1. Marbury v. Madison

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4. Issue: Whether Congress has the power to regulate the production of wheat for consumption by the farmer, apart from the sale of such wheat commercially.
5. Holding: Yes.
6. ∏ Argument: The Congress does not have the power under the commerce clause to regulate the production and consumption of wheat because these activities are local in character and, at most, have an indirect effect on interstate commerce.
7. ∆ Argument: The statute does not regulate production or consumption of wheat, but only marketing; and even if it goes beyond marketing, it is “necessary and proper” in this case.
8. Majority Reasoning: The court discarded the “direct-indirect” approach of Gibbons v. Ogden for a more encompassing approach. Whether an activity had a local is only one of the facts upon which a decision should be based. The test should be based on whether the activity has a “substantial economic effect” on interstate commerce. The consumption of homegrown wheat causes extreme volatility in the national market because it is so variable. Although the effect of one farmer may trivial, he is part of a nationwide market, where the overall effect is not trivial. Since this activity has a substantial economic effect on the interstate wheat market, Congress has the power to regulate it.

1. United States v. Darby, (1941); pg. 131, briefed 9/10/95
2. Facts: Darby was a Georgia lumber manufacturer who hired labor at less than the minimum wage prescribed in the Fair Labor Standards Act of 1938. He was indicted on violating this Act, which sought to regulate the hours and wages of employees by prohibiting the sale of the product in interstate commerce.
3. Procedural Posture: Darby challenged the indictment, and the lower District Court quashed it, holding that it was unconstitutional because it sought to regulate “local” manufacturing activities.
4. Issue: Whether Congress has the power to prohibit shipments of product that are manufactured by employees who are paid less than a prescribed minimum wage and required to work more than a prescribed maximum number of hours.
5. Holding: Yes.
6. ∏ Argument: The Congress only has the power to regulate prohibit the shipment of products which are “bad” in themselves, such as toxic or stolen articles. This prohibition is motivated by the regulation of local wages, the control of which has been reserved to the states as police power, and so is trampling on the states’ rights.
7. ∆ Argument: In its power to regulate interstate commerce, Congress has the implied power to exclude from commerce any articles which it perceives to be injurious to the public health and welfare.
8. Majority Reasoning: The fact that the state has not regulated this type of activity does not preclude the federal government from doing so; its powers are not limited by the inaction of the state. The motive and purpose behind a regulation are legislative concerns, and as long as the power is not exercised beyond the contemplation of the constitution, Congress is free to use the commerce power to implement public policy. Hammer v. Dagenhart, which limited Congress’ power to regulate only those objects which were themselves harmful, is overruled. The test for whether Congress can regulate an activity under the commerce power is whether the activity has a “substantial effect on the commerce or the exercise of the Congressional power over it.” Congress may choose the means necessary to achieve this end, even if it necessarily involves the control of intrastate actions.

1. Perez v. United States, (1971); pg. 137, briefed 9/13/95
2. Facts: Perez was a loan shark. He was convicted under Title II of the Consumer Credit Protection Act which was a federal law prohibiting extortionate loan activities. The Act was passed by Congress pursuant to findings that 1) organized crime is interstate in nature, and 2) a substantial part of the income for organized crime is generated by extortionate loan activities, thus, loan sharking is an instrumentality of interstate commerce, even where individual transactions are purely intrastate in nature.
3. Procedural Posture: Perez challenged his conviction on the grounds that the Act was unconstitutional as being an impermissible exercise of the commerce power by Congress.
4. Issue: Whether Title II of the Consumer Credit Protection Act, as construed and applied to Perez, is a permissible exercise by Congress of its powers under the Commerce Clause.
5. Holding: Yes.
6. ∏ Argument: The Act is unconstitutional because it exceeds the limits of the commerce power contemplated by the framers of the Constitution. It infringes on the States’ police power of their own intrastate crime activities. Loan sharking is a local activity, not an interstate activity.
7. ∆ Argument: Since loan sharking is a substantial revenue generator for organized crime, and organized crime is a nationwide problem that uses interstate commerce as a conduit to conduct illegal transactions, loan sharking affects interstate commerce and is thus able to be regulated by Congress. The States are not able to deal with this problem individually, the federal government needs to provide tools to deal with the problem on a nation-wide level.
8. Majority Reasoning: The majority accepted Congress’ findings on the relationship between loan sharking and organized crime, and the effect of organized crime on interstate commerce. They stated that the commerce clause reaches protection of the instrumentalities of interstate commerce, which included the policing of organized crime. Citing to Darby, the court reasoned that it was permissible for Congress to regulate a class of activities without proof that the particular intrastate activity that was thereby controlled had an effect on commerce. It was proper to consider the “total incidence” that the class of activities had on commerce, rather than to try to carve out exceptions for individual occurrences of the activity that were not proven to be directly related to commerce. Even if individual transactions of loan sharking were completely local in nature, as a whole, they comprised a threat to interstate commerce because of their relation to the interstate activities of organized crime.
9. Dissent Reasoning: Conviction for loan sharking under the federal law should require proof that the individual was actually involved in interstate activities. Otherwise, a purely local problem would be regulated by the federal government, contrary to the States’ police power. Loan sharking is only a national problem in the sense that all crime is a national problem. There is no distinguishing factor about loan-sharking that lends itself to being a threat to interstate commerce per se.

