I. Congressional Power to Regulate Interstate Commerce

Congress has the power to regulate interstate commerce. The source of Congressional power to regulate interstate commerce is the Commerce Clause in Article I, Section 8. This power is viewed as consisting of 3 categories of regulatory authority: (1) the power to regulate the channels of interstate commerce, (2) the power to regulate the instrumentalities of interstate commerce, and (3) the power to regulate local activities that have a substantial economic effect on interstate commerce. This third category is seen by Justice Scalia as justified by the Commerce Clause together with the Necessary and Proper Clause (a grant of power to Congress to employ all means that are plainly adapted to an enumerated end) and not based on the Commerce Clause alone.

A. Regulation of the Channels of Interstate Commerce:

1. What is a channel of interstate commerce? These include navigable waterways, airspace, highways, railroad tracks, telephone lines and the Internet - these are the conduits through which interstate commerce travels.

2. What does the power to regulate include? Congress’s regulatory power is complete. It can regulate the use of the channels of interstate commerce in any fashion (including prohibiting transportation entirely) and for any purpose. The purpose need not be to protect or stimulate or inhibit the economy, but could be related to morality, health or safety. Congress can use its plenary power to regulate the channels of interstate commerce even to accomplish traditional police power objectives.

3. What are some examples of this use of the commerce power? The Lottery Case where Congress banned the shipment of lottery tickets in interstate commerce, Hammar v. Daghenart (The Child Labor Case) (reversed in Darby), and Darby (the ban on shipping goods not produced in compliance with FLSA).

B. Regulation of the Instrumentalities of Interstate Commerce:

1. What is an instrumentality of interstate commerce? These are means used to transport goods and persons in interstate commerce including railroad cars, buses, trucks, airplanes, and boats (as in Gibbons v. Ogden). The line between a channel and an instrumentality is somewhat unclear, but it has no practical consequence since the Court’s analysis is the same for activities falling within either of the first two categories. Both the Internet and highways have been considered to be both channels and instrumentalities by various courts considering the issue. While the Internet can be considered a channel, various Internet applications such as e-mail are considered to be instrumentalities.

2. What does the power to regulate include? The power to regulate the means of interstate transportation themselves as well as to protect against threats to that transportation even if the threat is from intrastate activities. This allows Congress to regulate activities at places such as airports, train stations, and cargo storage areas to protect interstate commerce.

3. What are some examples of this use of the commerce power? One example is the Shreveport Rate Case, where the Court upheld the federal regulation of intrastate rail rates which discriminated against interstate commerce by charging less for longer intrastate railroad journeys than for shorter interstate railroad trips. Another is a federal law that makes it a crime to damage or destroy an airplane employed in interstate or foreign commerce even though the destruction occurs while the plane is stored in an airplane hangar. A third example is a federal law that makes it a crime to damage property in the possession of an air carrier, motor carrier, or rail carrier and being transported in interstate or foreign commerce.

C. Regulation of Local Activities that have a Substantial Economic Effect on Interstate Commerce.

Since United States v. Lopez, this category has been further subdivided into the regulation of local economic (or commercial) activities on the one hand and the regulation of local non-economic (or non-commercial) activities on the other.

1. Regulation of Local Economic Activities

a. When Congress regulates an intrastate economic or commercial activity (as in Wickard v. Filburn, Heart of Atlanta and Perez), the test the Court uses is whether Congress could have rationally concluded that the regulated activity has a substantial economic effect on interstate commerce.

b. This test shows great deference to the judgment of Congress, a judgment often, but not necessarily, reflected in Congressional findings, hearings and committee reports.

c. The substantial economic effects can be found in the aggregate so the question is not whether an individual instance of the regulated activity affects commerce (the wheat grown by farmer Filburn or the guests who want to stay at the Heart of Atlanta Motel), but whether the regulated activity in its entirety (adding together the impact of each individual instance of the regulated activity) has a substantial economic effect on interstate commerce (all the wheat farmers grow for home consumption or all the travelers who are unable to stay at hotels and motels because such places discriminate based on race).

d. Whenever the activities of an enterprise have a substantial economic effect on interstate commerce (such as the wages of workers at a factory that produces goods that are shipped to other states), Congress is permitted to regulate every instance of the activity, including all of the factory’s workers, even if some of those workers are not employed in producing goods for interstate commerce.

