Lecture 28 The Commerce Power Part 5: The New Deal- II

This lecture The last of the New Deal Cases Pages 449, 452-466

The Stitch in Time that Saved Nine West Coast Hotel v. Parrish (1937) The initial vote was 4-4  Justice Stone had been ill  in December 1936 Justice Roberts had voted with the liberals for a sweeping opinion He was never a doctrinaire conservative, he grew tired of their rulings This case was handed down on March 29 Along with a couple of other cases in FDR’s favor Known as White Monday We will read this case in Chapter 10 But was this an aberration or a fundamental change in judicial philosophy by Roberts? NLRB will answer that

National Labor Relations Board v National Labor Relations Board v. Jones & Laughlin Steel Corporation (1937) National Labor Relations Board v. Jones & Laughlin Steel Corporation (1937) Background This deals with the constitutionality of the Wagner Act The goal of this legislation was to promote the create of labor unions It sets up the National Labor Relations Board, who could hear and rule on complaints of unfair labor practices The basis for regulation under interstate commerce was to prevent industrial strife The plaintiff was a large steel producer in Pennsylvania charged with discrimination against workers trying to join a union- those workers were ordered reinstated The company refused on grounds that the Wagner Act was unconstitutional The company won, the NRLB appealed

National Labor Relations Board v National Labor Relations Board v. Jones & Laughlin Steel Corporation- II Question Arguments For the NRLB (uphold the Wagner Act) This is preventive: to avoid industrial strife They take a broad view of what affects commerce This is distinguishable because this does have a direct effect on commerce, not an indirect effect

National Labor Relations Board v National Labor Relations Board v. Jones & Laughlin Steel Corporation- III Argument: For Jones & Laughlin (strike down the law) The commerce clause cannot be used to regulate labor relations The law is broad enough to apply to every employment relationship in the country There is at best an indirect connection here This is only indirectly in the stream of commerce Did the lower court rule correctly under existing precedent?

National Labor Relations Board v National Labor Relations Board v. Jones & Laughlin Steel Corporation- IV Chief Justice Hughes writes for a 5-4 Court It turns out Roberts’ change was not an aberration You may note that Hughes’ opinions are very readable Scope of the Act Commerce is contemplated by the act The act defines affecting commerce in terms of exclusion and inclusion, so it does not extend to all employment relationships- it must affect interstate commerce Unfair Labor Practices This is a very pro-union message hear on the right to organize a union Workers have the right to collective bargaining The national government was justified in penalizing corporations engaging in interstate commerce which "refuse to confer and negotiate" with their workers”

National Labor Relations Board v. Jones & Laughlin Steel Corporation- V More from Chief Justice Hughes Application of the Act to Employees Engaged in Production The company says manufacturing is not subject to regulation Manufacturing is not commerce Steel is sent all over the country  "Although activities may be intrastate in character when separately considered, if they have such a close and substantial relation to interstate commerce that their control is essential or appropriate to protect that commerce from burdens and obstructions, Congress cannot be denied the power to exercise that control.“ This is clearly an abandonment of past precedent

National Labor Relations Board v National Labor Relations Board v. Jones & Laughlin Steel Corporation- VI A little more from the Chief Effects of the Unfair Labor Practice to the Company A labor stoppage would clearly effect interstate commerce Refusal to negotiate is a cause of industrial strife He points to the 1919-1920 Steel Strike There is a close relationship between the manufacturing industry and interstate commerce

National Labor Relations Board v National Labor Relations Board v. Jones & Laughlin Steel Corporation- VII Justice McReynolds, dissenting Joined by Van Devanter, Sutherland and Butler He is not pleased that past precedent is being overruled He cites all the past precedent that should act to overturn this law He does not think this meets the stream of commerce test He raises many potential questions on this He takes the segmented approach rather than the entirety approach He thinks this interpretation of the commerce clause may lead to federal regulation of almost everything- he is right on this (for a while)

After this case Justice Van Devanter announces his retirement on May 18 FDR ends up appointing his close ally, Sen. Hugo Black (D-Alabama), who takes office in August With this, there really wasn’t the need for the Court packing plan The Court began to rule consistently in favor FDR (see Box 7-6, page 459) By early 1941, all of the Four Horsemen were gone 1937 Van Devanter  Black (Alabama Senator) 1938 Sutherland  Reed (The Solicitor General) 1939 Cardozo  Frankfurter (ACLU Director) 1939 Brandeis  Douglas (SEC Chairman) 1940 Butler  Murphy (Attorney General) 1941 McReynolds  Byrnes (South Carolina Senator) Stone becomes Chief Justice

