Article I, Section 8, Clause 3:
[The Congress shall have Power . . . ] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; . . .
The Commerce Clause serves a two-fold purpose: it is the direct source of the most important powers that the Federal Government exercises in peacetime, and, except for the due process and equal protection clauses of the Fourteenth Amendment, it is the most important limitation imposed by the Constitution on the exercise of state power. The latter, restrictive operation of the clause was long the more important one from the point of view of the constitutional lawyer. Of the approximately 1400 cases that reached the Supreme Court under the clause prior to 1900, the overwhelming proportion stemmed from state legislation.1 The result was that, generally, the guiding lines in construction of the clause were initially laid down in the context of curbing state power rather than in that of its operation as a source of national power. The consequence of this historical progression was that the word
commerce came to dominate the clause while the word
regulate remained in the background. The so-called
constitutional revolution of the 1930s, however, brought the latter word to its present prominence.
Definition of Terms
The etymology of the word
commerce2 carries the primary meaning of traffic, of transporting goods across state lines for sale. This possibly narrow constitutional conception was rejected by Chief Justice Marshall in Gibbons v. Ogden,3 which remains one of the seminal cases dealing with the Constitution. The case arose because of a monopoly granted by the New York legislature on the operation of steam-propelled vessels on its waters, a monopoly challenged by Gibbons, who transported passengers from New Jersey to New York pursuant to privileges granted by an act of Congress.4 The New York monopoly was not in conflict with the congressional regulation of commerce, argued the monopolists, because the vessels carried only passengers between the two states and were thus not engaged in traffic, in
commerce in the constitutional sense.
The subject to be regulated is commerce, the Chief Justice wrote.
The counsel for the appellee would limit it to traffic, to buying and selling, or the interchange of commodities, and do not admit that it comprehends navigation. This would restrict a general term, applicable to many objects, to one of its significations. Commerce, undoubtedly, is traffic, but it is something more—it is intercourse.5 The term, therefore, included navigation, a conclusion that Marshall also supported by appeal to general understanding, to the prohibition in Article I, § 9, against any preference being given
by any regulation of commerce or revenue, to the ports of one State over those of another, and to the admitted and demonstrated power of Congress to impose embargoes.6
Marshall qualified the word
intercourse with the word
commercial, thus retaining the element of monetary transactions.7 But, today,
commerce in the constitutional sense, and hence
interstate commerce, covers every species of movement of persons and things, whether for profit or not, across state lines,8 every species of communication, every species of transmission of intelligence, whether for commercial purposes or otherwise,9 every species of commercial negotiation that will involve sooner or later an act of transportation of persons or things, or the flow of services or power, across state lines.10
There was a long period in the Court's history when a majority of the Justices, seeking to curb the regulatory powers of the Federal Government by various means, held that certain things were not encompassed by the Commerce Clause because they were neither interstate commerce nor bore a sufficient nexus to interstate commerce. Thus, at one time, the Court held that mining or manufacturing, even when the product would move in interstate commerce, was not reachable under the Commerce Clause;11 it held insurance transactions carried on across state lines not to be commerce,12 and that exhibitions of baseball between professional teams that travel from state to state were not in commerce.13 Similarly, it held that the Commerce Clause was not applicable to the making of contracts for the insertion of advertisements in periodicals in another state14 or to the making of contracts for personal services to be rendered in another state.15
Later decisions either have overturned or have undermined all of these holdings. The gathering of news by a press association and its transmission to client newspapers are interstate commerce.16 The activities of Group Health Association, Inc., which serves only its own members, are
trade and capable of becoming interstate commerce;17 the business of insurance when transacted between an insurer and an insured in different states is interstate commerce.18 But most important of all there was the development of, or more accurately the return to,19 the rationales by which manufacturing,20 mining,21 business transactions,22 and the like, which are antecedent to or subsequent to a move across state lines, are conceived to be part of an integrated commercial whole and therefore subject to the reach of the commerce power.
Among the Several States
Continuing in Gibbons v. Ogden, Chief Justice Marshall observed that the phrase
among the several States was
not one which would probably have been selected to indicate the completely interior traffic of a state. It must therefore have been selected to exclude
the exclusively internal commerce of a state. Although, of course, the phrase
may very properly be restricted to that commerce which concerns more states than one, it is obvious that
[c]ommerce among the states, cannot stop at the external boundary line of each state, but may be introduced into the interior. The Chief Justice then succinctly stated the rule, which, though restricted in some periods, continues to govern the interpretation of the clause.
The genius and character of the whole government seem to be, that its action is to be applied to all the external concerns of the nation, and to those internal concerns which affect the states generally; but not to those which are completely within a particular state, which do not affect other states, and with which it is not necessary to interfere, for the purpose of executing some of the general powers of the government.23
Recognition of an
exclusively internal commerce of a state, or
intrastate commerce in today's terms, was regarded as setting out an area of state concern that Congress was precluded from reaching.24 Although these cases seemingly visualized Congress’s power arising only when there was an actual crossing of state boundaries, this view ignored Marshall's equation of intrastate commerce that affects other states or with which it is necessary to interfere in order to effectuate congressional power with those actions which are purely interstate. This equation came back into its own, both with the Court's stress on the
current of commerce bringing each element in the current within Congress’s regulatory power,25 with the emphasis on the interrelationships of industrial production to interstate commerce26 but especially with the emphasis that even minor transactions have an effect on interstate commerce27 and that the cumulative effect of many minor transactions with no separate effect on interstate commerce, when they are viewed as a class, may be sufficient to merit congressional regulation.28
Commerce among the states must, of necessity, be commerce with[in] the states. . . . The power of congress, then, whatever it may be, must be exercised within the territorial jurisdiction of the several states.29
We are now arrived at the inquiry—what is this power? continued the Chief Justice.
It is the power to regulate; that is, to prescribe the rule by which commerce is to be governed. This power, like all others vested in congress, is complete in itself, may be exercised to its utmost extent, and acknowledges no limitations, other than are prescribed in the constitution . . . If, as has always been understood, the sovereignty of congress, though limited to specified objects, is plenary as to those objects, the power over commerce with foreign nations, and among the several states, is vested in Congress as absolutely as it would be in a single government, having in its constitution the same restrictions on the exercise of the power as are found in the constitution of the United States.30
Of course, the power to regulate commerce is the power to prescribe conditions and rules for the carrying-on of commercial transactions, the keeping-free of channels of commerce, the regulating of prices and terms of sale. Even if the clause granted only this power, the scope would be wide, but it extends to include many more purposes than these.
