The Commerce Power of Congress Under the Constitution
Under Section 8 of Article I of the Constitution, Congress has the power to regulate commerce among the states, in addition to commerce involving foreign nations and Native American tribes. Since the Constitution does not provide a definition for "commerce," scholars of constitutional law have debated whether it covers only trade and other economic activities, or whether it covers interactions across state lines more broadly. Meanwhile, the line between intrastate and interstate activity has grown increasingly blurry over time.
Aggressive efforts to wield this power have resulted in a series of Supreme Court cases addressing what Congress can and cannot compel states to do. Interpretations of the Commerce Clause have been controversial, oscillating between broad and narrow views throughout the Court’s history.
The Dormant Commerce Clause
The "Dormant Commerce Clause" is a constitutional doctrine that prevents a state from enacting a law or regulation that places an excessive burden on interstate commerce. This part of the Commerce Clause is "dormant" because it is not explicitly stated in the Constitution but instead is inferred by courts from the text of the Commerce Clause. Cases involving the "Dormant Commerce Clause" often arise when a state tries to boost its economy by favoring in-state businesses over out-of-state businesses conducting activities in that state.
Historical Interpretations of the Commerce Clause
Some of the earliest decisions involving the Commerce Clause applied it broadly. In a 19th-century decision, the Supreme Court allowed Congress to regulate activity within a state that formed part of an interstate commercial scheme. The Court later determined that Congress could regulate local commerce if it could form part of a steady current in which products or services flowed across state lines.
During the Great Depression and the New Deal, the Supreme Court allowed Congress to exercise the commerce power expansively. It defined "commerce" as any activity that had a substantial economic effect on interstate commerce, or even an act with a cumulative impact that could affect interstate commerce. From this perspective, almost any commercial activity at a local level might be expected to meet the standard necessary to invoke the commerce power.
Modern Interpretations of the Commerce Clause
In the 1990s, the Supreme Court departed from its expansive interpretation of the Commerce Clause. It reviewed a challenge to the Gun Free School Zones Act, which was based on the commerce power under the theory that guns in school zones would increase the rate of violent crimes and in turn undermine the economy. For the first time since the New Deal, the Court rejected a Commerce Clause argument by the federal government. In US v. Lopez, it ruled that the commerce power extends only to the channels and instrumentalities of commerce, as well as actions that substantially affect interstate commerce. The Court reasoned that Congress is not entitled to exercise powers that are not enumerated by the Constitution. It also rejected the notion that local and national activities no longer could be separated.
A decade later, the 2005 decision of Gonzales v. Raich shifted back toward a broad understanding of the commerce power. The Supreme Court allowed Congress to criminalize the personal cultivation and use of marijuana in states that allow its medical use. Therefore, the direction of Commerce Clause jurisprudence remains unpredictable in the 21st century.
The Commerce Clause and Obamacare
In a decision involving the Affordable Care Act, popularly known as Obamacare, the Supreme Court reviewed the Commerce Clause in relation to the individual mandate in the ACA. This provision was designed to stabilize the health insurance industry by requiring uninsured people to get insurance. In NFIB v. Sebelius, the Court determined that the Commerce Clause did not provide a valid basis for the individual mandate. This was because the individual mandate addressed commercial inactivity rather than commercial activity, since it compelled transactions that would not have occurred otherwise.