The Federal Commerce Power
The Issues:  How far do the powers of Congress extend under the Commerce Clause of Article I?
The United States is a government of enumerated powers.  Congress, and the other two branches of the federal government, can only exercise those powers given in the Constitution.

The powers of Congress are enumerated in several places in the Constitution.  The most important listing of congressional powers appears in Article I, Section 8.


No enumerated power has justified more exercises of congressional power than the Article I, Section 8 power to "regulate commerce among the several states."  (Congress is also given the power to regulate commerce "with foreign nations" and to regulate commerce "with Indian Tribes.") The first major challenge to the exercise of congressional power under the Commerce Clause came in the 1824 case of Gibbons vs Ogden, when two steamship operators with exclusive licenses granted by New York to ferry passengers from New York City to Elizabethtown, New Jersey sued to block Gibbons, a new steamship operator granted a license to ferry passengers on the same route by Congress, from competing against them.  Chief Justice Marshall found that the Commece Clause granted Congress ample power to issue the license to Gibbons.  Commerce, wrote Marshall, is more than just the buying and selling of objects--it includes all branches of commercial intercourse between states, including navigation. 

The next series of cases illustrate two divergent approaches to analyzing whether an activity is reachable under the commerce power.  In U. S. vs E. C. Knight the Court concluded that the Congress lacked the power to reach a monopoly in the "manufacture" of refined sugar, but could reach a "monopoly of commerce" involving sugar.  The Knight case illustrates the formal (or "categorical") approach to analyzing the reach of the commerce power.  The formal approach focuses on such questions as whether the regulated activitity is "in" or "outside" the stream of commerce, whether the activity is "local" or "interstate," or whether the effects of the activity on interstate commerce are "direct" or "indirect."  The contrasting empirical approach, illustrated by Houston E. & W. Ry. Co. vs U. S., looks to the magnitude of the effect that the regulated activity has on interstate commerce, without special regard to how the activity is categorized.  In Houston, the Court upheld a federal agency's regulation of freight rates on travel wholly within Texas because the freight transporation within Texas was found to be substantially affecting interstate commerce.

Hammer vs Dagenhart (1918) considered the constitutionality of the Child Labor Act, which banned items produced by child labor from interstate commerce.  Adopting the formal approach, the Court saw the Act as unconstitutional attempt to regulate a purely local matter, workplace conditions.  The harm of child labor, the Court concluded, had nothing to do with interstate commerce and thus fell outside the reach of congressional power.

Two girls working in Loudon Hosiery Mills (Tennessee) in 1910.

N.L.R. B. vs Jones (1937) represented an important turning point in the Court's Commerce Clause jurisprudence.  The year before, in a case called Carter vs Carter Coal Co., the Court had invalidated a New Deal program that attempted to regulate the wage and hour practices of coal companies on the ground that such practices were "local" and had only an "indirect" effect on interstate commerce.  Enraged by the Court's decision in Carter and other cases, President Roosevelt proposed "packing the Court" with sympathetic justices by increasing its size from nine to fifteen.  In N.L.R. B. vs Jones, Chief Justice Hughes and Justice Roberts side with the government in voting to uphold an N.L.R.B. action ordering the reinstatement of union organizing employees protected by federal law at a Pennsylvania steel plant--the "switch in time that saved nine."  Over the objections of four dissenting justices who called the interstate effects of the regulated activity "too indirect," the Court concluded that the steel industry is an interstate web of activities stretching from the iron mines of Minnesota to the steel plants of Pennsylvania and thus the manufacturing of steel is properly reachable under the Commerce Clause.

U. S. vs Darby (1941), in unanimously overruling Hammer vs Dagenhart, demonstrated how much the Court had changed its approach to Commerce Clause in a generation.  Using a "substantial effects" test, the Court upheld the Fair Labor Standards Act--an important piece of legislation that effectively set national minimum wage and maximum hour laws by prohibiting the interstate shipment of goods manufactured in violation of the federal standards.

Roscoe Filburn with his wheat

Once having established that congressional exercises of power were valid if shown to regulate activities "substantially affecting" interstate commerce, the Court proceeded to open up more opportunities for exercise of the commerce power by holding that an activity only trivially affecting interstate commerce might nonetheless by regulated if all of the regulated activities of various individuals--taken cumulatively--had substantial interstate effects.  In Wickard vs Filburn (1942), for example, the Court upheld a $117 penalty imposed on a Ohio farmer for growing wheat on 12 more acres than he was permitted to under the Agricultural Adjustment Act.  The Court relied on Wickard in the 2005 case of Gonzales v Raich, upholding the power of Congress to authorized seizure of doctor-prescribed marijuana allowed under the laws of California and other states.  The Court in Gonzales noted that local use of medical marijuana had a cumulative effect on the black market for marijuana.