United States v. Darby Lumber Company (1941) Background This also involves the Wagner Act Companies engaged in interstate commerce had to pay a quarter an hour and time and a half for hours beyond 40 hours per week Darby was indicted for not paying those wages He did not dispute the charges, but cited Hammer v. Dagenhart and other cases in the Industrial Revolution era before West Coast Hotel Question: Was the act a legitimate exercise of Congress under the Commerce Clause?

United States v. Darby Lumber Company- II Arguments For the United States (law constitutional) Interstate commerce was mean to include manufacturing and the entire economy Therefore Congress can regulate both Interstate competition means that no state can require higher labor standards in the absence of a uniform federal law Ones with lower standards have an advantage- race to the bottom? The Commerce Clause should be assessed by what it regulates, not what it affects Congress need not wait for intrastate commerce to hit transportation to regulate McCulloch v. Maryland is still good law and the 10th Amendment is not a limit on the powers of the federal government

United States v. Darby Lumber Company- III Arguments For Darby (overturn the law) Production of goods is not within the power to regulate commerce This would be a direct attack on federalism and make the 10th Amendment irrelevant The mere fact that a state cannot adequately protect the markets outside its borders does not give the Congress unqualified powers to regulate competition in those interstate markets

United States v. Darby Lumber Company- IV Justice Stone rules for a unanimous Court All the four Horsemen are gone- five of the justices appointed by FDR This case directly overrules Hammer v. Dagenhart Prohibition of the shipment of goods in interstate commerce They uses the Gibbons v. Ogden language that this is an expansive federal power “The motive and purpose of a regulation of interstate commerce are matters for the legislative judgment . . . over which the courts are given no control.“ Hammer v. Dagenhart was wrongly decided More or less, if the end was legitimate, it was going to be a valid exercise of the commerce power

United States v. Darby Lumber Company- V More from Justice Stone Validity of the wage and hour requirements Is it related to commerce and affecting it? Some of the lumber would stay in the state, but other would go out of state Uniformity may be needed when a state regulation effects interstate commerce even if the activity is intrastate The Shreveport Doctrine This was to stop states from having substandard conditions and wages They limit Carter v. Carter Coal They seem to limit application of the 10th Amendment “The amendment states but a truism that all is retained which has not been surrendered”

Wickard v. Filburn (1942) Wickard v. Filburn (1942) Background The 1938 version of the Agricultural Adjustment Act allows the Secretary of Agriculture the authority to set particular quota- which are assigned to each farmer Filburn had a farm outside of Dayton, raising cattle, poultry, eggs, plus winter wheat, some of which he sold He was allowed to produce a certain amount of wheat, but he planted more acres than allotted and more bushels than allowed He was fined for this and refused to pay, saying this act violated the commerce clause Question: Does Congress have the authority to regulate this local activity under the Commerce Clause?

Wickard v. Filburn- II Arguments For Wickard (Secretary of Agriculture- uphold the law) It penalizes only excess wheat- which effects prices The quota system is feasible because the government needs to know all wheat production Congress chooses when it acts as appropriate to regulate interstate commerce For Filburn (strike down the law) This in no way involves interstate commerce This never moves beyond the state (or even the farm?)  it is private property What a farmer produces on his own farm for his own purposes is his business There is not competition with anyone

Wickard v. Filburn- III Justice Jackson rules for a unanimous Court All but two of the justices were FDR appointees He also points to Gibbons v. Ogden Marshall described the federal commerce power with a breadth never exceeded This was a sign of near total deference to Congress on the Commerce Clause May be direct or indirect Whether the activity "exerts a substantial economic effect on interstate commerce": Regulation of the price of wheat means sustaining or increasing the demand as by limiting the supply His amount of wheat may be trivial but not when you allow many others to do the same This is about Congress having the power to regulate commodity prices Homegrown wheat competes with the wheat in commerce

Next lecture It will shorter than usual We will only cover the expansive era Pages 466-472