Final Review (Commerce) Flashcards
(14 cards)
(Major) McCulloch v. Maryland (1819)
(Commerce Clause) Congress chartered a national bank and Maryland tried to tax it.
1. Congress has implied powers to create institutions to carry out enumerated powers.
2. States may not interfere with or tax valid federal operations.
3. Test: Law must be plainly adapted to a legitimate constitutional end.
4. Use to support broad congressional authority under Necessary & Proper Clause.
5. “Let the end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the Constitution, are constitutional.”
United States v. E.C. Knight Co. (1895)
(Commerce Clause) Federal government attempted to regulate sugar refining monopoly.
1. Manufacturing is a local activity, not interstate commerce.
2. Limits Congress’s commerce power to actual trade or exchange.
3. Part of pre-New Deal narrow view of commerce power.
4. Use as early example of judicial limits on Commerce Clause before expansion in New Deal era.
Hammer v. Dagenhart (1918)
“(Commerce Clause) Federal law (Keating-Owen Child Labor Act of 1916) prohibited interstate shipment of goods produced by child labor (in textile mills).
1. Production is local, not commerce; thus, beyond federal power.
2. Congress was seen as using the Commerce Clause to indirectly regulate local labor conditions.
2a. There was a heavy emphasis on State sovereignty–states’ rights to regulate local labor practices.
3. Dagger in the heart of Congress’ Commerce Power–Resurrected a strong Tenth Amendment limit on Federal Authority.
4. Later overruled by Darby.
5. Use when discussing dual federalism and limits on early commerce power.”
Bailey v. Drexel Furniture (1922)
(Commerce Clause) Congress imposed a tax on companies using child labor.
1. Law struck down because it was a regulatory penalty disguised as a tax.
2. Test: Distinguish legitimate taxes from penalties aimed at regulating conduct.
a. Cost: Is the price punitive in nature (I.e., the same for all levels of offense).
b. MR: Does it have a MR or Scienter requirement.
c. Is it enforced by the IRS (Treasury) or some other agency (here, the Dept. of Labor).
3. Reinforces that Congress cannot use tax power to regulate areas reserved to states.
4. Use when evaluating whether a ‘tax’ is actually a penalty requiring closer scrutiny.
A.L.A. Schechter Poultry Corp. v. United States (1935)
“(Commerce Clause) A local poultry business challenged federal regulations under the National Industrial Recovery Act (NIRA) (and Live Poultry Code) that governed wages, hours, and practices in the poultry industry, arguing that the regulations exceeded Congress’s commerce power and unlawfully delegated legislative authority.
1. The Court struck down the NIRA regulations, holding that purely intrastate activities with only indirect effects on interstate commerce cannot be regulated under the Commerce Clause.
2. Clarified that interstate commerce ends when goods come to rest locally — once chickens arrived at the slaughterhouse, they were no longer in interstate commerce.
3. Distinguished between direct effects (which Congress could regulate) and indirect effects (which Congress could not regulate) on interstate commerce.
a. The activity immediately and substantially influences interstate commerce itself –no intermediate steps. (Shipment of goods across state lines)
b. The activity affects commerce only through a chain of events, or its impact on commerce is secondary, remote, or speculative. (After arrival at slaughterhouse)
- Precursor to modern substantial effects test.
- Use to show pre-Wickard limits on federal regulatory power during the New Deal era.”
United States v. Butler (1936)
“(Commerce Clause / Spending Power) Congress passed the Agricultural Adjustment Act, attempting to regulate agricultural production (of staple crops like cotton and wheat) by offering subsidies funded through a tax on processors.
1. The Court struck down the Act, holding that Congress cannot use its taxing and spending power to invade areas of regulation reserved to the states.
2. Recognized that the Spending Clause allows Congress to spend for the “general welfare,” but distinguished between spending power and regulatory power.
a. Hamilton: Congress can spend broadly for the general welfare, not just in aid of enumerated powers.
b. Madison: Narrow–Congress can only spend in service of its other enumerated pwoers.
3. Test: Congress may spend for the general welfare, but spending conditions or taxes cannot be coercive or regulate matters purely reserved to the states.
4. Use when analyzing limitations on the Spending Clause, especially when federal programs look like disguised regulation of local matters.”
United States v. Darby (1941)
“(Commerce Clause) Congress passed the Fair Labor Standards Act, setting national minimum wage and maximum hour requirements for workers involved in producing goods for interstate commerce.
SUBSTANTIALLY AFFECT interstate commerce
1. Upheld the Act as a valid exercise of the Commerce Clause power; Congress can regulate intrastate activities when they have a substantial relation to interstate commerce.
2. Overruled Hammer v. Dagenhart, rejecting the idea that manufacturing is a purely local activity immune from federal regulation.
The Court upheld it because:
* Goods produced under substandard labor conditions “substantially affect” interstate commerce by depressing wages and creating unfair competition nationally.
* Regulating local wages and hours was therefore reasonably related to regulating the flow and fairness of interstate commerce.
3. In order to enforce commerce, Congress must enforce manufacture (To prevent a race to the bottom). 4. Use when establishing Congress’s post-New Deal broad authority to regulate labor standards and local activities substantially affecting interstate commerce."
(Major) Wickard v. Filburn (1942)
(Commerce Clause) A farmer, Filburn, grew more wheat than federally permitted under the Agricultural Adjustment Act, but claimed it was for personal consumption and never entered interstate commerce.
1. The Court upheld federal regulation, holding that even personal, non-commercial activities can be regulated if, in the aggregate, they substantially affect interstate commerce.
2. Aggregation Principle: When individual instances of local, non-economic activity, taken together, would have a significant economic effect on interstate commerce, Congress can regulate.