e. When Congress regulates an interstate economic activity or enterprise under a comprehensive regulatory scheme, it may also regulate the aspects of that activity that are intrastate in character (as in Wickard v. Filburn and Gonzales v. Raich). The intrastate aspect of the activity (even if it is an agricultural product grown for home or personal consumption) may be regulated in order to make the entire regulatory scheme effective. This is true where the characteristics of the product are the same, whether intended for interstate shipment or local use (like the wheat in Wickard and the marijuana in Raich) and the failure to regulate the local production would, in the view of Congress, leave a significant gap in the regulatory scheme.

f. In a similar fashion to (d) and (e) above, Congress may regulate a class of activities if the class as a whole affects interstate commerce even if not all members of the class affect interstate commerce. The “class of activities” rationale was relied on in Perez to regulate extortionate credit transactions and was a source of disagreement between the majority and dissent in Gonzales v. Raich. In Raich, the majority concluded that the class of activities being regulated were the cultivation, possession, and distribution of marijuana, a class of activities that had a substantial economic effect on interstate commerce. Congress could regulate the cultivation and possession of marijuana for medicinal purposes since it was part of the regulated class. The dissent, by contrast, concluded that the cultivation and possession of marijuana for medicinal purposes was a separate class of activities and that this more limited class did not have a substantial economic effect on interstate commerce and, therefore, could not be regulated by Congress.

g. The fact that Congress may have been motivated in whole or in part by a moral objective is not relevant so long as the regulated activity also has a substantial economic effect on interstate commerce (as in the case of the Civil Rights Act of 1964 when Congress outlawed racial discrimination in places of public accommodation both because of the immorality of discrimination and also because the discrimination had a negative effect on interstate commerce by discouraging travel by African-Americans).

2. Regulation of Local Non-economic Activities

a. The distinction between economic and commercial activities as contrasted with non-economic and noncommercial activities is evaluated on a case by case basis and the dividing line may be somewhat murky. The Court characterized possession of a gun in a school zone as non-economic in Lopez and violence against women as non-economic in Morrison. By contrast, growing of wheat for home consumption was considered an economic activity in Wickard and racial discrimination against travelers by hotels and motels was considered to be an economic activity in Heart of Atlanta Motel. The question of whether the activity regulated is economic or not may depend on the scope of the Congressional regulatory scheme. If the scheme generally regulates a commercial activity, the Court may be willing to characterize all of the applications of the statute as the regulation of commercial activity including those that reach activity, which viewed in isolation, might be considered noncommercial (such as the medicinal marijuana grown for personal consumption in Raich which was regulated as part of a comprehensive regulation of the illegal drug market).

b. When Congress regulates an intrastate noncommercial, non-economic activity (as in Lopez and Morrison), the court is less deferential to Congress.

c. When Congress regulates a non-economic, noncommercial local activity the Court will be more likely to uphold the regulation if the statute contains a jurisdictional element that requires a connection to interstate commerce be shown in each individual case where the statute is applied (such an element was missing in both Lopez and Morrison, but is present in the amended version of the Lopez statute).

d. The presence or absence of Congressional findings are not determinative (they were present in Morrison, but absent in Lopez), but such findings may help to demonstrate the existence of a substantial economic effect on interstate commerce.

e. The substantial effect on interstate commerce needs to be based on more than limitless arguments that would be available whenever Congress regulates violent crime and can show a connection between the crime and a reduction in economic productivity (Morrison). Without such a limit, Congress would have the equivalent of a federal police power.

f. The substantial effect on interstate commerce needs to be more direct and not based on an attenuated series of links in a chain that may connect an activity to a decline in education and then to a less qualified workforce and then to a decline in economic productivity (Lopez).

g. Also relevant in these cases is whether the regulated activity (education or family relationships, for example) is one that has been traditionally the province of the states and not the federal government. However, the distinction between activities that have traditionally been the province of the states as contrasted to those that have traditionally been the province of the federal government is far from clear cut.

h. In the case of non-economic, violent crime, the Court will not allow Congress to regulate “based solely on that conduct’s aggregate effect on interstate commerce.” (Morrison at page 175). It is not yet clear whether a similar restriction will be applied to Congressional regulation of all non-economic, noncommercial activities (see Morrison at p.174).