Stafford V. Wallace - Stream of commerce

• Taft 1922. Test is whether issue at hand involves “stream of commerce;” Congress can regulate “throat through which current flows.”

• Chicago stockyards fall within stream of commerce. Reasoning here was driven by realism. Felt necessity drives development of CC (as it does in other constitutional doctrines).

• Problem with functional test – seems to blur judicial/legislative decision-making. Functionalism/realism allows SC to make up law, contrary to JR.

Police power

• “Police power” regulations and the commerce-prohibiting technique. In E.C. Knight, Congress attempted to regulate local activities directly (e.g. sugar refinery monopoly). But Congress also developed a separate technique; instead of regulating intrastate activities directly, Congress used the technique of prohibiting interstate transport of certain items or persons. This “commerce-prohibiting” technique was used not only for pure economic regulatory matters, but also for “police power” or “moral” regulation. During first two decades of 20^th century, SCt was substantially more sympathetic to this “commerce-prohibiting/police power” technique than to direct regulation of intrastate affairs.

Champion V. Ames - The Lottery Case

• Harlan 1903. Facts. Congress passed the Federal Lottery Act, which prohibited the interstate shipment of lottery tickets.

• Holding. SCt upheld this statute, thereby allowing Congress to prohibit shipment of immoral objects in interstate commerce. Majority opinion began on the assumption that lotteries were clearly an “evil” which it was desirable for Congress to regulate; since Congress regulated only the interstate shipment of these evil articles, it could not be said to be interfering with intrastate matters reserved for state control. Harlan argued that prohibition is a subset of regulation.

• Koppelman. Is promotion of morality an appropriate goal of federal government, of state government?

• Dissent. Contended that only commerce itself could be regulated, and that lottery tickets were not “articles of commerce.” This holding leads to a slippery slope to regulation of anything (e.g. Child Labor Act)

Hammer V. Dagenhart - Child labor

• Day 1918. SCt was relatively hostile to congressional interference with the employer-employee relationship.

• Holding. By 5-4 vote, SCt struck down a federal statute which prohibited the interstate transport of articles produced by companies which employed children younger than certain ages or under certain conditions.

• Rationale. Power to regulate commerce does not mean power to stop commerce from moving. Congress’ power to prohibit exists only if goods are not ordinary commodities. Majority distinguished this statute from other police power/commerce-prohibiting statutes which the SCt upheld; in those cases, the SCt argued, the interstate transportation being prohibited was part of the very evil sought to be prohibited (e.g. the prohibition on the interstate shipment of lottery tickets, where the tickets themselves were viewed as evil.) Here, by contrast, the goods shipped in interstate commerce were themselves harmless; it was only the employment of child labor which was an evil, and this employment was not directly related to interstate commerce.

• Powers reserved to states. The majority reasoned further that if a prohibition on interstate commerce were permitted in this situation, all manufacturing intended for interstate shipment would be brought under federal control, encroaching unconstitutionally on the authority of the states.

• Holmes’ dissent. But it was the classic dissent by Holmes that in the long run became the more significant opinion in Hammer. Holmes argued that so long as the congressional regulation falls within power specifically given to the Congress (here, the power to regulate interstate commerce), the fact that it has a collateral effect upon local activities otherwise left to state control does not render the statute unconstitutional.

• 10th Amendment of no force. Thus Holmes’ dissent implicitly rejected the 10th Amendment as a source of limitations on federal authority – so long as congressional action technically comes within a constitutionally-enumerated power, it is valid no matter how substantially it impairs the states’ ability to regulate what would otherwise be local affairs. This highly restrictive view of the 10th Amendment became the majority view beginning 1937 and has endured to the present.

• Koppelman.

• Given Lottery Case, this case probably is pretext decision following McCulloch dictum. Congress was really trying to regulate intrastate transaction that had nothing to do with commerce.

1. C/A. Child labor poses disadvantages economically to other states. Majority responded USC wanted to foster competition among states.

• Critique of case’s reasoning. SC seems to be arrogating to itself power to say what goods are or are not in themselves harmless. Child labor has not traditionally been regarded as regulable in way that lotteries were.

1. C/A. SC needed to establish lines to prevent Congress from exerting police power.