Commerce Clause of the US Constitution

Cite this article as: Jason Mance Gordon, "Commerce Clause of the US Constitution," in The Business Professor, updated January 2, 2020, last accessed April 8, 2020, https://thebusinessprofessor.com/knowledge-base/commerce-clause/.
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What is the Commerce Clause?
What is the Commerce Clause? Explanation of the Commerce Clause.

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What is the “Commerce Clause”?

Article I, Section 8, specifically grants to the Federal Government the right to  “regulate commerce … among the several states…”

The Commerce Clause allows the Federal Government to regulate any activity that affects “interstate commerce”. It is the most commonly employed justification for the passage of federal laws affecting citizens and businesses within the US. In reality, almost any sort of business activity affects interstate commerce and thus falls under the regulatory authority of the Federal Government. The Federal Government does not, however, have the authority to regulate an activity that is carried out solely within a state’s borders and has no discernible effect on interstate commerce.

  • Example: The Federal Government may prohibit discrimination by hotels and theaters that serve individuals crossing state lines. It would not, however, be able to prohibit an individual from raising plants for personal consumption on private land, when the seeds for those plants do not originate outside of the state and the plants produced will never be sold commercially or transferred outside of the state.

Unless an area of law is expressly reserved for federal regulation, states have the authority to pass laws based upon their police power. The state law cannot “intend to regulate” or “substantially conflict with” interstate commerce. The substantially conflict with provision is known as the “Dormant Commerce Clause”.

Discussion: Can you think of any activities that are regulated under state law that would be outside of the regulatory authority of the Federal Government? Can you think of any historical cases where the Federal Government has passed a federal law that overturns state law? (Hint: Think about civil rights legislation and state laws discriminating against certain individuals.)

Discussion Input

  • Use of land, such as zoning would be an area of purely state law. The zoning of land would have little identifiable effect on interstate commerce. The doctrine of preemption states that the federal government wins in the case of conflicting legislation. According to the “dormant commerce clause” the federal government may prohibit state legislation that discriminates against interstate/ international commerce, a good example is In West Lynn Creamery Inc. v. Healy, 512 U.S. 186 (1994)) in March 2, the Supreme Court struck down a Massachusetts state tax on milk products, as the tax hindered interstate commercial activity by discriminating against non- Massachusetts. The law was unknown to have created tariff-like barriers that neutralized the economic strengths of the non-Massachusetts.

Practice Question: Clarence owns land in Georgia. He plans on extracting a rare type of mineral from the land and selling it to baseball teams to rub on the baseball to reduce the bright glare of the ball when batting. The Federal Government passes a law that prohibits the sale of this type of product. Clarence is outraged that the Federal Government will not allow him to collect and sell mud from his own land. Does the Federal Government have authority to prohibit Clarence’s intended business? Explain.

Proposed Answer

  • The law affects all citizens of US including Clarence. Though the state laws might allow Clarence to sell the property within the state, but the Federal law supersedes the state laws. This is according to Article VI, Section 2 of the US ConstitutionSupremacy Clause” and “Preemption” which provides that the Constitution is supreme over all laws and that federal law is supreme over state law. Moreover, the “dormant commerce clause” also gives the Federal Government the mandate to prohibit state legislation that prohibits interstate commerce, thus Clarence has no reason to be outraged but to submit to the law. The congress may also reserve an area of law for federal regulation thus in such a scenario the federal law precedes the state law.

Academic Research

McGoldrick, James M., The Commerce Clause, The Preposition, and the Rational Basis Test (October 2, 2018). University of Massachusetts Law Review, Forthcoming; Pepperdine University Legal Studies Research Paper No. 2018/17. Available at SSRN: https://ssrn.com/abstract=3259311

Driesen, David M., Inactivity, Deregulation, and the Commerce Clause: A Thought Experiment (August 7, 2017). Wake Forest Law Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3014767

Prakash, Saikrishna, Our Three Commerce Clauses and the Presumption of Intrasentence Uniformity (2003). Arkansas Law Review, Vol. 55, p. 1149, 2003. Available at SSRN: https://ssrn.com/abstract=2857465 or http://dx.doi.org/10.2139/ssrn.2857465

Berman, Mitchell N., Guillen and Gullibility: Piercing the Surface of Commerce Clause Doctrine. U of Texas Law, Public Law Research Paper No. 68. Available at SSRN: https://ssrn.com/abstract=572965

Denning, Brannon P., The Dormant Commerce Clause Doctrine and Constitutional Structure (February 19, 2001). Available at SSRN: https://ssrn.com/abstract=260830 or http://dx.doi.org/10.2139/ssrn.260830

Colangelo, Anthony J., The Foreign Commerce Clause (January 17, 2010). Virginia Law Review, Vol. 96, p, 949, 2010; SMU Dedman School of Law Legal Studies Research Paper No. 53. Available at SSRN: https://ssrn.com/abstract=1537875

Cushman, Barry, Formalism and Realism in Commerce Clause Jurisprudence (May 1, 2000). University of Chicago Law Review, Vol. 67, No. 4, pp. 1089, 2000; Notre Dame Legal Studies Paper No. 1313. Available at SSRN: https://ssrn.com/abstract=224842 or http://dx.doi.org/10.2139/ssrn.224842

Nelson, Grant S. and Pushaw, Robert J., Rethinking the Commerce Clause: Applying First Principles to Uphold Federal Commercial Regulations But Preserve State Control Over Social Issues. Iowa Law Review, Vol. 85, No. 1, October 1999. Available at SSRN: https://ssrn.com/abstract=382562

Francis, Daniel, The Decline of the Dormant Commerce Clause (August 8, 2016). 94 Denver Law Review 255 (2017). Available at SSRN: https://ssrn.com/abstract=2820663

Goodno, Naomi, When the Commerce Clause Goes International: A Proposed Legal Framework for the Foreign Commerce Clause (January 9, 2013). Florida Law Review, Forthcoming; Pepperdine University Legal Studies Research Paper No. 2013/01. Available at SSRN: https://ssrn.com/abstract=2198486

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