Federal Power III

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• Federal Power III
• Dual Federalism
• Sept. 29, 2004

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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

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Invalidating Economic Regulation

• Federal Laws
• Restrictive definition of commerce
• Restrictive definition of interstate
• Expansive reading of 10th Amendment
• State Laws
• Expansion of due process to include liberty of
  contract

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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.

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Fuller Court
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Restricting Commerce

• Carter v. Carter Coal (1936)
• Challenge to Bit. Coal Conserv. Act
• Minimum and maximum prices labor law
• That commodities produced or manufactured within
  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
• Production (and incidents) are purely local
  activities
• If price control and labor agreements (both
  involving economic transactions) are not
  commerce, what is?

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Carter Coal Company
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Carter Company Town
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Carter Coins
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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
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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?
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The 10th 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

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The 10th Amendment

• Hammer v. Daggenhart (1918)
• Role of the 10th 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.

Different?

• Holmes dissent
• Purpose effects are irrelevant if congress has
  power to regulate IC
• State right to ship interstate is subject to
  federal law

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The 10th Amendment

• Hammer v. Daggenhart (1918)
• Role of the 10th 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.

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Child Labor Amendment

• Proposed Amendment (June 2, 1926)
• "Section 1. The Congress shall have power to
  limit, regulate, and prohibit the labor of
  persons under eighteen years of age.
• "Section 2. The power of the several States is
  unimpaired by this article except that the
  operation of State laws shall be suspended to the
  extent necessary to give effect to legislation
  enacted by the Congress.'
• Not ratified (but viable)

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The 10th 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

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The New Deal

• The Great Depression

Supreme Court threatens economic recovery
FDRs court-packing plan (Supreme Court
Historical Society)
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NLRB v. Jones Laughlin (1937)

• NLRA created NLRB prohibits unfair labor
  practices affecting (interstate) commerce
• Affecting in commerce, obstructing com.

Does this affect commerce?
What if JL steel was entirely intrastate?
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US v. Darby (1941)

• FLSA sets wages and hours
• 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
• 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?
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US v. Darby (1941)

• New (old?) role for 10th 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

Resolution proposing the first 12 Amendments
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.
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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

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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

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The Civil Rights Act of 1964
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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 13th Amd, Section 2
• Next in reliance on 14th 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

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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?

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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?

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Katzenbach v. McClung (1964)

• Can a business be regulated under the commerce
  clause simply because it buys goods in I/C?
• How does Ollies 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

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Practice Questions

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