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 grant of power to Congress over commerce, unlike that of power to levy customs duties, the power to raise armies, and some others, is unaccompanied by correlative restrictions on state power. 1 This circumstance does not, however, of itself signify that the states were expected to participate in the power thus granted Congress, subject only to the operation of the Supremacy Clause. As Hamilton pointed out in The Federalist, 2 while some of the powers that are vested in the National Government admit of their
concurrent exercise by the states, others are of their very nature
exclusive, and hence render the notion of a like power in the states
contradictory and repugnant. As an example of the latter kind of power, Hamilton mentioned the power of Congress to pass a uniform naturalization law. Was the same principle expected to apply to the power over foreign and interstate commerce?
Unquestionably, one of the great advantages anticipated from the grant to Congress of power over commerce was that state interferences with trade, which had become a source of sharp discontent under the Articles of Confederation, would thereby be brought to an end. 3 As Webster stated in his argument for appellant in Gibbons v. Ogden:
The prevailing motive was to regulate commerce; to rescue it from the embarrassing and destructive consequences, resulting from the legislation of so many different States, and to place it under the protection of a uniform law. 4 In other words, the constitutional grant was itself a regulation of commerce in the interest of uniformity. 5
That the Commerce Clause, unimplemented by congressional legislation, took from the states any and all power over foreign and interstate commerce was by no means conceded and was, indeed, counterintuitive, considering the extent of state regulation that existed before the Constitution. 6 Moreover, legislation by Congress that regulated any particular phase of commerce would raise the question whether the states were entitled to fill the remaining gaps, if not by virtue of a
concurrent power over interstate and foreign commerce, then by virtue of
that immense mass of legislation as Marshall termed it,
which embraces everything within the territory of a State, not surrendered to the general government 7 – in a word, the
The text and drafting record of the Commerce Clause fails, therefore to settle the question of what power is left to the states to adopt legislation regulating foreign or interstate commerce in greater or lesser measure. 8 To be sure, in cases of flat conflict between an act or acts of Congress that regulate such commerce and a state legislative act or acts, from whatever state power ensuing, the act of Congress is today recognized, and was recognized by Marshall, as enjoying an unquestionable supremacy. 9 But suppose, first, that Congress has passed no act, or second, that its legislation does not clearly cover the ground traversed by previously enacted state legislation. What rules then apply? Since Gibbons v. Ogden, both of these situations have confronted the Court, especially as regards interstate commerce, hundreds of times, and in meeting them the Court has, first, determined that it has power to decide when state power is validly exercised, and, second, it has coined or given currency to numerous formulas, some of which still guide, even when they do not govern, its judgment. 10
Thus, it has been judicially established that the Commerce Clause is not only a
positive grant of power to Congress, but is also a
negative constraint upon the states. This aspect of the Commerce Clause, sometimes called the
dormant commerce clause, means that the courts may measure state legislation against Commerce Clause values even in the absence of congressional regulation, i.e., when Congress’s exercise of its power is dormant.
Webster, in Gibbons, argued that a state grant of a monopoly to operate steamships between New York and New Jersey not only contravened federal navigation laws but violated the Commerce Clause as well, because that clause conferred an exclusive power upon Congress to make the rules for national commerce, although he conceded that the grant to regulate interstate commerce was so broad as to reach much that the states had formerly had jurisdiction over, the courts must be reasonable in interpretation. 11 But, because he thought the state law was in conflict with the federal legislation, Chief Justice Marshall was not compelled to pass on Webster's arguments, although in dicta he indicated his considerable sympathy with them and suggested that the power to regulate commerce between the states might be an exclusively federal power. 12
Chief Justice Marshall originated the concept of the
dormant commerce clause in Willson v. Black Bird Creek Marsh Co., 13 although in dicta. Attacked before the Court was a state law authorizing the building of a dam across a navigable creek, and it was claimed the law was in conflict with the federal power to regulate interstate commerce. Rejecting the challenge, Marshall said that the state act could not be
considered as repugnant to the [federal] power to regulate commerce in its dormant state . . . .
Returning to the subject in Cooley v. Board of Wardens of Port of Philadelphia, 14 the Court, upholding a state law that required ships to engage a local pilot when entering or leaving the port of Philadelphia, enunciated a doctrine of partial federal exclusivity. According to Justice Curtis' opinion, the state act was valid on the basis of a distinction between those subjects of commerce that
imperatively demand a single uniform rule operating throughout the country and those that
as imperatively demand
that diversity which alone can meet the local necessities of navigation, that is to say, of commerce. As to the former, the Court held Congress’s power to be
exclusive; as to the latter, it held that the states enjoyed a power of
concurrent legislation. 15 The Philadelphia pilotage requirement was of the latter kind.