1. United States v. Five Gambling Devices, (1953); pg. 140, briefed 9/13/95
2. Facts: This case involved three companion proceedings arising from a statute that prohibited the shipment of gambling machines in interstate commerce. The statute required the registration and reporting of all gambling machines sold, by all manufacturers and dealers in gambling devices, not just those that had some nexus to interstate commerce.
3. Procedural Posture: The lower courts found the statutory interpretation unconstitutional.
4. Issue: Whether the statute requiring the registration of all gambling devices by all manufacturers and dealers was a permissible exercise of the commerce power when it was interpreted to apply to purely intrastate transactions.
5. Holding: No.
6. ∏ Argument: The statute should be applied according to its literal terms without any showing that any individual activity be shown to have an actual effect on interstate commerce. To have an effective regulation of those gambling machine related activities that do have a relationship to interstate commerce, it is necessary to require reporting of all intrastate transactions.
7. ∆ Argument: The statute is unconstitutional because it regulates purely intrastate transactions that can not be shown to have any nexus to interstate commerce.
8. Majority Reasoning: No precedent of the Court has upheld the power of Congress to enact legislation which penalizes failure to report information concerning acts that have not been shown to be related to interstate commerce. Although the Darby “bootstrap” theory, which allows a class of activities to be regulated even though it is over-inclusive, is applicable under its own facts, the present case is distinguishable on its facts. However, the traditional limitations of the federal system do not go against the lower courts findings. There is no unmistakable intent of Congress to apply the act to the police powers normally reserved for the states.

1. United States v. Bass, (1971); pg. 142, briefed 9/13/95
2. Facts: A man was convicted of possession of a firearm in violation of a provision of the Omnibus Crime Control and Safe Streets Act of 1968 which applied to any felon “who receives, possesses, or transports in interstate commerce or affecting commerce, any firearm.”
3. Procedural Posture: There had been no showing that the defendant’s firearms were commerce-related, but the lower court convicted anyway.
4. Issue: Whether the Omnibus Crime Control and Safe Streets Act of 1968 applied to merely the possession or receiving of firearms without a nexus to interstate commerce demonstrated.
5. Holding: No.
6. ∏ Argument: The commerce limitations in the law applied only to “transports” and that possession and receipt were punishable without a showing that there was a nexus with commerce.
7. ∆ Argument: The interpretation by the government is unconstitutional because it reaches into purely intrastate activities which have no relations to interstate commerce.
8. Majority Reasoning: Since the statute was criminal in nature, such a broad reading as the government asserted would be too intrusive to the police powers of the states. In the absence of clear direction of Congressional intent to do so, the court would not construe the statute so broadly as to not require a showing of nexus with commerce.
9. Notes: In Scarborough v. United States, the government came prepared to show that the firearm in question had once moved in interstate commerce, but did not provide a strong link that the person convicted was involved in any way in interstate commerce or got the firearms after his felony conviction. Nevertheless, the Supreme Court found that the showing was “sufficient to satisfy the statutorily required nexus between the possession of the firearms by a convicted felon and commerce.”