President Lyndon Johnson signing the 1964 Civil Rights Act

The cumulative effects test also convinced the Court to uphold provisions of the 1964 Civil Rights Act that required the 216-room Heart of Atlanta Motel to rent its rooms to persons regardless of race (Heart of Atlanta vs U. S.) and  outlawed racial discrimination at small restaurants such as Ollie's Bar-B-Q in Birmingham (Katzenbach vs McClung).  In 1971, legislation making loansharking a federal crime was upheld on a similar basis (Perez vs U. S.) . The Heart of Atlanta, McClung, and Perez cases led to speculation that perhaps any activity might be regulated under a loose application of the cumulative effects test.


Moreton Rolleston Jr., owner of the Heart of Atlanta motel
(photo: Wayne Wilson/Leviton-Atlanta)

In 1995, however, the Supreme Court--for the first time in more than half a century--invalidated a federal law on the ground that it was outside the scope of the commerce power.  In U. S. vs Lopez the Court, by a 5 to 4 vote, found unconstitutional a provision of the Gun-Free School Zone Act that made it a federal crime to possess a gun (even one that never traveled across state lines) within a thousand feet of a school ground.  It was unclear whether the government lost because the Congress failed to make adequate factual findings about the impact of school gun violence on interstate commerce or whether the Court was convinced that the interstate impact of possessing guns near schools had only an insignificant effect on interstate commerce.  The four dissenters argued that it was sufficient for the Congress to show it had a rational basis for finding a significant effect on interstate commerce.

Christy Brzonkala, the former student at VPI whose efforts to receive compensation for an alleged rape were ended by the Supreme Court in U. S. vs Morrison.

In U. S. vs Morrison (2000) the Court considered a suit brought by a former student of Virginia Poytechnic Institute who alleged she was raped by two university football players.  The defendant players and university argued that the Violence Against Women Act, which allowed victims of gender- motivated violence to bring federal civil suits for damages, was outside of the scope of the commerce power.  The Court agreed with the defendants, even though in this case Congress had made specific findings that gender-motivated violence deterred interstate travel, diminished national productivity, and increased medical costs.  The Court concluded that upholding the Violence Against Women Act would open the door to a federalization of virtually all serious crime--as well as family law and other areas of traditional state regulation.  The Court said that Congress must distinguish between "what is truly national and what is truly local"--and that its power under the Commerce Clause reaches only the former.  In a concurring opinion, Justice Thomas went even further, urging abandonment of "the substantial effects" test.

In the closely watched case of National Federation of Independent Business v Sebelius(2012), the Court considered whether the Affordable Care Act of 2010, the Obama Administration's signature piece of legislation was constitutional.  The Court, on a 5 to 4 vote, found that the individual mandate provision of the Act, which required all persons to buy health insurance or pay a penalty, was outside of Congress's powers under the Commerce Clause.  (The individual mandate, also on a 5 to 4 vote, survived, however, as a valid exercise of Congress's taxing power.)  Chief Justice Roberts concluded that the Commerce Clause gave Congress no power to regulate inactivity (here, the decision of an individual not to buy health insurance.)  To allow such a power, Roberts argued, would give almost limitless power to Congress because there are "an infinite number" of things people do not do everyday.  Congress might even, Roberts wrote, order people to buy broccoli.  The four dissenters (Ginsburg, Sotomayor, Breyer, and Kagan) dissented on the Commerce Clause question, accusing the majority of returning to the categorical approach that had properly been long abandoned by the Court.  In the view of the dissenters, the failure of healthy individuals to buy health insurance had obvious and substantial effects on the health care market, which represents almost one sixth of the U.S. economy.  The dissenters argued that precedents such as Wickard v Filburn supported the exercise of power.

Key Constitutional Grant 
of Powers to Congress

Article I, Section. 8: 

The Congress shall have Power...To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.

Can the federal government make you buy broccoli?