Thus, the contention that the federal power to regulate interstate commerce was exclusive of state power yielded to a rule of partial exclusivity. Among the welter of such cases, the first actually to strike down a state law solely 16 on Commerce Clause grounds was the State Freight Tax Case. 17 The question before the Court was the validity of a nondiscriminatory statute that required every company transporting freight within the state, with certain exceptions, to pay a tax at specified rates on each ton of freight carried. Opining that a tax upon freight, or any other article of commerce, transported from state to state is a regulation of commerce among the states and, further, that the transportation of merchandise or passengers through a state or from state to state was a subject that required uniform regulation, the Court held the tax in issue to be repugnant to the Commerce Clause.
Whether exclusive or partially exclusive, however, the Commerce Clause as a restraint upon state exercises of power, absent congressional action, received no sustained justification or explanation; the clause, of course, empowers Congress, not the courts, to regulate commerce among the states. Often, as in Cooley and in later cases, the Court stated or implied that the rule was imposed by the Commerce Clause. 18In 2019, the Supreme Court said in Tennessee Wine and Spirits Retailers Association v. Thomas that pursuant to “history” and “established case law,” “the Commerce Clause by its own force restricts state protectionism.” 19 In Welton v. Missouri, 20 the Court attempted to suggest a somewhat different justification. The case involved a challenge to a state statute that required a
peddler's license for merchants selling goods that came from other states, but that required no license if the goods were produced in the state. Declaring that uniformity of commercial regulation is necessary to protect articles of commerce from hostile legislation and that the power asserted by the state belonged exclusively to Congress, the Court observed that
[t]he fact that Congress has not seen fit to prescribe any specific rules to govern inter-State commerce does not affect the question. Its inaction on this subject . . . is equivalent to a declaration that inter-State commerce shall be free and untrammelled. 21
It has been evidently of little importance to the Court to explain.
Whether or not this long recognized distribution of power between the national and state governments is predicated upon the implications of the commerce clause itself . . . or upon the presumed intention of Congress, where Congress has not spoken . . . the result is the same. 22 Thus,
[f]or a hundred years it has been accepted constitutional doctrine . . . that . . . where Congress has not acted, this Court, and not the state legislature, is under the commerce clause the final arbiter of the competing demands of state and national interests. 23
Two other justifications can be found throughout the Court's decisions. For example, in Welton v. Missouri, 24 the statute under review, as the Court observed several times, was clearly discriminatory as between in-state and interstate commerce, but that point was not sharply drawn as the constitutional fault of the law. That the Commerce Clause had been motivated by the Framers' apprehensions about state protectionism has been frequently noted. 25 A later theme has been that the Framers desired to create a national area of free trade, so that unreasonable burdens on interstate commerce violate the clause in and of themselves. 26
Nonetheless, the power of the Court is established and is freely exercised. No reservations can be discerned in the opinions for the Court. 27 Individual Justices, to be sure, have urged renunciation of the power and remission to Congress for relief sought by litigants, 28 but that has not been the course followed.
In a case of first impression, the Court held that a Maryland bounty scheme by which the state paid scrap processors for each
hulk automobile destroyed is
the kind of action with which the Commerce Clause is not concerned. 29 As first enacted, the bounty plan did not distinguish between in-state and out-of-state processors, but it was amended in a manner that substantially disadvantaged out-of-state processors. The Court held
that entry by the State itself into the market itself as a purchaser, in effect, of a potential article of interstate commerce [does not] create[ ] a burden upon that commerce if the State restricts its trade to its own citizens or businesses within the State. 30
Affirming and extending this precedent, the Court held that a state operating a cement plant could in times of shortage (and presumably at any time) confine the sale of cement by the plant to residents of the state. 31
[T]he Commerce Clause responds principally to state taxes and regulatory measures impeding free private trade in the national marketplace. . . . There is no indication of a constitutional plan to limit the ability of the States themselves to operate freely in the free market. 32 It is yet unclear how far this concept of the state as market participant rather than market regulator will be extended. 33
Congressional Authorization of Otherwise Impermissible State Action
The Supreme Court has heeded the lesson that was administered to it by the Act of Congress of August 31, 1852, 34 which pronounced the Wheeling Bridge
a lawful structure, thereby setting aside the Court's determination to the contrary earlier the same year. 35 The lesson, subsequently observed the Court, is that
[i]t is Congress, and not the Judicial Department, to which the Constitution has given the power to regulate commerce. 36 Similarly, when in the late 1880s and the early 1890s statewide prohibition laws began making their appearance, Congress again authorized state laws that the Court had held to violate the dormant commerce clause.