1. Heart of Atlanta Motel v. United States, (1964); pg. 151, briefed 9/17/95
2. Facts: The hotel had 216 rooms and was located within ready access to two interstate highways. It advertised in national media, and was a center for conventions of out of state guests. The hotel refused to rent rooms to African Americans.
3. Procedural Posture: The hotel brought a declaratory judgment action attacking the constitutionality of Title II of the Civil Rights Act of 1964, which prohibited discrimination on the basis of race in places of “public accommodation,” and which grounded its authority primarily in the commerce power. The District Court upheld the Act, and the Hotel appealed.
4. Issue: Whether application of Title II of the Civil Rights Act of 1964 to a motel which serves interstate customers is within the constitutional power of Congress under the Commerce Clause.
5. Holding: Yes. “The determinative test of the exercise of power by the Congress under the Commerce Clause is simply whether the activity sought to be regulated is ‘commerce which concerns more States than one’ and has a real and substantial relation to the national interest.”
6. ∏ Argument: Congress did not have the power to legislate against moral wrongs under the guise of the Commerce Power. Even if they did, the operation of a motel is purely local in character, and thus does not affect interstate commerce.
7. ∆ Argument: Discrimination by hotels has a significant effect on interstate commerce by deterring African Americans to travel.
8. Majority Reasoning: There is ample evidence in the Congressional record that discrimination by places of public accommodation impair African-Americans’ ability to travel, thus affecting interstate commerce. Thus, the Act passed the test of “commerce which concerns more States than one,” and discrimination had a substantial relation to the national interest. The court then listed several examples of factual scenarios where the Congress had legitimately exercised the commerce power to police activities which were both immoral and had an adverse affect on interstate commerce. “That Congress was legislating against moral wrongs...rendered its enactments no less valid.” Furthermore, “if it is interstate commerce that feels the pinch, it does not matter how local the operation that applies the squeeze.” Thus, the commerce power encompasses the regulation of local activities that have an affect on interstate commerce.

1. Katzenbach v. McClung, (1964); pg. 153, briefed 9/17/95
2. Facts: Ollie’s BBQ was a family-owned restaurant in Birmingham that seated 220 customers and was located on a state highway near an interstate highway. The restaurant received about $70,000 of food, mostly meat, in interstate commerce annually. However, it refused to serve African Americans inside its dining facility. They could only order take-out.
3. Procedural Posture: The restaurant brought this action [a sister action to Heart of Atlanta] to challenge the constitutionality of Title II of the Civil Rights Act as it related to restaurants. The District Court found that the Act provided no basis for relating the operations of a local restaurant to interstate commerce, and thus issued an injunction restraining the Act from being enforced against the restaurant, concluding that it would lose substantial business.
4. Issue: Whether such part of Title II of the Civil Rights Act that prohibits discrimination on the basis of race in restaurants which serve interstate travelers or which serve food a substantial portion of which has moved in interstate commerce is constitutional.
5. Holding: Yes.
6. ∏ Argument: There is no basis for believing that racial discrimination in local restaurants has any affect on interstate commerce. Congress has merely created a conclusive presumption that it does, without making formal findings in the record that support such an assertion. The government should be required to show the connection to interstate commerce on a case-by-case basis. The volume of food served at Ollie’s BBQ prohibits such a finding.
7. ∆ Argument: Racial discrimination in restaurants has an affect on interstate commerce because it deters African Americans from traveling, thus reducing business overall.
8. Majority Reasoning: Although there were no formal findings made by Congress, the testimony contained ample evidence to support a finding that racial discrimination in restaurants had an adverse affect on interstate commerce. For instance, by deterring travel by African Americans, the whole business climate suffers for lack of customers. Also, discrimination puts an artificial restriction on the free flow of goods. The wide unrest over the discrimination has a depressant effect on local businesses making new investment and expansion unfavorable in such a depressed business climate. Following Wickard, local activities can be said to have a substantial effect on interstate commerce when viewed in “aggregation.” Racial discrimination is not merely a local problem. As an “aggregation” it is a nationwide problem. Thus, it exercises a substantial economic effect on interstate commerce. The lack of formal findings to that effect were not fatal to the Act because there existed enough evidence to conclude that Congress had a rational basis for “finding a chosen regulatory scheme necessary to the protection of commerce.” The Court needed to do no further examination to second-guess Congress’ judgment in the light of such evidence.
9. Concurrence Reasoning: Douglas was reluctant to base his opinion entirely on the Commerce Clause because he felt that the human rights issue at stake was more consequential than the commerce clause could justify. Thus, he would also support the reasoning under the equal protection clause of the fourteenth amendment because it seemed a much more appropriate grounds for anti-discrimination protection.
10. Notes: Five years later in Daniel v. Paul, Justice Black was the sole dissenter against application of Title II of the Civil Rights Act to the Lake Nixon Club in Arkansas. The club had a snack bar that refused to serve African Americans, and a substantial portion of the food served at the snack bar had traveled in interstate commerce. However, Black felt that the Act would be justifiable if based on the Fourteenth Amendment, but he did not feel that there was an adequate relationship between this snack bar and interstate commerce. He was afraid that this finding would stretch the commerce power to regulate any “remote country place of recreation in every nook and cranny of every precinct and county” everywhere.