Critics of the Affordable Care Act ("Obamacare") argued that "the individual mandate" (the provision requiring individuals to purchase health insurance or pay a penalty) was outside of Congress's power to regulate commerce.  The rallying cry of critics became, "If Congress can make you buy health insurance, they can make you buy broccoli!"  Whether the two situations are distinguishable became a debating point in National Federation of Independent Business v Sebelius (2012), with broccoli being mentioned twelve times in the various opinions.  A few references to the leafy green vegetable:

Indeed, the Government's logic would justify a mandatory purchase to solve almost any problem to "identify any mandate to purchase a product or service in interstate commerce that would be unconstitutional" under its theory of the commerce power. To consider a different example in the health care market, many Americans do not eat a balanced diet. That group makes up a larger percentage of the total population than those without health insurance. The failure of that group to have a healthy diet increases health care costs, to a greater extent than the failure of the uninsured to purchase insurance. Those increased costs are borne in part by other Americans who must pay more, just as the uninsured shift costs to the insured. Congress addressed the insurance problem by ordering everyone to buy insurance. Under the Government's theory, Congress could address the diet problem by ordering everyone to buy vegetables.... According to the Government, upholding the individual mandate would not justify mandatory purchases of items such as cars or broccoli because, as the Government puts it, "[h]ealth insurance is not purchased for its own sake like a car or broccoli; it is a means of financing health-care consumption and covering universal risks." But cars and broccoli are no more purchased for their "own sake" than health insurance. They are purchased to cover the need for transportation and food.  (Chief Justice Roberts)

As an example of the type of regulation he fears, The Chief Justice cites a Government mandate to purchase green vegetables. One could call this concern "the broccoli horrible."...Consider the chain of inferences the Court would have to accept to conclude that a vegetable-purchase mandate was likely to have a substantial effect on the health-care costs borne by lithe Americans. The Court would have to believe that individuals forced to buy vegetables would then eat them (instead of throwing or giving them away), would prepare the vegetables in a healthy way (steamed or raw, not deep-fried), would cut back on unhealthy foods, and would not allow other factors (such as lack of exercise or little sleep) to trump the improved diet. Such "pil[ing of] inference upon inference" is just what the Court refused to do in Lopez and Morrison....When contemplated in its extreme, almost any power looks dangerous. The commerce power, hypothetically, would enable Congress to prohibit the purchase and home production of all meat, fish, and dairy goods, effectively compelling Americans to eat only vegetables. Yet no one would offer the "hypothetical and unreal possibilit[y]" of a vegetarian state as a credible reason to deny Congress the authority ever to ban the possession and sale of goods. The Chief Justice accepts just such specious logic when he cites the broccoli horrible as a reason to deny Congress the power to pass the individual mandate....  (Justice Ginsburg)


Two Approaches: Swinging Between Categorical and Empirical Tests

Gibbons vs Ogden (1824)
U. S. vs E. C. Knight (1895)

Houston E. & W. Ry. Co. vs U. S. (1914)

Hammer vs Dagenhart (1918)

N.L.R.B. vs Jones (1937)

U. S. vs Darby (1941)

Cumulative Effects Test Applied

Wickard vs Filburn (1942)
Gonzales v Raich (2005)
Heart of Atlanta Motel vs U. S. (1964)

Katzenbach vs McClung (1964)