Congress can certainly regulate interstate commerce to the extent of forbidding and punishing the use of such commerce as an agency to promote immorality, dishonesty, or the spread of any evil or harm to the people of other states from the state of origin. In doing this, it is merely exercising the police power, for the benefit of the public, within the field of interstate commerce.31 Thus, in upholding a federal statute prohibiting the shipment in interstate commerce of goods made with child labor, not because the goods were intrinsically harmful but in order to extirpate child labor, the Court said:
It is no objection to the assertion of the power to regulate commerce that its exercise is attended by the same incidents which attend the exercise of the police power of the states.32
The power has been exercised to enforce majority conceptions of morality,33 to ban racial discrimination in public accommodations,34 and to protect the public against evils both natural and contrived by people.35 The power to regulate interstate commerce is, therefore, rightly regarded as the most potent grant of authority in section 8.
Federalism Limits on Exercise of Commerce Power
As is recounted below, prior to reconsideration of the federal commerce power in the 1930s, the Court in effect followed a doctrine of
dual federalism, under which Congress’s power to regulate much activity depended on whether it had a
direct rather than an
indirect effect on interstate commerce.36 When the restrictive interpretation was swept away during and after the New Deal, the question of federalism limits respecting congressional regulation of private activities became moot. However, in a number of instances the states engaged in commercial activities that would be regulated by federal legislation if the enterprise were privately owned, and the Court easily sustained application of federal law to these state proprietary activities.37 However, as Congress began to extend regulation to state governmental activities, the judicial response was inconsistent and wavering.38 Although the Court may shift again to constrain federal power on federalism grounds, at the present time the rule is that Congress lacks authority under the Commerce Clause to regulate the states as states in some circumstances, namely, when the federal statutory provisions
commandeer a state's legislative or executive authority in order to implement a regulatory program.39
Congressional Regulation of Commerce as Traffic
The Sherman Act: Sugar Trust Case
Congress’s chief effort to regulate commerce in the primary sense of
traffic is embodied in the Sherman Antitrust Act of 1890, the opening section of which declares
every contract, combination in the form of trust or otherwise, or
conspiracy in restraint of trade and commerce among the several States, or with foreign nations to be
illegal, while the second section makes it a misdemeanor for anybody to
monopolize or attempt to monopolize any part of such commerce.40 The act was passed to curb the growing tendency to form industrial combinations, and the first case to reach the Court under it was the famous Sugar Trust Case, United States v. E. C. Knight Co.41 Here the government asked for the cancellation of certain agreements, whereby the American Sugar Refining Company, had
acquired, it was conceded,
nearly complete control of the manufacture of refined sugar in the United States.
The question of the validity of the Act was not expressly discussed by the Court but was subordinated to that of its proper construction. The Court, in pursuance of doctrines of constitutional law then dominant with it, turned the Act from its intended purpose and destroyed its effectiveness for several years, as that of the Interstate Commerce Act was being contemporaneously impaired. The following passage early in Chief Justice Fuller's opinion for the Court sets forth the conception of the federal system that controlled the decision:
It is vital that the independence of the commercial power and of the police power, and the delimination between them, however sometimes perplexing, should always be recognized and observed, for while the one furnishes the strongest bond of union, the other is essential to the preservation of the autonomy of the States as required by our dual form of government; and acknowledged evils, however grave and urgent they may appear to be, had better be borne, than the risk be run, in the effort to suppress them, of more serious consequences by resort to expedients of even doubtful constitutionality.42
In short, what was needed, the Court felt, was a hard and fast line between the two spheres of power, and, in a series of propositions, it endeavored to lay down such a line: (1) production is always local, and under the exclusive domain of the states; (2) commerce among the states does not begin until goods
commence their final movement from their State of origin to that of their destination; (3) the sale of a product is merely an incident of its production and, while capable of
bringing the operation of commerce into play, affects it only incidentally; (4) such restraint as would reach commerce, as above defined, in consequence of combinations to control production
in all its forms, would be
indirect, however inevitable and whatever its extent, and as such beyond the purview of the Act.43 Applying this reasoning to the case before it, the Court proceeded:
The object [of the combination] was manifestly private gain in the manufacture of the commodity, but not through the control of interstate or foreign commerce. It is true that the bill alleged that the products of these refineries were sold and distributed among the several States, and that all the companies were engaged in trade or commerce with the several States and with foreign nations; but this was no more than to say that trade and commerce served manufacture to fulfill its function.
Sugar was refined for sale, and sales were probably made at Philadelphia for consumption, and undoubtedly for resale by the first purchasers throughout Pennsylvania and other States, and refined sugar was also forwarded by the companies to other States for sale. Nevertheless it does not follow that an attempt to monopolize, or the actual monopoly of, the manufacture was an attempt, whether executory or consummated, to monopolize commerce, even though, in order to dispose of the product, the instrumentality of commerce was necessarily invoked. There was nothing in the proofs to indicate any intention to put a restraint upon trade or commerce, and the fact, as we have seen, that trade or commerce might be indirectly affected was not enough to entitle complainants to a decree.44
Sherman Act Revived
Four years later came Addyston Pipe and Steel Co. v. United States,45 in which the Antitrust Act was successfully applied to an industrial combination for the first time. The agreements in the case, the parties to which were manufacturing concerns, effected a division of territory among them, and so involved, it was held, a
direct restraint on the distribution and hence of the transportation of the products of the contracting firms. The holding, however, did not question the doctrine of the earlier case, which in fact continued substantially undisturbed until 1905, when Swift & Co. v. United States46 was decided.