3. Emphasized that the Commerce Clause power extends to activities which, viewed in the aggregate, threaten national markets (here, the wheat market).
4. Use to support broad congressional power to regulate purely local activities when Congress can show their cumulative impact would undermine a larger regulatory scheme.
Heart of Atlanta Motel v. United States (1964)
(Commerce Clause) A large motel in Atlanta refused to accommodate Black guests and challenged the Civil Rights Act of 1964, arguing Congress could not prohibit racial discrimination in private businesses.
1. The Court upheld the Act, holding that Congress could regulate private discrimination in public accommodations if it substantially affects interstate commerce.
2. The motel served interstate travelers, advertised nationally, and was located near major highways — making its operations intertwined with interstate commerce.
3. Congress may use the Commerce Clause to eliminate barriers to interstate travel and economic participation, including racial segregation in businesses serving the public.
4. Use when Congress regulates economic conduct in public-facing businesses, especially where discrimination inhibits interstate movement or commerce.
Katzenbach v. McClung (1964)
(Commerce Clause) Ollie’s Barbecue, a local restaurant in Alabama, refused to serve Black customers and challenged the Civil Rights Act of 1964 as exceeding Congress’s Commerce Clause power.
1. The Court upheld the Civil Rights Act as applied to local businesses, finding that racial discrimination in restaurants substantially affects interstate commerce, even if the business itself is small and local.
2. Congress may regulate local activities if they have a substantial and cumulative effect on interstate commerce (reaffirming Wickard aggregation principle).
3. Congressional factual findings supported that racial discrimination burdened interstate travel, tourism, and commerce, justifying national regulation.
4. Use when showing that even small, local businesses can be federally regulated if their practices collectively undermine national economic interests (especially involving civil rights).
(Major) United States v. Lopez (1995)
“(Commerce Clause) Did Gun-Free School Zones Act of 1990, which criminalized possession of a gun near a school, exceed Congress’s Commerce Clause power?
1. Mere possession of a gun in a school zone is not an economic activity. (Gov. argued that guns affected education , which affected economic productivity, and thus, commerce). (First time something found beyond the enumerated powers since pre-New Deal)
2. Congress can regulate:
(a) Channels (e.g., highways, airways, internet)
(b) Instrumentalities (person or things in interstate commerce)
(c) Activities that substantially effect interstate commerce (Must be economic in nature or aggregate to a substantial effect, per Wickard).
3. NFIB: Cannot compel market participation; i.e., cannot compel INACTIVITY (e.g., forcing individuals to buy insurance).
4. Use whenever Congress regulates non-economic behavior and claims it affects commerce. “
United States v. Morrison (2000)
(Commerce Clause) Violence Against Women Act (VAWA) provided federal civil remedy for gender motivated violence. The defendant challenged Congress’s authority to create such a remedy.
1. The Court struck down the civil remedy provision, holding that gender-motivated violence is a non-economic activity and that Congress cannot regulate non-economic, intrastate conduct merely because it might, in the aggregate, affect interstate commerce.
2. Applied the Lopez framework: Congress can regulate (1) channels of interstate commerce, (2) instrumentalities of interstate commerce, and (3) economic activities that substantially affect interstate commerce — but non-economic violent crime does not fit any category.
3. Emphasized that allowing Congress to regulate non-economic activities based on their aggregated effects would obliterate the distinction between national and local authority, violating basic federalism principles.
(Major) Gonzales v. Raich (2005)
(Commerce Clause / Necessary & Proper) California permitted the medical use of marijuana, but federal DEA agents seized and destroyed Raich’s homegrown marijuana under the federal Controlled Substances Act.
Aggregation that affects an illegal national market; part of broader regulatory scheme
1. The Court upheld Congress’s authority to prohibit even local, non-commercial cultivation and use of marijuana under the Commerce Clause.
2. Congress can regulate local activities if, in the aggregate, they substantially affect interstate commerce (Wickard v. Filburn principle).
3. Necessary and Proper Clause allows Congress to regulate intrastate activities if doing so is an essential part of a broader regulatory scheme (i.e., drug trafficking regulation).
4. Use when Congress is regulating noneconomic local conduct that could undermine a larger economic regulatory scheme — especially when applying aggregation logic.
(Major) NFIB v. Sebelius (2012)
(Commerce Clause / Taxing Power / Spending Power) Congress passed the Affordable Care Act (ACA), which included an individual mandate (For “minimum essential” coverage) requiring most Americans to purchase health insurance, and expanded Medicaid funding with conditions for states.
1. Commerce Clause: IM cannot be justified under Commerce or N&P — Congress cannot regulate inactivity; forcing people into commerce exceeds its power (building on Lopez and Morrison limits).
1a. “Power to regulate commerce, not compel it.”
2. Taxing Power: The Court upheld the individual mandate as a valid exercise of Congress’s taxing power — because the penalty functioned like a tax (produced revenue, collected by IRS, no criminal punishment).
3. Spending Clause: The Court struck down part of the Medicaid expansion as unconstitutionally coercive — Congress cannot threaten existing state funding to force compliance with new conditions (refining the Dole framework).
3a. Test: Is the federal offer so coercive that it leaves states with no genuine choice?
3b. Magnitude of threatened loss (States stood to loose all existing funding, 10% of their budget, “a gun to the head”)
3c. Relationship between New Conditions and existing program (Medicaid ecpansion altered its nature).
4. Use when analyzing limits on the Commerce Clause (cannot compel participation), when defending recharacterization of a penalty as a tax, and when evaluating whether federal conditions on spending programs are coercively imposed on states.
5. NB. In analysis, first look at commerce, then Taxing.
