Starting in 1937, following the end of the Lochner era, the use of the Commerce Clause by Congress to authorize federal control of economic matters became effectively unlimited.
In support of that claim, they argue that the word "commerce," as used in the Constitutional Convention and the Federalist Papers, can be substituted with either "trade" or "exchange" interchangeably and still preserve the meaning of those statements.
"[13] The Court's decision contains language supporting one important line of Commerce Clause jurisprudence, the idea that the electoral process of representative government represents the primary limitation on the exercise of the Commerce Clause powers: The wisdom and the discretion of Congress, their identity with the people, and the influence which their constituents possess at elections, are, in this, as in many other instances, as that, for example, of declaring war, the sole restraints on which they have relied, to secure them from its abuse.
They are the restraints on which the people must often rely solely, in all representative governments....In Gibbons, the Court struck down New York State's attempt to grant a steamboat monopoly to Robert Fulton, which he had then ultimately franchised to Ogden, who claimed river traffic was not "commerce" under the Commerce Clause and that Congress could not interfere with New York State's grant of an exclusive monopoly within its own borders.
("One approach the Court used to inquire into the lawfulness of state authority was to draw content-based or subject-matter distinctions, thus defining by semantic or formalistic categories those activities that were commerce and those that were not.")
The unanimous decision rendered unconstitutional the National Industrial Recovery Act, a main component of President Franklin Roosevelt's New Deal.
Roosevelt claimed that to be intended to lessen the load on the older Justices, rather than an attempt to achieve a majority that would cease to strike his New Deal acts.
However, in what became known as "the switch in time that saved nine," Justice Owen Roberts, shortly after the "court packing" plan was proposed, joined the 5-4 majority opinion in West Coast Hotel Co. v. Parrish (1937).
[19]In Wickard v. Filburn (1942), the Court upheld the Agricultural Adjustment Act of 1938, which sought to stabilize wide fluctuations in the market price for wheat.
The Court reiterated Chief Justice Marshall's decision in Gibbons: "He made emphatic the embracing and penetrating nature of this power by warning that effective restraints on its exercise must proceed from political, rather than from judicial, processes."
The wide interpretation of the scope of the Commerce Clause continued following the passing of the Civil Rights Act of 1964, which aimed to prevent business from discriminating against black customers.
Daniel v. Paul, 395 U.S. 298 (1969), ruled that the federal government could regulate a recreational facility because three of the four items sold at its snack bar were purchased from outside the state.
[23] Starting in 1995, the Rehnquist Court's revived federalism, as evident in its 5–4 decision in United States v. Lopez, enforced strict limits to congressional power under the Commerce Clause.
It cannot, therefore, be sustained under our cases upholding regulations of activities that arise out of or are connected with a commercial transaction, which viewed in the aggregate, substantially affects interstate commerce.The opinion set a new rule for what was an acceptable use of congressional power under the Commerce Clause: Channels of commerce represent a broad congressional power that directly regulates the movement of goods and people across state lines.
In Morrison, the Court invalidated § 40302 of the Violence Against Women Act ("VAWA"), which created civil liability for the commission of a gender-based violent crime but without any jurisdictional requirement of a connection to interstate commerce or to commercial activity.
The Court found the federal law valid although the marijuana in question had been grown and consumed within a single state and had never entered interstate commerce.
Another view is that the Court was compelled to define limits to address congressional legislation that sought to use the Commerce Clause power in new and unprecedented ways.
The Court found in Seminole Tribe v. Florida, 517 U.S. 44 (1996) that unlike the Fourteenth Amendment, the Commerce Clause does not give the federal government the power to abrogate the sovereign immunity of the states.
The evolving level of scrutiny applied by federal courts to cases involving the Commerce Clause should be considered in the context of rational basis review.
A respect for the democratic process requires courts to uphold legislation if there are rational facts and reasons that could support congressional judgment, even if the justices would have come to different conclusions.
Throughout the 20th century, in a variety of contexts, courts sought to avoid second guessing the legislative branch, and Commerce Clause jurisprudence can be seen as a part of that trend, as Laurence Tribe stated: Since 1937, in applying the factual test in Jones & Laughlin to hold a broad range of activities sufficiently related to interstate commerce, the Supreme Court has exercised little independent judgment, choosing instead to defer to the expressed or implied findings of Congress to the effect that regulated activities have the requisite "economic effect".
For example, the Court referenced extensive testimony presented in hearings in support of the conclusion that discrimination in public accommodations reduces interstate commerce.
But where we find that the legislators, in light of the facts and testimony before them, have a rational basis for finding a chosen regulatory scheme necessary to the protection of commerce, our investigation is at an end.Similarly, in Gonzales v. Raich the Court upheld a ban on growing marijuana intended for medical use on the grounds that Congress could rationally conclude that such cultivation might make enforcement of drug laws more difficult by creating an otherwise-lawful source of marijuana that could be diverted into the illicit market: In assessing the scope of Congress' authority under the Commerce Clause, we stress that the task before us is a modest one.
We need not determine whether respondents' activities, taken in the aggregate, substantially affect interstate commerce in fact, but only whether a "rational basis" exists for so concluding.
§ 801(5), and concerns about diversion into illicit channels, we have no difficulty concluding that Congress had a rational basis for believing that failure to regulate the intrastate manufacture and possession of marijuana would leave a gaping hole in the CSA.Since its decision in Gibbons, the Supreme Court has held that Congress may regulate only those activities within a state that arise out of or are connected with a commercial transaction and that, viewed in the aggregate, substantially affect interstate commerce.
Since judicial interpretations of constitutional limitations on Congressional exercise of its Commerce Clause powers represent an invasion of the democratic process which may not be overturned through ordinary democratic means, the Court has continued to assert that the primary limitation on the unwise exercise of Congressional Commerce Clause power by Congress must be found at the ballot box.
The political process ensures that laws that unduly burden the States will not be promulgated.Questions over the range and applicability of the Commerce Clause have arisen in debate over the constitutionality of the Patient Protection and Affordable Care Act ("PPACA").
The 11th Circuit Court of Appeals ruled the individual mandate to be unconstitutional and stated that Congress had exceeded its authority by requiring Americans to buy coverage.
[40] Differing court opinions have clashed over the question of whether failure to purchase insurance can be considered an economic activity that affects interstate commerce.
Similarly, in Thomas More Law Center v. Obama, judge George Steeh ruled that such decisions have "a documented impact on interstate commerce.