The Current of Commerce Concept: The Swift Case
Defendants in Swift were some thirty firms engaged in Chicago and other cities in the business of buying livestock in their stockyards, in converting it at their packing houses into fresh meat, and in the sale and shipment of such fresh meat to purchasers in other states. The charge against them was that they had entered into a combination to refrain from bidding against each other in the local markets, to fix the prices at which they would sell, to restrict shipments of meat, and to do other forbidden acts. The case was appealed to the Supreme Court on defendants' contention that certain of the acts complained of were not acts of interstate commerce and so did not fall within a valid reading of the Sherman Act. The Court, however, sustained the government on the ground that the
scheme as a whole came within the act, and that the local activities alleged were simply part and parcel of this general scheme.47
Referring to the purchase of livestock at the stockyards, the Court, speaking by Justice Holmes, said:
Commerce among the States is not a technical legal conception, but a practical one, drawn from the course of business. When cattle are sent for sale from a place in one State, with the expectation that they will end their transit, after purchase, in another, and when in effect they do so, with only the interruption necessary to find a purchaser at the stockyards, and when this is a typical, constantly recurring course, the current thus existing is a current of commerce among the States, and the purchase of the cattle is a part and incident of such commerce.48 Likewise the sales alleged of fresh meat at the slaughtering places fell within the general design. Even if they imported a technical passing of title at the slaughtering places, they also imported that the sales were to persons in other states, and that shipments to such states were part of the transaction.49 Thus, sales of the type that in the Sugar Trust case were thrust to one side as immaterial from the point of view of the law, because they enabled the manufacturer
to fulfill its function, were here treated as merged in an interstate commerce stream.
Thus, the concept of commerce as trade, that is, as traffic, again entered the constitutional law picture, with the result that conditions directly affecting interstate trade could not be dismissed on the ground that they affected interstate commerce, in the sense of interstate transportation, only
indirectly. Lastly, the Court added these significant words:
But we do not mean to imply that the rule which marks the point at which state taxation or regulation becomes permissible necessarily is beyond the scope of interference by Congress in cases where such interference is deemed necessary for the protection of commerce among the States.50 That is to say, the line that confines state power from one side does not always confine national power from the other. Even though the line accurately divides the subject matter of the complementary spheres, national power is always entitled to take on the additional extension that is requisite to guarantee its effective exercise and is furthermore supreme.
The Danbury Hatters Case
In this respect, the Swift case only states what the Shreveport case was later to declare more explicitly, and the same may be said of an ensuing series of cases in which combinations of employees engaged in such intrastate activities as manufacturing, mining, building, construction, and the distribution of poultry were subjected to the penalties of the Sherman Act because of the effect or intended effect of their activities on interstate commerce.51
Stockyards and Grain Futures Acts
In 1921, Congress passed the Packers and Stockyards Act,52 whereby the business of commission men and livestock dealers in the chief stockyards of the country was brought under national supervision, and in the year following it passed the Grain Futures Act,53 whereby exchanges dealing in grain futures were subjected to control. The decisions of the Court sustaining these measures both built directly upon the Swift case.
In Stafford v. Wallace,54 which involved the former act, Chief Justice Taft, speaking for the Court, said:
The object to be secured by the act is the free and unburdened flow of livestock from the ranges and farms of the West and Southwest through the great stockyards and slaughtering centers on the borders of that region, and thence in the form of meat products to the consuming cities of the country in the Middle West and East, or, still as livestock, to the feeding places and fattening farms in the Middle West or East for further preparation for the market.55 The stockyards, therefore, were
not a place of rest or final destination. They were
but a throat through which the current flows, and the sales there were not
merely local transactions. . . . [T]hey do not stop the flow . . . but, on the contrary, [are] indispensable to its continuity.56
In Chicago Board of Trade v. Olsen,57 involving the Grain Futures Act, the same course of reasoning was repeated. Speaking of Swift, Chief Justice Taft remarked:
That case was a milestone in the interpretation of the commerce clause of the Constitution. It recognized the great changes and development in the business of this vast country and drew again the dividing line between interstate and intrastate commerce where the Constitution intended it to be. It refused to permit local incidents of a great interstate movement, which taken alone are intrastate, to characterize the movement as such.58
Of special significance, however, is the part of the opinion devoted to showing the relation between future sales and cash sales, and hence the effect of the former upon the interstate grain trade. The test, said the Chief Justice, was furnished by the question of price.
The question of price dominates trade between the States. Sales of an article which affect the country-wide price of the article directly affect the country-wide commerce in it.59 Thus, a practice that demonstrably affects prices would also affect interstate trade
directly, and so, even though local in itself, would fall within the regulatory power of Congress. In the following passage, indeed, Chief Justice Taft whittled down, in both cases, the
direct-indirect formula to the vanishing point:
Whatever amounts to more or less constant practice, and threatens to obstruct or unduly to burden the freedom of interstate commerce is within the regulatory power of Congress under the commerce clause, and it is primarily for Congress to consider and decide the fact of the danger to meet it. This court will certainly not substitute its judgment for that of Congress in such a matter unless the relation of the subject to interstate commerce and its effect upon it are clearly nonexistent.60
It was in reliance on the doctrine of these cases that Congress first set to work to combat the Depression in 1933 and the years immediately following. But, in fact, much of its legislation at this time marked a wide advance upon the measures just passed in review. They did not stop with regulating traffic among the states and the instrumentalities thereof; they also attempted to govern production and industrial relations in the field of production. Confronted with this expansive exercise of Congress’s power, the Court again deemed itself called upon to define a limit to the commerce power that would save to the states their historical sphere, and especially their customary monopoly of legislative power in relation to industry and labor management.
Securities and Exchange Commission
Not all antidepression legislation, however, was of this new approach. The Securities Exchange Act of 193461 and the Public Utility Company Act (
Wheeler-Rayburn Act) of 193562 were not. The former created the Securities and Exchange Commission and authorized it to lay down regulations designed to keep dealing in securities honest and aboveboard and closed the channels of interstate commerce and the mails to dealers refusing to register under the act. The latter required the companies governed by it to register with the Securities and Exchange Commission and to inform it concerning their business, organization, and financial structure, all on pain of being prohibited use of the facilities of interstate commerce and the mails; while, by § 11, the so-called
death sentence clause, the same act closed the channels of interstate communication after a certain date to certain types of public utility companies whose operations, Congress found, were calculated chiefly to exploit the investing and consuming public. All these provisions have been sustained,63 with the Court relying principally on Gibbons v. Ogden.
Congressional Regulation of Production and Industrial Relations: Antidepression Legislation
In the words of Chief Justice Hughes, spoken in a case decided a few days after President Franklin D. Roosevelt's first inauguration, the problem then confronting the new Administration was clearly set forth.
When industry is grievously hurt, when producing concerns fail, when unemployment mounts and communities dependent upon profitable production are prostrated, the wells of commerce go dry.64
National Industrial Recovery Act
The initial effort of Congress to deal with this situation was embodied in the National Industrial Recovery Act of June 16, 1933.65 The opening section of the Act asserted the existence of
a national emergency productive of widespread unemployment and disorganization of industry which burdened
interstate and foreign commerce, affected
the public welfare, and undermined
the standards of living of the American people. To affect the removal of these conditions the President was authorized, upon the application of industrial or trade groups, to approve
codes of fair competition, or to prescribe the same in cases where such applications were not duly forthcoming. Among other things such codes, of which eventually more than 700 were promulgated, were required to lay down rules of fair dealing with customers and to furnish labor certain guarantees respecting hours, wages and collective bargaining. For the time being, business and industry were to be cartelized on a national scale.
