Article I, Section 08, Clause 03

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To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

March 22, 2011 – Article I, Section 08, Clause 03 of the United States Constitution – Guest Essayist: Dr. John S. Baker, Jr., Professor Emeritus, Louisiana State University Law School

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Article 1, Section 8, Clause 3

3:  To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

During the Ratification Debates, the power of Congress under Clause 3 of Article I, Section  8  “To regulate Commerce with foreign Nations, and among the several States, and with Indian Tribes” was not controversial.  It was generally recognized that the lack of such a power in the Articles of Confederation had damaged trade and finance among the states.  Moreover, without a power to superintend commerce moving from state-to-state, the United States as a confederation was hampered in negotiating trade treaties. Other nations, notably Great Britain, had experienced the inability of the Confederation to prevent States from violating treaty obligations of the United States.

Since the adoption of the Constitution, the Commerce Clause has been much more controversial.  Two early foundational cases in the Supreme Court, McCulloch v. Maryland (1819) and Gibbons v. Ogden (1824, address the Commerce Clause in the context of the broad issues of constitutional structure.  Later cases in the Nineteenth century, particularly following the Civil War, deal primarily with what is known as the “dormant commerce clause.” This doctrine involves the limits implied by the Constitution on the ability of the states to affect commerce, e.g. Cooley v. Board of Wardens (1852). Since the beginning of the 20th Century, the Supreme Court’s jurisprudence concerning both Congress’s power under the Commerce Clause and the limits on the states’ powers to affect interstate commerce has undergone occasional, significant shifts.

The political divide over the regulation of commerce came to the fore soon after the creation of the government under the Constitution. During the Presidency of George Washington, Treasury Secretary Alexander Hamilton promoted federal legislation designed to develop an active commerce built around manufacturing. His most controversial success was creation of the Bank of the United States, a corporation chartered by the federal government. Hamilton and Secretary of State Thomas Jefferson squared off over the authority of Congress to create a corporation.

The Hamilton-Jefferson debate was not simply one over a policy. The two men had radically different ideas about the role of commerce in the United States. Jefferson’s vision of an agrarian America opposed Hamilton’s promotion of a commercial republic, driven by finance as epitomized in the Bank of the United States. Jefferson favored a more passive commerce which served mainly as a means for selling agricultural production, especially abroad. This debate involved a fundamental disagreement about the nature and the extent of the federal government’s powers under the Constitution.

Long before the Supreme Court had the opportunity of addressing the issue, these two great statesmen publicly debated the constitutionality of the Bank. Their positions rested on opposing views regarding interpretation of the Constitution. Jefferson focused on the fact that the Constitution contained no power to create a corporation. He employed “strict construction” of the Constitution to argue that neither the Commerce Clause nor the “Necessary and Proper” Clause authorized creation of the Bank. Jefferson’s position was that Congress could rely on the “Necessary and Proper” Clause only to do that which was “absolutely necessary” to carry out one of the listed powers. Hamilton, on the other hand, justified creation of the Bank as a legitimate exercise of the federal government’s enumerated powers. His position coincided with his own explanation of federal powers laid out in Federalist #23. That is to say, the position of Hamilton and The Federalist, later embodied in McCulloch v. Maryland (to be analyzed later in the section addressing the “Necessary and Proper” Clause), was that the Constitution gives Congress a limited number of powers, but places no limit on the powers actually given.

The term “strict construction,” as used by Jefferson, differs from what the public apparently understands to be the meaning of that term. By “strict construction,” Jefferson means a narrow construction of the words in the Constitution. According to Jefferson, for example, the “Necessary and Proper” Clause only authorizes that which is “absolutely” necessary. The Constitution, however, does not include the word “absolutely” to modify “necessary.”

Today, those who refer to “strict construction” do not necessarily adopt Jefferson’s narrow construction. Generally, those who use the term mean simply this: following the text of the Constitution. For them, the term “strict construction” is the opposite of a “liberal” interpretation,” which involves going beyond the words of the Constitution.  Those, on the other hand, who support liberal construction justify doing so under the banner of “a living Constitution” which they contend must be “updated” by the Supreme Court. Justice Scalia, who opposes the notion of “the living Constitution,” surprises many when he says he is not a “strict constructionist.” Rather, the Justice describes himself both as an “Originalist” and a “textualist,” a methodology he explains as one which gives to the words of the Constitution the original meaning of the particular text.