Rebirth of a Less Deferential Interpretation

U. S. vs Lopez (1995)

U. S. vs Morrison (2000)
National Federation of Independent Business v Sebelius (2012)



1.  What is "commerce"?  Is it just the buying and selling of goods, or should it be interpreted to include, as Chief Justice Marshall says in Gibbons, all the branches of commercial intercourse, including the manufacture and transportation of goods?
2.  The Constitution gives Congress the power to regulate commerce "among" the several states.  Does that mean "between" the states, or could it also mean "among the people"--that is, even within a state?
3.  What would have been the economic future of the United States if Gibbons had gone the other way?
4.  Which of the two basic approaches to Commerce Clause analysis is better, the "empirical test" (e.g., "substantial effects") or the categorical approach that seeks to label effects as "direct" or "indirect" or activities as "local" or "national."  What are the advantages and disadvantages of each approach?
5.  Does the power to "regulate" commerce include the power to ban outright certain articles of commerce--such as lottery tickets, firecrackers, hand grenades, or marijuana?  12.  Is taking a woman across state lines for immoral purposes "commerce"?  (The Court thought so in a decision upholding the constitutionality of the Mann Act.)
6.  Should the Court examine the motive of Congress in enacting legislation under its commerce power, or just analyze the connection of the regulation to interstate effects?  In Hammer vs Dagenhart, the Court was influenced by its conclusion that Congress really legislated because it disapproved of child labor, rather than out of any genuine concern for how child labor was affecting the national economy or the dangers posed by articles produced by child labor.  Should the motive of Congress been a factor?
7.  N.L.R.B. vs Jones, along with U. S. vs Lopez years later, is generally considered one of the two key turning points in Commerce Clause jurisprudence.  What makes it so?
8.  Does the "cumulative effects" approach of Wickard represent a major expansion of the "substantial effects" test as employed previously?
9.  After McClung and Heart of Atlanta Motel, could you imagine any eating establishment or motel that would be outside the reach of  Congress's power under the Commerce Clause to enact civil rights laws prohibiting discrimination against patrons or guests?
10.  Lopez and Morrison raise serious questions about the ability of Congress to enact laws providing federal punishment or federal remedies for conduct traditionally regulated under state criminal codes.  Which of the following are likely to be upheld?: (1) a law making "carjacking" a federal crime?  (2) a law making "drive-by shootings" a federal crime?  (3) a law making it a federal crime to carry out any action designed to terrorize?  (4) a law making child molestation a federal crime?  (5) a law making child pornography a federal crime?
11.  How does Congress distinguish, as Morrison requires it to do, between "what is truly national and what is truly local."?
12. National Federation of Independent Business draws a line between commercial activity, which Congress can regulate, and inactivity, which it cannot.  Many economists argue that any example of inactivity can be re-described as another sort of activity, but Justice Roberts says the Framers were practical men, not students of metaphysics, and would have appreciated the difference.  Do you think he is right?
13.  The dissenters suggest that the inactivity/activity line is just a return to the discredited categorical approaches of the past, and that the Court should have focused on the impact that people without health insurance were having on the overall market.  Will this categorical distinction last, and how much of a limitation will it prove to be on attempts by Congress to enact social welfare legislation?
Two Basic Tests
The Supreme Court has vacillated between two basic types of tests when interpreting the commerce power of Congress.  Each basic type of test has its variations and refinements, but they reflect different core approaches:

1.  The Empirical Test: The empirical test is factual in nature, looking at the effects of the regulated activity and the degree to which they impact interstate commerce.  In one formulation, the Court looks to see whether the regulated activity has "a substantial economic effect" on interstate commerce.  In various applications of this empirical test, the Court has looked at the cumulative impact of regulated private actions to see whether, taken collectively, the effects are substantial.

2.  The Formal (or "Categorical") Test: This approach applies labels to a regulated activity and, depending on the label, the regulated activity is determined to either be reachable or unreachable under Congress's commerce power.  For example, the Court might ask whether the activity is "in" or "outside" the stream of commerce, or whether the regulated activity is a "local" or an "interstate" activity, or whether the economic effect on interstate commerce is "direct" or "indirect," or whether what is being regulated is economic "activity" or "inactivity."

Today, the Court accepts generally accepts the power of Congress (1) to regulate the channels of interstate commerce, (2) to protect the instrumentalities of interstate commerce and any goods or persons that travel in interstate commerce, and (3) to regulate any activities that "substantially affect interstate commerce."  (Gonzales v Raich, 2005).

Angel Raich, allowed to use marijuana for medical purposes under California's Compassionate Use Act, sued Attorney General Gonzales to prevent further federal raids on her home and garden.
 (American Bar Journal photo)

In 2005, the Supreme Court decided the case of Gonzales v Raich.  The case raised the issue of whether federal drug laws prohibiting the private possession of marijuana preempt state laws that authorize possession and consumption for medical pruposes with a doctor's prescription.  After the DEA seized doctor-prescribed marijuana from the home of a patient, Angel Raich and other patients sued. The United States contended that laws authorizing medical marijuana in California and 10 other states interfere with federal drug enforcement.  Raich and fellow medical marijuana user Diane Monson argued that medical marijuana grown and consumed entirely on private property, or provided by a local medical caregiver,  is not "an article of commerce" within the power of Congress to regulate. 
The question the Court considered was: "Is this case distinguishable from the wheat-consumer in Wickard v Filburn?" An answer, by a 6 to 3 vote, was "no."  Writing for the Court, Justice Stevens found that the power of Congress to regulate local activities as part of a "class of activities" that substantially affect interstate commerce was "well established."  The Court concluded that the doctor-prescribed marijuana has a significant impact on both the supply and demand for black market marijuana, which was clearly within the power of the federal government to regulate.  Joining the liberals in the majority were conservatives Scalia and Kennedy, who have been skeptical of strained exercises of the Commerce Clause power in other contexts.  Justices O'Connor, Rehnquist, and Thomas dissented. 

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