In A. L. A. Schechter Poultry Corp. v. United States,66 one of these codes, the Live Poultry Code, was pronounced unconstitutional. Although it was conceded that practically all poultry handled by the Schechters came from outside the State, and hence via interstate commerce, the Court held, nevertheless, that once the chickens came to rest in the Schechter's wholesale market, interstate commerce in them ceased. The act, however, also purported to govern business activities which
affected interstate commerce. This, Chief Justice Hughes held, must be taken to mean
directly affect such commerce:
the distinction between direct and indirect effects of intrastate transactions upon interstate commerce must be recognized as a fundamental one, essential to the maintenance of our constitutional system. Otherwise, . . . there would be virtually no limit to the federal power and for all practical purposes we should have a completely centralized government.67 In short, the case was governed by the ideology of the Sugar Trust case, which was not mentioned in the Court's opinion.68
Agricultural Adjustment Act
Congress’s second attempt to combat the Depression was the Agricultural Adjustment Act of 1933.69 As is pointed out elsewhere, the measure was set aside as an attempt to regulate production, a subject held to be
prohibited to the United States by the Tenth Amendment.70
Bituminous Coal Conservation Act
The third measure to be disallowed was the Guffey-Snyder Bituminous Coal Conservation Act of 1935.71 The statute created machinery for the regulation of the price of soft coal, both that sold in interstate commerce and that sold
locally, and other machinery for the regulation of hours of labor and wages in the mines. The clauses of the act dealing with these two different matters were declared by the act itself to be separable so that the invalidity of the one set would not affect the validity of the other, but this strategy was ineffectual. A majority of the Court, speaking by Justice Sutherland, held that the act constituted one connected scheme of regulation, which, because it invaded the reserved powers of the states over conditions of employment in productive industry, violated the Constitution.72 Justice Sutherland's opinion set out from Chief Justice Hughes' assertion in the Schechter case of the
fundamental character of the distinction between
indirect effects, that is to say, from the doctrine of the Sugar Trust case. It then proceeded:
Much stress is put upon the evils which come from the struggle between employers and employees over the matter of wages, working conditions, the right of collective bargaining, etc., and the resulting strikes, curtailment and irregularity of production and effect on prices; and it is insisted that interstate commerce is greatly affected thereby. But . . . the conclusive answer is that the evils are all local evils over which the Federal Government has no legislative control. The relation of employer and employee is a local relation. At common law, it is one of the domestic relations. The wages are paid for the doing of local work. Working conditions are obviously local conditions. The employees are not engaged in or about commerce, but exclusively in producing a commodity. And the controversies and evils, which it is the object of the act to regulate and minimize, are local controversies and evils affecting local work undertaken to accomplish that local result. Such effect as they may have upon commerce, however extensive it may be, is secondary and indirect. An increase in the greatness of the effect adds to its importance. It does not alter its character.73
Railroad Retirement Act
Still pursuing the idea of protecting commerce and the labor engaged in it concurrently, Congress, by the Railroad Retirement Act of June 27, 1934,74 ordered the compulsory retirement of superannuated employees of interstate carriers, and provided that they be paid pensions out of a fund comprising compulsory contributions from the carriers and their present and future employees. In Railroad Retirement Bd. v. Alton R.R.,75 however, a closely divided Court held this legislation to be in excess of Congress’s power to regulate commerce and contrary to the Due Process Clause of the Fifth Amendment. Justice Roberts wrote for the majority:
We feel bound to hold that a pension plan thus imposed is in no proper sense a regulation of the activity of interstate transportation. It is an attempt for social ends to impose by sheer fiat noncontractual incidents upon the relation of employer and employee, not as a rule or regulation of commerce and transportation between the States, but as a means of assuring a particular class of employees against old age dependency. This is neither a necessary nor an appropriate rule or regulation affecting the due fulfillment of the railroads' duty to serve the public in interstate transportation.76
Chief Justice Hughes, speaking for the dissenters, contended, on the contrary, that
the morale of the employees [had] an important bearing upon the efficiency of the transportation service. He added:
The fundamental consideration which supports this type of legislation is that industry should take care of its human wastage, whether that is due to accident or age. That view cannot be dismissed as arbitrary or capricious. It is a reasoned conviction based upon abundant experience. The expression of that conviction in law is regulation. When expressed in the government of interstate carriers, with respect to their employees likewise engaged in interstate commerce, it is a regulation of that commerce. As such, so far as the subject matter is concerned, the commerce clause should be held applicable.77 Under subsequent legislation, an excise is levied on interstate carriers and their employees, while by separate but parallel legislation a fund is created in the Treasury out of which pensions are paid along the lines of the original plan. The constitutionality of this scheme appears to be taken for granted in Railroad Retirement Board v. Duquesne Warehouse Co.78
National Labor Relations Act
The case in which the Court reduced the distinction between
indirect effects to the vanishing point and thereby placed Congress in the position to regulate productive industry and labor relations in these industries was NLRB v. Jones & Laughlin Steel Corporation.79 Here the statute involved was the National Labor Relations Act of 1935,80 which declared the right of workers to organize, forbade unlawful employer interference with this right, established procedures by which workers could choose exclusive bargaining representatives with which employers were required to bargain, and created a board to oversee all these processes.81
The Court, speaking through Chief Justice Hughes, upheld the Act and found the corporation to be subject to the Act.