Chief Justice Marshall’s opinion in Gibbons v. Ogden (often referred to as “the Steamboat case”) definitely rejected the Jeffersonian version of “strict construction.” Rather, Marshall’s reading of the Commerce Clause involved what today could best be described as “originalist” and “textualist.” The case addressed two issues: 1) whether, under the Commerce Clause, Congress had the power to enact legislation regulating river transportation; and 2) whether a New York statute granting a monopoly on steamboat traffic was constitutional.

On the first issue, the Court analyzed the text as follows: a) the federal law “regulates”; b) river transportation falls within the meaning of “commerce”; and c) the commerce, being between the states of New York and New Jersey is “among the states.” The federal statute, thus, fell within Congress’s power to “regulate Commerce … among the Several States.”  The Court accordingly held that the federal law to be constitutional. On the second issue of the state monopoly which conflicted with the federal statute, the state statute had to give way under the Constitution’s Supremacy Clause.

The challenger to the New York monopoly argued the power over commerce given to Congress was an exclusive one which could not be exercised by the states. Gibbons found it unnecessary to decide that issue. A later Supreme Court opinion, Cooley v. Board of Wardens (1852), addressing primarily the power of a state to regulate matters related to a harbor, decided that the Commerce power was not exclusive to the federal government. Unfortunately, Cooley did not pay particular attention to the text of the Commerce Clause, which does not give Congress power to regulate all commerce, but “commerce among the States.” Instead, the Court took it upon itself to divide commerce between what is “national” and what is “local,” a distinction not grounded in the text. As a result of Cooley and later cases, the Court followed several theories to decide when a state could regulate commerce and when the federal government could do so.

In the course of things, the Court conflated the tests for what states could do and what the federal government could do. From cases involving state regulation, the Court looked to whether the law was “affecting” or “substantially affecting” interstate commerce. If what the state did was deemed to impede “interstate commerce,” then the statute was held to be unconstitutional as a violation of the “dormant commerce clause.”  While the Court’s authority to imply a “dormant commerce clause” is itself debatable in terms of an originalist or textualist interpretation, transferring that text to the Congress’s power under the Commerce Clause clearly conflicts with an originalist or textualist interpretation of the clause, which nowhere mentions “interstate commerce.”

The Court’s departure from the text of the Commerce Clause has involved two wild swings. Prior to 1937, the Court declared certain pieces of federal legislation unconstitutional which it said did not actually regulate interstate commerce. In the view of the Court’s majority, the unconstitutional law had the purpose of regulating something else, e.g., manufacturing, and therefore fell within the powers of the states to regulate. The extreme case on this side was Hammer v. Dagenhart (1918), a case which held Congress could not enact a child-labor law. During the early years of the presidency of Franklin Roosevelt, the Court declared unconstitutional several key pieces of New Deal legislation which created a serious constitutional conflict between the Court and the two political branches.

In 1937, however, a majority of the Court began to uphold New Deal legislation on the theory that Congress’s purpose in enacting the law was to regulate some activity which “substantially affected,” and eventually simply “affected,” interstate commerce. The extreme example was Wickard v. Fillburn (1942), a case in which the Court upheld the power of the federal government to regulate how much wheat a farmer could grow. Even though some of the wheat was for self-consumption and specifically not for commerce, it was said to “affect interstate commerce” by with-holding wheat from the wheat market. Under this approach, Congress came to expect that the Court would uphold almost any legislation that simply claimed to regulate some activity which “affected interstate commerce.”

Since the mid-1990s, and for the first time since the mid-1930s, the Supreme Court has declared unconstitutional two acts of Congress which were purportedly passed pursuant to the Commerce Clause.  U.S. v. Lopez (1995) held that Congress could not enact a law prohibiting possession of a weapon within a school-zone because the activity regulated was not commerce.  In U.S. v. Morrison (2000), the Court declared unconstitutional the “Violence Against Women Act.” More recently, however, in Gonzales v. Raich (2005), the Court upheld the ability of the federal government to punish the growing at home of marijuana for personal medical purposes. In doing so, the Court re-affirmed Wickard and the notion that, under the “Necessary and Proper” Clause, Congress can regulate activities otherwise beyond its power in order effectively to regulate a nationwide market.

As of this writing, the Supreme Court has not addressed the Healthcare Reform legislation enacted in 2010. When it does so, the federal government will rely on Wickard and Raich and the states and individuals challenging the law will rely on Lopez and Morrison.

Dr. John S. Baker, Jr. is Professor Emeritus at Louisiana State University Law School.