The Commerce Clause: Definition, Analysis & Cases

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  • 0:00 Definition of Commerce Clause
  • 0:17 Analysis of Commerce Clause
  • 2:32 Cases Concerning the…
  • 5:54 Lesson Summary
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Lesson Transcript
Instructor
Andrea Stephenson

Andrea has a Juris Doctor and has spoken at legal conferences on government transparency.

Expert Contributor
Joseph Shinn

Joe has a PhD in Economics from Temple University and has been teaching college-level courses for 10 years.

This lesson will identify the purpose of the Commerce Clause and the different interpretations of how it works. It will also help you understand how the courts have ruled regarding Congress' use of the Commerce Clause. Then you can test your new knowledge with a quiz!

Definition of Commerce Clause

The Commerce Clause refers to Article 1, Section 8, Clause 3 of the U.S. Constitution. The Commerce Clause allocates power to Congress for regulating commerce among states and with foreign nations and Indian tribes.

Analysis of Commerce Clause

Generally, in its simplest form, the Commerce Clause gives Congress authority to regulate commerce and at the same time, restricts states' powers to regulate commerce. However, legal scholars propose at least four interpretations on the extent of Congress' authority under the Commerce Clause.

First, it's argued that under the Commerce Clause, Congress has exclusive power to regulate commerce, and the states have no power to regulate interstate commerce. An example of this can be found in international trade dealings. For example if a company wants to distribute a product to another country, the agreement entered into is subject to federal laws and regulations.

Second, it's argued that both Congress and the states possess simultaneous power to regulate commerce. Therefore, Congress and the states are both free to enact regulations on commerce as each sees fit. However, if a state and a federal regulation come into conflict, then the state's regulation is deemed void and the federal law rules. This interpretation can be found in the area of employment laws because both the states and the federal government enacted employment laws, and employment has an effect on commerce.

The third interpretation argues that Congress and the states each regulate commerce, but only within the areas where they have exclusive regulatory power. This means that the states can regulate all commerce within their borders, but the federal government can regulate commerce between states. If there is a conflict between the regulations of the state and Congress, it's the job of the courts to determine which regulation wins over the other. An example of this can be found in transportation because within the boarders of each state, an individual state regulates the speed limit, registration of vehicles, etc. However, the federal government regulates travel done by commercial vehicles and buses between states.

Fourth and finally, it's argued that the Commerce Clause restricts some ways that states may regulate commerce, but concurrently allows the states and Congress to regulate commerce in many other ways. This fourth interpretation is a complex mash-up of the first interpretation and the second interpretation. This fourth interpretation is mainly what courts use to make decisions regarding the Commerce Clause and is used in Swift and Company v. United States explained next.

Cases Concerning the Commerce Clause

Over the years, the Commerce Clause's reach has been stretched and expanded. Since commerce can be argued to encompass many aspects of everyday life in the United States, the Commerce Clause is used to justify federal regulations where regulation doesn't seem relevant to interstate commerce. For instance, the Supreme Court interpreted the Commerce Clause to allow Congress to regulate interstate navigation under Gibbons v. Ogden, 22 U.S. 1 (1824). It also stopped the Chicago meat industry's price fixing even though such meat business was only a local business under Swift and Company v. United States, 196 U.S. 375 (1905). The courts in Swift used the fourth interpretation explained earlier by deciding that Chicago businesses could not fix the price of meat and that the federal government instead could step in and regulate the price because it squelched fair competition.

There are many other cases in which the Commerce Clause was used. In Heart of Atlanta Motel v. United States, 379 U.S. 241 (1964), the Heart of Atlanta Motel refused to accept African-Americans and was therefore charged with violating the Civil Rights Act. The court ruled that Congress had the authority to regulate the motel under its Commerce Clause power because the motel's business primarily served interstate travelers, and therefore it wasn't able to refuse service to customers based on race. Similarly, in Katzenbach v. McClung, 379 U.S. 274 (1964), the Supreme Court ruled that the Civil Rights Act could be applied through the Commerce Clause to a local family-owned restaurant which refused to serve blacks because the restaurant served food which crossed over the Alabama state line.

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Additional Activities

True/False Questions

Are the statements below true or false? If they are false, explain why they are false.

  1. The Commerce Clause refers to Article 2, Section 7, Clause 10 of the U.S. Constitution.
  2. Under the Commerce Clause, Congress has the right to regulate interstate commerce.
  3. Individual states have the right to regulate interstate commerce under the Commerce Clause.
  4. States have the ability to regulate commerce within their states, but only if that regulation does not contradict the Commerce Clause, which supersedes state laws.
  5. Under the Commerce Clause, ONLY states have the right to regulate commerce within their states.
  6. If it is unclear whether the federal government or state government has the right to regulate commerce in a specific area, the court system is often needed to make the determination.
  7. It is often argued that the Commerce Clause limited the powers of states in regards to their ability to regulate commerce in their state.

Short Answer Questions

For each of the following court cases, briefly explain how the Commerce Clause was impacted or was an important point of contention. Your answer should discuss some of the basic facts of the case.

  • Gibbons v. Ogden, 22 U.S. 1 (1824)
  • Heart of Atlanta Motel v. United States, 379 U.S. 241 (1964)
  • United States v. Morrison, 529 U.S. 598 (2000)


Solutions


True/False Questions

  1. This is false. The Commerce Clause refers to Article 1, Section 8, Clause 3 of the U.S. Constitution.
  2. This is true.
  3. This is false. Only the federal government has this ability.
  4. This is true.
  5. This is false. Both the state and the federal governments have this ability.
  6. This is true.
  7. This is true.

Short Answer Questions

  • Gibbons v. Ogden, 22 U.S. 1 (1824). The primary outcome of this case was that Congress was given the explicit right to regulate interstate commerce.
  • Heart of Atlanta Motel v. United States, 379 U.S. 241 (1964). In this case, it was determined that Congress had the right to regulate the motel because interstate travelers stayed there.
  • United States v. Morrison, 529 U.S. 598 (2000). This case limited the power of Congress by making it clear that the power under the Commerce Clause was limited to issues relating to commerce.

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