The close and intimate effect, he said,
which brings the subject within the reach of federal power may be due to activities in relation to productive industry although the industry when separately viewed is local. Nor will it do to say that such effect is
indirect. Considering defendant's
far-flung activities, the effect of strife between it and its employees
would be immediate and [it] might be catastrophic. We are asked to shut our eyes to the plainest facts of our national life and to deal with the question of direct and indirect effects in an intellectual vacuum. . . . When industries organize themselves on a national scale, making their relation to interstate commerce the dominant factor in their activities, how can it be maintained that their industrial labor relations constitute a forbidden field into which Congress may not enter when it is necessary to protect interstate commerce from the paralyzing consequences of industrial war? We have often said that interstate commerce itself is a practical conception. It is equally true that interferences with that commerce must be appraised by a judgment that does not ignore actual experience.82
While the Act was thus held to be within the constitutional powers of Congress in relation to a productive concern because the interruption of its business by strike
might be catastrophic, the decision was forthwith held to apply also to two minor concerns,83 and in a later case the Court stated specifically that the smallness of the volume of commerce affected in any particular case is not a material consideration.84 Subsequently, the act was declared to be applicable to a local retail auto dealer on the ground that he was an integral part of the manufacturer's national distribution system,85 to a labor dispute arising during alteration of a county courthouse because one-half of the cost – $225,000—was attributable to materials shipped from out-of-state,86 and to a dispute involving a retail distributor of fuel oil, all of whose sales were local, but who obtained the oil from a wholesaler who imported it from another state.87
[t]his Court has consistently declared that in passing the National Labor Relations Act, Congress intended to and did vest in the Board the fullest jurisdictional breadth constitutionally permissible under the Commerce Clause.88 Thus, the Board has formulated jurisdictional standards which assume the requisite effect on interstate commerce from a prescribed dollar volume of business and these standards have been implicitly approved by the Court.89
Fair Labor Standards Act
In 1938, Congress enacted the Fair Labor Standards Act. The measure prohibited not only the shipment in interstate commerce of goods manufactured by employees whose wages are less than the prescribed maximum but also the employment of workmen in the production of goods for such commerce at other than the prescribed wages and hours. Interstate commerce was defined by the act to mean
trade, commerce, transportation, transmission, or communication among the several States or from any State to any place outside thereof.
It was further provided that
for the purposes of this act an employee shall be deemed to have been engaged in the production of goods [that is, for interstate commerce] if such employee was employed . . . in any process or occupation directly essential to the production thereof in any State.90 Sustaining an indictment under the act, a unanimous Court, speaking through Chief Justice Stone, said:
The motive and purpose of the present regulation are plainly to make effective the congressional conception of public policy that interstate commerce should not be made the instrument of competition in the distribution of goods produced under substandard labor conditions, which competition is injurious to the commerce and to the States from and to which the commerce flows.91 In support of the decision, the Court invoked Chief Justice Marshall's reading of the Necessary and Proper Clause in McCulloch v. Maryland and his reading of the Commerce Clause in Gibbons v. Ogden.92 Objections purporting to be based on the Tenth Amendment were met from the same point of view:
Our conclusion is unaffected by the Tenth Amendment which provides: ‘The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.’ The amendment states but a truism that all is retained which has not been surrendered. There is nothing in the history of its adoption to suggest that it was more than declaratory of the relationship between the national and State governments as it had been established by the Constitution before the amendment or that its purpose was other than to allay fears that the new National Government might seek to exercise powers not granted, and that the States might not be able to exercise fully their reserved powers.93
Subsequent decisions of the Court took a very broad view of which employees should be covered by the Act,94 and in 1949 Congress to some degree narrowed the permissible range of coverage and disapproved some of the Court's decisions.95 But, in 1961,96 with extensions in 1966,97 Congress itself expanded by several million persons the coverage of the Act, introducing the
enterprise concept by which all employees in a business producing anything in commerce or affecting commerce were brought within the protection of the minimum wage-maximum hours standards.98 The
enterprise concept was sustained by the Court in Maryland v. Wirtz.99 Justice Harlan for a unanimous Court on this issue found the extension entirely proper on the basis of two theories: one, a business' competitive position in commerce is determined in part by all its significant labor costs, and not just those costs attributable to its employees engaged in production in interstate commerce, and, two, labor peace and thus smooth functioning of interstate commerce was facilitated by the termination of substandard labor conditions affecting all employees and not just those actually engaged in interstate commerce.100
Agricultural Marketing Agreement Act
After its initial frustrations, Congress returned to the task of bolstering agriculture by passing the Agricultural Marketing Agreement Act of June 3, 1937,101 authorizing the Secretary of Agriculture to fix the minimum prices of certain agricultural products, when the handling of such products occurs
in the current of interstate or foreign commerce or . . . directly burdens, obstructs or affects interstate or foreign commerce in such commodity or product thereof. In United States v. Wrightwood Dairy Co.,102 the Court sustained an order of the Secretary of Agriculture fixing the minimum prices to be paid to producers of milk in the Chicago
marketing area. The dairy company demurred to the regulation on the ground it applied to milk produced and sold intrastate. Sustaining the order, the Court said:
Congress plainly has power to regulate the price of milk distributed through the medium of interstate commerce . . . and it possesses every power needed to make that regulation effective. The commerce power is not confined in its exercise to the regulation of commerce among the States. It extends to those activities intrastate which so affect interstate commerce, or the exertion of the power of Congress over it, as to make regulation of them appropriate means to the attainment of a legitimate end, the effective execution of the granted power to regulate interstate commerce. The power of Congress over interstate commerce is plenary and complete in itself, may be exercised to its utmost extent, and acknowledges no limitations other than are prescribed in the Constitution. . . . It follows that no form of State activity can constitutionally thwart the regulatory power granted by the commerce clause to Congress. Hence the reach of that power extends to those intrastate activities which in a substantial way interfere with or obstruct the exercise of the granted power.103
In Wickard v. Filburn,104 the Court sustained a still deeper penetration by Congress into the field of production. As amended by the act of 1941, the Agricultural Adjustment Act of 1938105 regulated production even when not intended for commerce but wholly for consumption on the producer's farm. Sustaining this extension of the act, the Court pointed out that the effect of the statute was to support the market.
It can hardly be denied that a factor of such volume and variability as home-consumed wheat would have a substantial influence on price and market conditions. This may arise because being in marketable condition such wheat overhangs the market and, if induced by rising prices, tends to flow into the market and check price increases. But if we assume that it is never marketed, it supplies a need of the man who grew it which would otherwise be reflected by purchases in the open market. Home-grown wheat in this sense competes with wheat in commerce. The stimulation of commerce is a use of the regulatory function quite as definitely as prohibitions or restrictions thereon. This record leaves us in no doubt that Congress may properly have considered that wheat consumed on the farm grown, if wholly outside the scheme of regulation, would have a substantial effect in defeating and obstructing its purpose to stimulate trade therein at increased prices.106 And, it elsewhere stated
that questions of the power of Congress are not to be decided by reference to any formula which would give controlling force to nomenclature such as ‘production’ and ‘indirect’ and foreclose consideration of the actual effects of the activity in question upon interstate commerce. . . . The Court's recognition of the relevance of the economic effects in the application of the Commerce Clause . . . has made the mechanical application of legal formulas no longer feasible.107
The Commerce Clause as a Source of National Police Power
The Court has several times expressly noted that Congress’s exercise of power under the Commerce Clause is akin to the police power exercised by the states.108 It should follow, therefore, that Congress may achieve results unrelated to purely commercial aspects of commerce, and this result in fact has often been accomplished. Paralleling and contributing to this movement is the virtual disappearance of the distinction between interstate and intrastate commerce.
