David J. Porter
There is a widely held view that
Congress has virtually unlimited
power to legislate, especially concerning
economic matters.
Consider, for example, the passage
of the controversial Patient Protection
and Affordable Care Act two
years ago. While Congress’ power
to regulate the economy is not completely
unbounded, it is very farreaching
indeed. However, it was
not always so.
Under the Articles of Confederation,
Congress was powerless
to address conflicting commercial
regulations imposed by the several
states. To remedy that flaw, the enumerated
powers given to Congress
under the Constitution included the
authority “[t]o regulate Commerce
… among the several States.”
At the time the Constitution
was ratified, “commerce” referred
to trade—buying and selling products—
but it did not include all economic
activity, such as manufacturing,
agriculture, and labor. In the
ratification debates, there was little
deliberation over the Commerce
power because it was understood
to be an insignificant threat to local
or non-commercial affairs. James
Madison emphasized that point in
Federalist No. 45.
Early Congresses rarely invoked
the Commerce power. The
Supreme Court’s first opportunity to
determine its scope did not arise until
Gibbons v. Ogden (1824). In that
case, the Court held that Congress
may regulate interstate commerce,
but not commerce that doesn’t extend
to or affect other states.
Over the next century, the Court
reiterated that Congress’ Commerce
power did not include regulation of
production in anticipation of trade.
In these decisions, the Court emphasized
the distinction between commerce
and other types of economic
activity that are not commerce:
“Without agriculture, manufacturing,
mining, etc., commerce could
not exist, but this fact does not suffice
to subject them to the control
of Congress” (Newberry v. United
States, 1921).
A slight shift occurred in 1914,
when the Court held that where interstate
and intrastate aspects of
commerce are so intermingled, the
Constitution permits regulation of
interstate commerce even if that
results in incidental regulation of
purely intrastate commerce. But in
general, the Court’s view of Congress’
Commerce power remained
unchanged. In 1935, the Court held
that Congress may not regulate intrastate
sales of poultry, and as late as
1936, the Court invalidated a federal
law regulating labor because “the relation
of employer and employee is a
local relation.”
The Court’s century-old Commerce
Clause jurisprudence ultimately
bowed to far-reaching New Deal
laws. In NLRB v. Jones & Laughlin
Steel Corp. (1937), the Court upheld
the National Labor Relations Act
against a Commerce Clause challenge,
holding that Congress may
regulate intrastate production if it
has a “close and substantial relation
to interstate commerce.” And in
United States v. Darby (1941), the
Court declared that “[t]he power of
Congress over interstate commerce
is not confined to the regulation of
commerce among the states.”
Wickard v. Filburn (1942) is
generally considered the most expansive
Commerce Clause decision
to date. In that case, the Court
held that Congress could regulate a
farmer’s production and consumption
of homegrown wheat because
even though his activity was local,
was not commerce, and did not substantially
or directly affect interstate
commerce, it could, in combination
with others’ similar conduct, affect
interstate commerce.
In 1964 and 1971, the Supreme
Court rejected Commerce Clause
challenges to the application of civil
rights laws to motels and restaurants,
and to a federal criminal law
prohibiting local instances of loan
sharking. In these cases, the Court
dismissed arguments that: the regulated
activity was not commercial,
Congress was legislating against
moral wrongs, the activity was purely
local, and the economic effect of
the regulated activity was so small
as to be trivial.
In United States v. Lopez
(1995) and United States v. Morrison
(2000), the Supreme Court resisted
further expansion, a reminder
that even after the New Deal cases,
Congress’ Commerce power still has
outer limits. Because the federal laws
in Lopez and Morrison (prohibiting
possession of a gun near a school
and gender-motivated violence, respectively)
regulated local activity
having no effect on interstate commerce,
they were really exercises
of the general police power that belongs
exclusively to the states.
In the case now pending before
the Supreme Court on the Patient
Protection and Affordable Care Act,
the issue is whether Congress has the
power to compel non-participants
into the health insurance market, so
that they can then be regulated. It’s
a novel question, and no precedent
governs the Court’s decision. During
its oral argument, the federal government
asserted that every person
is an “actuarial reality” whose current
existence and eventual mortality
creates a statistically measurable
insurance risk.
By that theory, everyone is inescapably
a “participant” in the health
insurance market and therefore subject
to federal regulation. Such metaphysical
abstraction threatens not
merely to further stretch, but finally
to break the Framers’ structural design
that for 225 years has preserved
individual liberty and served as a
check on unlimited federal power.
— David J. Porter is an attorney
with Buchanan Ingersoll &
Rooney PC and a trustee of Grove
City College. The opinions expressed
by the author are his own.