The Court applied the
original package doctrine to interstate commerce in intoxicants, which the Court denominated
legitimate articles of commerce. 37 Although it held that a state was entitled to prohibit the manufacture and sale of intoxicants within its boundaries, 38 it contemporaneously laid down the rule, in Bowman v. Chicago & Northwestern Ry. Co., 39 that, so long as Congress remained silent in the matter, a state lacked the power, even as part and parcel of a program of statewide prohibition of the traffic in intoxicants, to prevent the importation of liquor from a sister state. This holding was soon followed by another to the effect that, so long as Congress remained silent, a state had no power to prevent the sale in the original package of liquors introduced from another state. 40 Congress soon attempted to overcome the effect of the latter decision by enacting the Wilson Act,  41 which empowered states to regulate imported liquor on the same terms as domestically produced liquor, but the Court interpreted the law narrowly as subjecting imported liquor to local authority only after its resale. 42 Congress did not fully nullify the Bowman case until 1913, when enactment of the Webb-Kenyon Act 43 clearly authorized states to regulate direct shipments for personal use.
National Prohibition, imposed by the Eighteenth Amendment, temporarily mooted these conflicts, but they reemerged with repeal of Prohibition by the Twenty-first Amendment. Section 2 of the Twenty-first Amendment prohibits
the importation into any State . . . for delivery or use therein of intoxicating liquors, in violation of the laws thereof. Initially the Court interpreted this language to authorize states to discriminate against imported liquor in favor of that produced in-state, but the modern Court has rejected this interpretation, holding instead that
state regulation of alcohol is limited by the nondiscrimination principle of the Commerce Clause. 44
Less than a year after the ruling in United States v. South-Eastern Underwriters Ass'n 45 that insurance transactions across state lines constituted interstate commerce, thereby establishing their immunity from discriminatory state taxation, Congress passed the McCarran-Ferguson Act, 46 authorizing state regulation and taxation of the insurance business. In Prudential Ins. Co. v. Benjamin, 47 the Court sustained a South Carolina statute that imposed on foreign insurance companies, as a condition of their doing business in the state, an annual tax of three percent of premiums from business done in South Carolina, while imposing no similar tax on local corporations.
Obviously, said Justice Rutledge for the Court,
Congress’s purpose was broadly to give support to the existing and future state systems for regulating and taxing the business of insurance. This was done in two ways. One was by removing obstructions which might be thought to flow from its own power, whether dormant or exercised, except as otherwise expressly provided in the Act itself or in future legislation. The other was by declaring expressly and affirmatively that continued state regulation and taxation of this business is in the public interest and that the business and all who engage in it 'shall be subject to' the laws of the several states in these respects. 48
Justice Rutledge continued:
The power of Congress over commerce exercised entirely without reference to coordinated action of the states is not restricted, except as the Constitution expressly provides, by any limitation which forbids it to discriminate against interstate commerce and in favor of local trade. Its plenary scope enables Congress not only to promote but also to prohibit interstate commerce, as it has done frequently and for a great variety of reasons. . . . This broad authority Congress may exercise alone, subject to those limitations, or in conjunction with coordinated action by the states, in which case limitations imposed for the preservation of their powers become inoperative and only those designed to forbid action altogether by any power or combination of powers in our governmental system remain effective. 49
Thus, it is now well-established that
[w]hen Congress so chooses, state actions which it plainly authorizes are invulnerable to constitutional attack under the Commerce Clause. 50 But the Court requires congressional intent to permit otherwise impermissible state actions to
be unmistakably clear. 51 The fact that federal statutes and regulations had restricted commerce in timber harvested from national forest lands in Alaska was, therefore,
insufficient indicium that Congress intended to authorize the state to apply a similar policy for timber harvested from state lands. The rule requiring clear congressional approval for state burdens on commerce was said to be necessary in order to strengthen the likelihood that decisions favoring one section of the country over another are in fact
collective decisions made by Congress rather than unilateral choices imposed on unrepresented out-of-state interests by individual states. 52 And Congress must be plain as well when the issue is not whether it has exempted a state action from the Commerce Clause but whether it has taken the less direct form of reduction in the level of scrutiny. 53