Not only has there been legislative advancement and judicial acquiescence in Commerce Clause jurisprudence, but the melding of the Nation into one economic union has been more than a little responsible for the reach of Congress’s power.
The volume of interstate commerce and the range of commonly accepted objects of government regulation have . . . expanded considerably in the last 200 years, and the regulatory authority of Congress has expanded along with them. As interstate commerce has become ubiquitous, activities once considered purely local have come to have effects on the national economy, and have accordingly come within the scope of Congress’s commerce power.109
Congress’s commerce power has been characterized as having three, or sometimes four, interrelated principles of decision, some old, some of recent vintage. The Court in 1995 described
three broad categories of activity that Congress may regulate under its commerce power. First, Congress may regulate the use of the channels of interstate commerce. Second, Congress is empowered to regulate and protect the instrumentalities of interstate commerce, or persons or things in interstate commerce, even though the threat may come only from intrastate activities. Finally, Congress’s commerce authority includes the power to regulate those activities having a substantial relation to interstate commerce, i.e., those activities that substantially affect interstate commerce.110
An example of the first category, regulating to protect the channels and instrumentalities of interstate commerce, is Pierce County v. Guillen,111 in which the Court upheld a prohibition on the use in state or federal court proceedings of highway data required to be collected by states on the basis that
Congress could reasonably believe that adopting a measure eliminating an unforeseen side effect of the information-gathering requirement . . . would result in more diligent efforts [by states] to collect the relevant information.
Under the second category, which attaches to instrumentalities112 and persons crossing of state lines, Congress has validly legislated to protect interstate travelers from harm, to prevent such travelers from being deterred in the exercise of interstate traveling, and to prevent them from being burdened. Many of the 1964 public accommodations law applications have been premised on the point that larger establishments do serve interstate travelers and that even small stores, restaurants, and the like may serve interstate travelers, and, therefore, it is permissible to regulate them to prevent or deter racial discrimination.113
Commerce regulation under this second category is not limited to persons who cross state lines but can also extend to an object that will or has crossed state lines, and the regulation of a purely intrastate activity may be premised on the presence of such object. Thus, the public accommodations law reached small establishments that served food and other items that had been purchased from interstate channels.114 Congress has validly penalized convicted felons, who had no other connection to interstate commerce, for possession or receipt of firearms, which had been previously transported in interstate commerce independently of any activity by the two felons.115
This reach is not of recent origin. In United States v. Sullivan,116 the Court sustained a conviction of misbranding under the Federal Food, Drug and Cosmetic Act. Sullivan, a Columbus, Georgia druggist, had bought a properly labeled 1000-tablet bottle of sulfathiazole from an Atlanta wholesaler. The bottle had been shipped to the Atlanta wholesaler by a Chicago supplier six months earlier. Three months after Sullivan received the bottle, he made two retail sales of 12 tablets each, placing the tablets in boxes not labeled in strict accordance with the law. Upholding the conviction, the Court concluded that there was no question of
the constitutional power of Congress under the Commerce Clause to regulate the branding of articles that have completed an interstate shipment and are being held for future sales in purely local or intrastate commerce.117
Under the third category, Congress’s power reaches not only transactions or actions that occasion the crossing of state or national boundaries but extends as well to activities that, though local,
affect commerce; this power derives from the Commerce Clause enhanced by the Necessary and Proper Clause. The seminal case, of course, is Wickard v. Filburn,118 sustaining federal regulation of a crop of wheat grown on a farm and intended solely for home consumption. The premise was that if it were never marketed, it supplied a need otherwise to be satisfied only in the market, and that if prices rose it might be induced onto the market.
Even activity that is purely intrastate in character may be regulated by Congress, where the activity, combined with like conduct by others similarly situated, affects commerce among the States or with foreign nations.119 Coverage under federal labor and wage-and-hour laws after the 1930s showed the reality of this doctrine.120
In upholding federal regulation of strip mining, the Court demonstrated the breadth of the
affects standard. One case dealt with statutory provisions designed to preserve
prime farmland. The trial court had determined that the amount of such land disturbed annually amounted to 0.006% of the total prime farmland acreage in the Nation and, thus, that the impact on commerce was
trivial. Disagreeing, the Court said:
A court may invalidate legislation enacted under the Commerce Clause only if it is clear that there is no rational basis for a congressional finding that the regulated activity affects interstate commerce, or that there is no reasonable connection between the regulatory means selected and the asserted ends.121 Moreover,
[t]he pertinent inquiry therefore is not how much commerce is involved but whether Congress could rationally conclude that the regulated activity affects interstate commerce.122
In a companion case, the Court reiterated that
[t]he denomination of an activity as a `local' or `intrastate' activity does not resolve the question whether Congress may regulate it under the Commerce Clause. As previously noted, the commerce power ‘extends to those activities intrastate which so affect interstate commerce, or the exertion of the power of Congress over it, as to make regulation of them appropriate means to the attainment of a legitimate end, the effective execution of the granted power to regulate interstate commerce.’123 Judicial review is narrow. Congress’s determination of an
effect must be deferred to if it is rational, and Congress must have acted reasonably in choosing the means.124
Fourth, a still more potent engine of regulation has been the expansion of the class-of-activities standard, which began in the
affecting cases. In Perez v. United States,125 the Court sustained the application of a federal
loan-sharking law to a local culprit. The Court held that, although individual loan-sharking activities might be intrastate in nature, still it was within Congress’s power to determine that the activity was within a class the activities of which did affect interstate commerce, thus affording Congress the opportunity to regulate the entire class. Although the Perez Court and the congressional findings emphasized that loan-sharking was generally part of organized crime operating on a national scale and that loan-sharking was commonly used to finance organized crime's national operations, subsequent cases do not depend upon a defensible assumption of relatedness in the class.
