The Commerce Clause

In Chapter 1, Subchapter 2 we discussed in detail Congress’ powers under the General Welfare Clause and touched only very briefly on other Congressional powers. We now turn to the Commerce Clause and Congress’ powers thereunder.

Quite logically, in constructing the working of the federal government, the drafters of the Constitution sought to centralize our nation’s dealing with other nations, and sought to provide some measure of fairness in the dealings among various states. The Commerce Clause grants Congress the exclusive power to regulate commerce with foreign nations. That part of the Commerce Clause is relatively simple and non-problematic, especially when compared with the other crucial grant of power. Because Congress is given the power to regulate commerce “among the several States,” the essential question arises of what constitutes commerce among the states.

EXAMPLE: A New York beverage distributor wishes to enter into an agreement with a Canadian beer company to distribute their beer throughout the U.S. This agreement between a U.S. company and a Canadian company is subject to federal law, because it is commerce with a foreign nation. While there may be various New York statutes, which apply to the company for a variety of purposes, these statues must not infringe on the area belonging exclusively to federal law.

So what is covered by “commerce among the states?” Through Supreme Court cases we can identify four general areas in which the Commerce Clause gives Congress exclusive authority.

• First, Congress may regulate the channels of interstate commerce.
• Second, Congress may regulate the instrumentalities of interstate commerce.
• Third, Congress may regulate things that move across state lines.
• Finally, Congress may regulate activities that have a substantial effect on interstate commerce.

This last category is particularly complicated and will be addressed individually in Subchapter 2.

Note that in each case we have said simply that Congress may regulate the given areas. The Commerce Clause grants Congress this power but does not impose on Congress any responsibility to wield the power. If Congress should choose not to regulate anything falling into these categories, they may do so at their option. Let’s look at each category in more detail.

Channels of Interstate Commerce

Channels of interstate commerce include roadways, waterways, and airways. The Commerce Clause gives Congress the power to regulate activity in these areas even when the activity itself is solely within a particular state.

EXAMPLE: Congress passes a law prohibiting ships carrying explosives from traveling a short stretch of the Mississippi. Although the restricted portion of the river is entirely within a single state, Congress may regulate this channel of interstate commerce in accordance with the Commerce Clause.

Instrumentalities of Interstate Commerce

The “instrumentalities of interstate commerce” category includes people as well as vehicles, machines, etc., which are employed or used in the carrying out of commerce. Congress has authority to regulate these instrumentalities.

EXAMPLE: Imagine that Congress, relying on its Commerce Clause powers, establishes the National Vehicle Testing Service (NVTS) and empowers it to “regulate and enforce vehicular safety measures.” After determining that the driving conditions in Colorado were unique, given the annual snowfall levels, NVTS passes a regulation   requiring all vehicles in Colorado be equipped with snow tires year-round. Even if a car is manufactured entirely within Colorado and used exclusively in the state, the NVTS regulation would apply to that vehicle and would be valid under the Commerce Clause.

Articles Traveling in Interstate Commerce

Congress may properly regulate any items or objects which themselves move in interstate commerce. In Swift v. U.S., 196 U.S. 375 (1905) the Court determined that buyers of livestock for slaughterhouses were involved in a “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.” Swift at 399. In other words, if the subject of federal regulation is something that has been placed in the stream of interstate commerce, the Commerce Clause will permit the regulation.

In today’s computer age, this category has been expanded to include electronic databases, in addition to the traditional commodities such as machines, bales of hay, and other “things” which are routinely transported across state lines. In 1994 Congress passed the Driver’s Privacy Protection Act (DPPA) 18 USCS § 2721 which regulates the disclosure and sale of information contained in state department of motor vehicle drivers’ records. The Supreme Court refused to strike down the DPPA as unconstitutional, and instead found Congressional authority in the Commerce Clause, pointing out that the information which was the subject of the act was a “thing in interstate commerce” Reno v. Condon, 528 U.S. 141, 148 (2000).

EXAMPLE: Today, the internet is no longer a phenomenon but merely another part of modern life, as is “spam,” or junk e-mail. Joe is an eighteen-year-old computer whiz who works out of his garage and has developed a new method for compiling and selling e-mail lists to bookstores nationwide. Congress, however, has passed a law regulating “the transmission or sale of electronic addresses,” which requires those selling the databases to file complicated documents to attest to the source of the addresses. Joe’s "garage set-up" is inadequate to handle the frequent filings and he is contemplating suit in federal court. Unfortunately (for Joe), Joe would not prevail on his claim, as the regulation is authorized under the Commerce Clause.