Constitutional Law I Spring 2004Con Law I Federal Power III “Dual Federalism” Feb. 17, 2004

2 Overview, Themes Pre-Civil War Taney replaces Marshall, state appeasement Union victory, Reconstruction Passage of Civil War Amendments (13, 14, 15) States’ Rights movement discredited Post-Civil War Rapid Industrialization Rise of trusts, industrial class Laissez Faire movement - Conservative Court

3 Invalidating Economic Regulation Federal Laws Restrictive definition of “commerce” Restrictive definition of “interstate” Expansive reading of 10 th Amendment State Laws Expansion of “due process” to include liberty of contract

4 Restricting “Commerce” U.S. v. E.C. Knight (1895) Challenge to Sherman Antitrust Act Fuller: “Commerce succeeds to manufacture and is not a part of it”  Complete separation of commerce and police powers Harlan: How can Congress effectively regulate IC if it cannot regulate combinations in restraint of trade?  These directly, not incidentally, affect the people of all the states.

5

6 Restricting “Commerce” Carter v. Carter Coal (1936) Challenge to Bit. Coal Conserv. Act  Minimum and maximum prices; labor law Fuller: “That commodities produced or manu- factured w/in a state are intended to be sold or transported outside the state does not render their production or manufacture … commerce”  Mining, manufacture, employment are not commerce If price control and labor agreements (both involving economic transactions) are not commerce, what is?

7

8 Restricting “Interstate” Shreveport Rate Cases (1914) [not assigned] Incident to its power to regulate interstate transportation rates, Congress could also reg- ulate intrastate rates. Interlude: War, Great Depression, New Deal

9 Restricting “Interstate” Schechter Poultry (1935) [not assigned] Federal law prohibited sellers from requiring buyers to purchase “sick chickens”  Chickens originated out-of-state, but wholesale transaction occurred wholly within NY state.  Court rejects “current” or “flow of commerce”  “There is a clear and necessary distinction between direct and indirect effects on IC” If Schechter were still good law, could congress regulate this?

10 The 10 th Amendment Hammer v. Dagenhart (1918) Federal law prohibited interstate trafficking in child-made goods  Goods themselves were harmless Impact on interstate commerce?  Race towards the bottom  Could states regulate? Result: interstate commerce cannot effectively be regulated, either by congress or states

11 The 10 th Amendment Hammer v. Daggenhart (1918) Role of the 10 th Amendment: “the act in a two- fold sense is repugnant to the Constitution. It not only transcends the authority delegated to Congress over commerce, But also exerts a power as to a purely local matter to which the federal authority does not extend.” Holmes dissent: Purpose & effects are irrelevant if congress has power to regulate IC  State right to ship interstate is subject to federal law Different ?

12 The 10 th Amendment Champion v. Ames (1903) Federal law prohibited interstate traffic in lottery tickets Does it matter the purpose of the act could be to control “widespread pestilence of lotteries”? Contrast to Hammer: Lottery tickets, as articles of commerce, are themselves harmful. Clothing is not. ? Congress’ policy was consistent w/state policy

13 The New Deal The Great Depression FDR’s court-packing plan (Supreme Court Historical Society) Supreme Court threatens economic recovery

14 NLRB v. Jones & Laughlin (1937) affecting NLRA created NLRB; prohibits “unfair labor practices affecting (interstate) commerce” Affecting = “in commerce,” “obstructing” com. Does this “affect” commerce? What if J&L steel was entirely intrastate?

15 US v. Darby (1941) FLSA sets wages and hours 1.“commerce prohibiting” measure  “not a forbidden invasion of state power because of motive or consequence”  No objection that federal law has similar effect as state exercise of its police power Ends are different, even if means are the same  Hammer v. Dagenhart overruled 2.Regulation of goods produced for IC  Power extends to intrastate activities Affecting IC Related to other valid federal regulation (e.g., #1) Boot- strapping? Super boot- strapping?

16 US v. Darby (1941) New (old?) role for 10 th Amd “The amendment states but a truism that all is retained which has not been surrendered. [Nothing] more than declaratory of the relationship between the national and state governments as it had been established by the Constitution” The Conventions of a number of the States, having at the time of their adopting the Constitution, expressed a desire, in order to prevent misconstruction or abuse of its powers, that further declaratory and restrictive clauses should be added: And as extending the ground of public confidence in the Government, will best ensure the beneficent ends of its institution.”” Resolution proposing the first 12 Amendments

17 Wickard v. Filburn (1942) Agricultural Adjustment Act limited production (to stabilize prices) Not just production for interstate shipment, but also production for home consumption Does home consumption affect commerce?  Impact on demand for wheat in interstate market?  Impact on prices?  Impact on overall economy? Even from trivial amount consumed by Filburn? Aggregate effects test

18 Wickard v. Filburn (1942) Agricultural Adjustment Act limited production (to stabilize prices) Not just production for interstate shipment, but also production for home consumption Does home consumption affect commerce?  Impact on demand for wheat in interstate market?  Impact on prices?  Impact on overall economy

19 Federal Power over Civil Rights Background Social matters are typically a state concern After the Civil War, congress enacted a series of civil rights laws, as part of reconstruction  First in reliance on 13 th Amd, Section 2  Next in reliance on 14 th Amd, Section 5  In 1883, the Supreme Court held Civil Rights Laws unconstitutional, as beyond Congress § 5 powers. Federal protection of civil rights lay dormant for 80 years, until the 1960s civil rights movement 1964 Civil Rights Act used the commerce clause

20 Heart of Atlanta Motel v. US (1964) Is a law prohibiting race discrim- ination in accommodations related to I/s commerce? Because of the burdens it places on African-Americans traveling interstate? Because the hotel acquires goods in IC?

21 Heart of Atlanta Motel v. US (1964) If the law is otherwise valid, does it matter that Congress’ real goal was equal rights? Object vs. Motive in pursuing that object Should congress have used Section 5?

22 Katzenbach v. McClung (1964) Can a business be regulated under the commerce clause simply because it buys goods in I/C? How does Ollie’s Barbecue burden I/C?  Aggregate effects test? Wickard, NLRB, Darby Does the Act purport to regulate Ollie just because he engages in I/C? Or is Ollie simply forbidden to use I/C to practice discrimination? Does local criminal activity affect I/C? If part of a national enterprise? Perez v. US

23 Practice Questions 1. During the era of dual federalism, could Congress regulate environmental quality? a.Isn't pollution created & felt entirely intrastate? b.Does pollution affect or in the current of commerce? c.Would it matter if congress enacted the law as a health measure, rather than to promote commerce? 2.Could states regulate environmental quality? 3.Could congress enact consumer protection laws? a.Besides the FTC and the SEC, what other federal agencies are unconstitutional? b.Since health & welfare is a quintessential state concern, would federal law violate the 10 th amd?