Thus, the Court applied the federal arson statute to the attempted
torching of a defendant's two-unit apartment building. The Court merely pointed to the fact that the rental of real estate
unquestionably affects interstate commerce and that
the local rental of an apartment unit is merely an element of a much broader commercial market in real estate.126 The apparent test of whether aggregation of local activity can be said to affect commerce was made clear next in an antitrust context.127
In a case allowing the continuation of an antitrust suit challenging a hospital's exclusion of a surgeon from practice in the hospital, the Court observed that in order to establish the required jurisdictional nexus with commerce, the appropriate focus is not on the actual effects of the conspiracy but instead is on the possible consequences for the affected market if the conspiracy is successful. The required nexus in this case was sufficient because competitive significance is to be measured by a general evaluation of the impact of the restraint on other participants and potential participants in the market from which the surgeon was being excluded.128
Requirement that Regulation be Economic
In United States v. Lopez129 the Court, for the first time in almost sixty years,130 invalidated a federal law as exceeding Congress’s authority under the Commerce Clause. The statute made it a federal offense to possess a firearm within 1,000 feet of a school.131 The Court reviewed the doctrinal development of the Commerce Clause, especially the effects and aggregation tests, and reaffirmed that it is the Court's responsibility to decide whether a rational basis exists for concluding that a regulated activity sufficiently affects interstate commerce when a law is challenged.132 As noted previously, the Court evaluation started with a consideration of whether the legislation fell within the three broad categories of activity that Congress may regulate or protect under its commerce power: (1) use of the channels of interstate commerce, (2) the use of instrumentalities of interstate commerce, or (3) activities that substantially affect interstate commerce.133
Clearly, the Court said, the criminalized activity did not implicate the first two categories.134 As for the third, the Court found an insufficient connection. First, a wide variety of regulations of
intrastate economic activity has been sustained where an activity substantially affects interstate commerce. But the statute being challenged, the Court continued, was a criminal law that had nothing to do with
commerce or with
any sort of economic enterprise. Therefore, it could not be sustained under precedents
upholding regulations of activities that arise out of or are connected with a commercial transaction, which viewed in the aggregate, substantially affects interstate commerce.135 The provision did not contain a
jurisdictional element which would ensure, through case-by-case inquiry, that the firearm possession in question affects interstate commerce.136 The existence of such a section, the Court implied, would have saved the constitutionality of the provision by requiring a showing of some connection to commerce in each particular case.
Finally, the Court rejected the arguments of the government and of the dissent that there existed a sufficient connection between the offense and interstate commerce.137 At base, the Court's concern was that accepting the attenuated connection arguments presented would result in the evisceration of federalism.
Under the theories that the government presents . . . it is difficult to perceive any limitation on federal power, even in areas such as criminal law enforcement or education where States historically have been sovereign. Thus, if we were to accept the Government's arguments, we are hard pressed to posit any activity by an individual that Congress is without power to regulate.138
Whether Lopez bespoke a Court determination to police more closely Congress’s exercise of its commerce power, so that it would be a noteworthy case,139 or whether it was rather a
warning shot across the bow of Congress, urging more restraint in the exercise of power or more care in the drafting of laws, was not immediately clear. The Court's decision five years later in United States v. Morrison,140 however, suggests that stricter scrutiny of Congress’s commerce power exercises is the chosen path, at least for legislation that falls outside the area of economic regulation.141 The Court will no longer defer, via rational basis review, to every congressional finding of substantial effects on interstate commerce, but instead will examine the nature of the asserted nexus to commerce, and will also consider whether a holding of constitutionality is consistent with its view of the commerce power as being a limited power that cannot be allowed to displace all exercise of state police powers.
In Morrison the Court applied Lopez principles to invalidate a provision of the Violence Against Women Act (VAWA) that created a federal cause of action for victims of gender-motivated violence. Gender-motivated crimes of violence
are not, in any sense of the phrase, economic activity,142 the Court explained, and there was allegedly no precedent for upholding commerce-power regulation of intrastate activity that was not economic in nature. The provision, like the invalidated provision of the Gun-Free School Zones Act, contained no jurisdictional element tying the regulated violence to interstate commerce. Unlike the Gun-Free School Zones Act, the VAWA did contain
numerous congressional findings about the serious effects of gender-motivated crimes,143 but the Court rejected reliance on these findings.
The existence of congressional findings is not sufficient, by itself, to sustain the constitutionality of Commerce Clause legislation. . . . [The issue of constitutionality] is ultimately a judicial rather than a legislative question, and can be settled finally only by this Court.144
The problem with the VAWA findings was that they
relied heavily on the reasoning rejected in Lopez—the
but-for causal chain from the initial occurrence of crime . . . to every attenuated effect upon interstate commerce. As the Court had explained in Lopez, acceptance of this reasoning would eliminate the distinction between what is truly national and what is truly local, and would allow Congress to regulate virtually any activity, and basically any crime.145 Accordingly, the Court
reject[ed] the argument that Congress may regulate noneconomic, violent criminal conduct based solely on that conduct's aggregate effect on interstate commerce. Resurrecting the dual federalism dichotomy, the Court could find
no better example of the police power, which the Founders denied the National Government and reposed in the States, than the suppression of violent crime and vindication of its victims.146
Yet, the ultimate impact of these cases on Congress’s power over commerce may be limited. In Gonzales v. Raich,147 the Court reaffirmed an expansive application of Wickard v. Filburn, and signaled that its jurisprudence is unlikely to threaten the enforcement of broad regulatory schemes based on the Commerce Clause. In Raich, the Court considered whether the cultivation, distribution, or possession of marijuana for personal medical purposes pursuant to the California Compassionate Use Act of 1996 could be prosecuted under the federal Controlled Substances Act (CSA).148 The respondents argued that this class of activities should be considered as separate and distinct from the drug-trafficking that was the focus of the CSA, and that regulation of this limited non-commercial use of marijuana should be evaluated separately.
