislative mandate under the Commerce Clause in United States v. Lopez, returning to a more conservative interpretation of the clause. The defendant was charged with carrying a handgun to school in violation of the federal Gun-Free School Zones Act of 1990. The Supreme Court rejected the government's argument, holding that Congress only has the power to regulate the channels of commerce, the instrumentalities of commerce, and actions that substantially affect interstate commerce.

In 2015, the Court addressed Maryland's unusual practice of taxing personal income earned in Maryland and taxing the personal income of its citizens earned outside the state without providing tax credits for income tax paid to other states. The Court held that this double taxation violated the dormant Commerce Clause.

More recently, in May 2023, the Supreme Court issued an opinion in National Pork Producers Council v. Ross, affirming a lower court decision dismissing a lawsuit that California's Proposition 12, which forbids selling pork from certain pigs confined in a cruel manner, violates the Dormant Commerce Clause.

Taxation decisions

The Dormant Commerce Clause, or Negative Commerce Clause, is a legal doctrine inferred from the Commerce Clause in Article I, Section 8, Clause 3 of the US Constitution. While the Commerce Clause grants Congress the power to regulate commerce with foreign nations, among states, and with Indian tribes, the Dormant Commerce Clause limits state authority in this area. This limitation on state power has evolved significantly over time, with various Supreme Court decisions shaping its interpretation.

The early interpretation of the Dormant Commerce Clause focused on restricting states' ability to regulate commerce. The landmark case of Gibbons v. Ogden (1824) established the federal government's authority to regulate interstate commerce. This case held that intrastate activity could be regulated under the Commerce Clause if it was part of a larger interstate commercial scheme.

The Dormant Commerce Clause plays a crucial role in preventing state laws from unduly burdening or discriminating against interstate commerce. It acts as a check on state legislation that might impede the free flow of goods and services across state lines, promoting economic unity and preventing protectionism. This ensures that states do not enact laws that could fragment the national market and protects against economic isolationism.

State taxation laws are subject to challenge under the Dormant Commerce Clause if they are deemed to discriminate against or unduly burden interstate commerce. In the 2015 case of Comptroller of the Treasury of Maryland v. Wynne, the Court addressed Maryland's unusual practice of double taxation on personal income, which was found to violate the Dormant Commerce Clause. The Court held that such taxation practices jeopardized the welfare of the nation as a whole by placing burdens on the flow of commerce.

The Court's taxation decisions reflect the Framers' concern for avoiding economic Balkanization among the states. The pre-New Deal Court applied a formalistic approach to state taxation, attempting to strike a balance between state regulatory power and maintaining a unified national market. The New Deal Court, however, marked a shift in approach, as seen in Western Live Stock v. Bureau of Revenue (1938), where Justice Stone's opinion introduced pragmatism to the interpretation of state taxation challenges.

Frequently asked questions