1. Garcia v. San Antonio Metro. Transit Auth., (1985); pg. 160, briefed 9/17/95
2. Facts: Garcia was a bus driver who worked overtime hours. Under the FLSA, the ∆, SAMTA, was required to pay a certain wage and comply with certain overtime standards. However, four months after the Supreme Court’s ruling in National League of Cities, that the FLSA did not apply to state government agencies “in areas of traditional government functions,” SAMTA notified its employees that the decision relieved it of its overtime obligations under the FLSA because a municipal public mass-transit system was traditionally a local government function, and therefore immune from FLSA.
3. Procedural Posture: Garcia sued for his overtime pay under the FLSA. The District Court found that a municipal operation of a mass transit system was a traditional government function, and thus under National League of Cities, is exempt from the FLSA wage and overtime obligations.
4. Issue: Whether Congress has the power, under the Commerce Clause, to regulate activities and functions that are “traditionally” an “integral” part of state government operations.
5. Holding: Yes. The fundamental limitation that the constitutional scheme imposes on Congress’ power under the commerce clause to protect “states as states” from intrusion by federal regulation is a procedural one to be found in the political process - states’ and citizens’ participation in federal governmental action.
6. Majority Reasoning: The test of National League of Cities [also the third prong of the test in Hodel], that Congress may not interfere with “traditional” state government functions, is unworkable. There is no meaningful way to determine what is a “traditional” or “integral” part of a state government’s function, and what is not. Such an approach has led to artificial results since its enactment. History is not a viable grounds for a determination because this prevents meaningful change when necessary, as well as being fairly arbitrary. Furthermore, it requires the unelected judiciary to review legislative decisions based on which policies it likes and dislikes. [This argument goes contrary to Marbury.] If Congress has a particular power, it does not matter whether it interferes with the laws of the states. To find limits on the commerce power, the constitution itself must be examined. Since there are no express limits, the constitution suggests that the structure of the federal government itself is the process by which it is regulated; i.e. by state representatives to the federal government. The states’ interests are best protected by their own representation in the federal government. Since the FLSA is a lesser burden on the states than many other Acts, it is evidence of the political pressures on the federal government to protect states’ rights. Thus, National League of Cities is overruled.
7. Dissent Reasoning: [Powell] reasoned that the majority rendered the 10th amendment [reservation of power to the states] meaningless. The “balancing test” of National League of Cities was best designed to protect the states while allowing the Congress proper power. The majority also failed to explain how the states’ role in the electoral process protects them in their capacity as states themselves. The fact that Congress does not generally exceed its constitutional limits to reach state activities does not make judicial review any less necessary on those occasions that it does. The States’ rights are a matter of congressional law, not legislative grace. Congress has passed increasingly more legislation of this type, while at the same time losing ground with its local constituents. This poses a danger for future stability of the federal government because it undermines the constitutional balance of power between the federal government and the states. Furthermore, it is clerks and aids who normally draft legislation, not the Senators themselves. Thus, the drafters are even one more step removed from the constituents who best know how to govern their local agencies. Since the FLSA is so economically intrusive, it clearly violates the “balance” established by National League of Cities.
8. Dissent Reasoning: [O’Connor] felt that the majority had backed down from the fight for states’ rights just when the states needed help from the Supreme Court. There is now a risk that Congress will gradually erase the diffusion of power between state and nation on which the Framers relied. Such a fear is not unwarranted given the amount of similar legislative activity in the last 30 years. The proper test should be weighing the states’ rights as a “relevant consideration” in determining the constitutionality of uses of the commerce power.

1. United States v. Lopez, (1995); pg. 9 Supp., briefed 9/17/95
2. Facts: Lopez was a high school senior in San Antonio who was caught with a .38 caliber handgun and five bullets on school grounds.
3. Procedural Posture: Lopez was charged with violation of § 922(q) of the Gun-Free School Zones Act of 1990, which made it a federal offense “for any individual knowingly to possess a firearm at a...school zone.” The District Court convicted him on a bench trial and sentenced him to six months’ imprisonment. The Court of Appeal for the 5th district reversed the conviction on the grounds that the law was unconstitutional as being beyond the power of Congress to legislate control over local public schools, and the Supreme Court granted cert.
4. Issue: Whether § 922(q) of the Gun-Free School Zones Act is unconstitutional as being beyond the power of Congress to legislate control over local public schools.
5. Holding: Yes.
6. ∏ Argument: § 922(q) is valid because possession of a firearm in a school zone “substantially affects” [see Shreveport] interstate commerce because it results in violent crime which affects the economy in two ways: first, it results in increased costs to the taxpayers, second, it deters people from traveling to areas that are perceived to be unsafe. Also, the presence of guns in school is a substantial threat to the learning environment, which results in a less educated population, and therefore a less productive economy.

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