In Raich, the Court declined the invitation to apply Lopez and Morrison to select applications of a statute, holding that the Court would defer to Congress if there was a rational basis to believe that regulation of home-consumed marijuana would affect the market for marijuana generally. The Court found that there was a
rational basis to believe that diversion of medicinal marijuana into the illegal market would depress the price on the latter market.149 The Court also had little trouble finding that, even in application to medicinal marijuana, the CSA was an economic regulation. Noting that the definition of
the production, distribution, and consumption of commodities,150 the Court found that prohibiting the intrastate possession or manufacture of an article of commerce is a rational and commonly used means of regulating commerce in that product.151
The Court's decision also contained an intertwined but potentially separate argument that Congress had ample authority under the Necessary and Proper Clause to regulate the intrastate manufacture and possession of controlled substances, because failure to regulate these activities would undercut the ability of the government to enforce the CSA generally.152 The Court quoted language from Lopez that appears to authorize the regulation of such activities on the basis that they are an essential part of a regulatory scheme.153 Justice Scalia, in concurrence, suggested that this latter category of activities could be regulated under the Necessary and Proper Clause regardless of whether the activity in question was economic or whether it substantially affected interstate commerce.154
Activity Versus Inactivity
In National Federation of Independent Business (NFIB) v. Sebelius,155 the Court held that Congress did not have the authority under the Commerce Clause to impose a requirement compelling certain individuals to maintain a minimum level of health insurance (although, as discussed previously, the Court found such power to exist under the taxing power). Under this
individual mandate, failure to purchase health insurance may subject a person to a monetary penalty, administered through the tax code.156 By requiring that individuals purchase health insurance, the mandate prevents cost-shifting by those who would otherwise go without it. In addition, the mandate forces healthy individuals into the insurance risk pool, thus allowing insurers to subsidize the costs of covering the unhealthy individuals they are now required to accept.
Chief Justice Roberts, in a controlling opinion,157 suggested that Congress’s authority to regulate interstate commerce presupposes the existence of a commercial activity to regulate. Further, his opinion noted that the commerce power had been uniformly described in previous cases as involving the regulation of an
activity.158 The individual mandate, on the other hand, compels an individual to become active in commerce on the theory that the individual's inactivity affects interstate commerce. Justice Roberts suggested that regulation of individuals because they are doing nothing would result in an unprecedented expansion of congressional authority with few discernable limitations. While recognizing that most people are likely to seek health care at some point in their lives, Justice Roberts noted that there was no precedent for the argument that individuals who might engage in a commercial activity in the future could, on that basis, be regulated today.159 The Chief Justice similarly rejected the argument that the Necessary and Proper Clause could provide this additional authority. Rather than serving as a
incidental adjunct to the Commerce Clause, reliance on the Necessary and Proper Clause in this instance would, according to the Chief Justice, create a substantial expansion of federal authority to regulate persons not otherwise subject to such regulation.160
It had been generally established some time ago that Congress had power under the Commerce Clause to prohibit racial discrimination in the use of the channels of commerce.161 The power under the clause to forbid discrimination within the states was firmly and unanimously sustained by the Court when Congress in 1964 enacted a comprehensive measure outlawing discrimination because of race or color in access to public accommodations with a requisite connection to interstate commerce.162 Hotels and motels were declared covered—that is, declared to
affect commerce—if they provided lodging to transient guests; restaurants, cafeterias, and the like, were covered only if they served or offered to serve interstate travelers or if a substantial portion of the food which they served had moved in commerce.163 The Court sustained the Act as applied to a downtown Atlanta motel that did serve interstate travelers,164 to an out-of-the-way restaurant in Birmingham that catered to a local clientele but that had spent 46 percent of its previous year's out-go on meat from a local supplier who had procured it from out-of-state,165 and to a rural amusement area operating a snack bar and other facilities, which advertised in a manner likely to attract an interstate clientele and that served food a substantial portion of which came from outside the state.166
Writing for the Court in Heart of Atlanta Motel and McClung, Justice Clark denied that Congress was disabled from regulating the operations of motels or restaurants because those operations may be, or may appear to be,
local in character.
[T]he power of Congress to promote interstate commerce also includes the power to regulate the local incidents thereof, including local activities in both the States of origin and destination, which might have a substantial and harmful effect upon that commerce.167
But, it was objected, Congress is regulating on the basis of moral judgments and not to facilitate commercial intercourse.
That Congress [may legislate] . . . against moral wrongs . . . rendered its enactments no less valid. In framing Title II of this Act Congress was also dealing with what it considered a moral problem. But that fact does not detract from the overwhelming evidence of the disruptive effect that racial discrimination has had on commercial intercourse. It was this burden which empowered Congress to enact appropriate legislation, and, given this basis for the exercise of its power, Congress was not restricted by the fact that the particular obstruction to interstate commerce with which it was dealing was also deemed a moral and social wrong.168 The evidence did, in fact, noted the Justice, support Congress’s conclusion that racial discrimination impeded interstate travel by more than 20 million black citizens, which was an impairment Congress could legislate to remove.169
The Commerce Clause basis for civil rights legislation prohibiting private discrimination was important because of the understanding that Congress’s power to act under the Fourteenth and Fifteenth Amendments was limited to official discrimination.170 The Court's subsequent determination that Congress is not necessarily so limited in its power reduces greatly the importance of the Commerce Clause in this area.171
Federal criminal jurisdiction based on the commerce power, and frequently combined with the postal power, has historically been an auxiliary criminal jurisdiction. That is, Congress has made federal crimes of acts that constitute state crimes on the basis of some contact, however tangential, with a matter subject to congressional regulation even though the federal interest in the acts may be minimal.172 Examples of this type of federal criminal statute abound, including the Mann Act designed to outlaw interstate white slavery,173 the Dyer Act punishing interstate transportation of stolen automobiles,174 and the Lindbergh Law punishing interstate transportation of kidnapped persons.175 But, just as in other areas, Congress has passed beyond a proscription of the use of interstate facilities in the commission of a crime, it has in the criminal law area expanded the scope of its jurisdiction. Typical of this expansion is a statute making it a federal offense to
in any way or degree obstruct . . . delay . . . or affect . . . commerce . . . by robbery or extortion . . . .176 Nonetheless,
Congress cannot punish felonies generally and may enact only those criminal laws that are connected to one of its constitutionally enumerated powers, such as the commerce power.177 As a consequence,
most federal offenses include . . . a jurisdictional element that ties the underlying offense to one of Congress’s constitutional powers.178
The most far-reaching measure the Court has sustained is the
loan-sharking prohibition of the Consumer Credit Protection Act.179 The title affirmatively finds that extortionate credit transactions affect interstate commerce because loan sharks are in a class largely controlled by organized crime with a substantially adverse effect on interstate commerce. Upholding the statute, the Court found that though individual loan-sharking activities may be intrastate in nature, still it is within Congress’s power to determine that it was within a class the activities of which did affect interstate commerce, thus affording Congress power to regulate the entire class.180