The Commerce Clause, American Democracy, and
the Affordable Care Act
SCOTT BOYKIN*
INTRODUCTION: THE HEDGEHOG, THE FOX, AND THE COMMERCE CLAUSE . .
89
I. THE FRAMERS’ INTENTIONS REGARDING THE COMMERCE CLAUSE . . .
92
II. AN ORIGINALIST INTERPRETATION OF THE INTERSTATE COMMERCE
POWER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95
III. THE EMERGENCE OF THE SUBSTANTIAL EFFECTS TEST . . . . . . . . . . .
96
IV. THE SUBSTANTIAL EFFECTS TEST TODAY . . . . . . . . . . . . . . . . . . . .
101
A.
United States v. Lopez . . . . . . . . . . . . . . . . . . . . . . . . . . . .
101
B.
United States v. Morrison . . . . . . . . . . . . . . . . . . . . . . . . . .
102
C. Gonzales v. Raich . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
105
V. THE PATIENT PROTECTION AND AFFORDABLE CARE ACT . . . . . . . . . .
109
VI. THE COMMERCE CLAUSE AND AMERICAN DEMOCRACY . . . . . . . . . . .
111
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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INTRODUCTION: THE HEDGEHOG, THE FOX, AND THE COMMERCE CLAUSE
The United States Constitution is not an ideological document. It is an
historical product formed of different pieces by different groups of people at
different times for different purposes. For this reason, it is a mistake to interpret
a specific provision of the Constitution, such as the Commerce Clause, in light
of policy objectives or normative principles that lack a clear historical connection to that provision. When Jack Balkin argues that a “good test for the
plausibility of any theory of constitutional interpretation is how well it handles
the doctrinal transformations of the New Deal period,”1 he is clearly wrong.
Balkin’s approach to constitutional interpretation would impose upon the Constitution as a document, and the Commerce Clause as a provision in that document, a meaning that is borne of convenience in realizing a particular vision of
good government that was unknown to those who framed and ratified the
Constitution. In a different way, Randy Barnett interprets the Commerce Clause,
* Assistant Professor of Political Science, Georgia Gwinnett College. J.D., University of Alabama
School of Law, 1998; Ph.D., Tulane University, 1993. © 2012, Scott Boykin.
1. Jack M. Balkin, Commerce, 109 MICH. L. REV. 1, 2 (2010).
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at least partially, in light of a political theory of natural rights supported in the
text of the Constitution by the Ninth Amendment.2 His theory of political
legitimacy requires that those not party to ratifying the Constitution would have
no basis for rejecting it on the ground that it violates their natural rights to
liberty.3 Thus, the term “regulate” in the Commerce Clause should be interpreted in such a way that congressional regulation does not violate the natural
rights of persons to engage in free commercial activity.4 “If, however, ‘to
regulate’ grants Congress (or states) the power to impose any restriction it
pleases on gainful activity that is rightful, then this power authorizes the
violation of the rights retained by the people and is illegitimate.”5 Barnett’s is a
cogent political theory, but it imports into the Commerce Clause a principle of
political legitimacy that adds meaning to the Commerce Clause from sources in
moral and political thought that are not present in the provision itself.
Balkin’s and Barnett’s searches for the original meaning of the Commerce
Clause lead to results that are probably wrong because they rely on one central
policy objective (Balkin) or philosophical conception (Barnett) about the function of the Constitution to interpret the Commerce Clause. They reflect what
political theorist Isaiah Berlin, drawing on the Greek poet Archilochus, called
the “hedgehog, who knows one big thing,” which he contrasted with the “fox,
who knows many things.”6 Hedgehogs “relate everything to a single central
vision,” but foxes “pursue many ends, often unrelated and even contradictory,
connected, if at all, only in some de facto way.”7
Here I argue that the fox’s approach is better suited to interpreting the
Commerce Clause. The purpose of the Commerce Clause was to promote
international and domestic trade, and it was included in the text of the Constitution as a means of addressing a specific problem that the government under the
Articles of Confederation was powerless to resolve. The original meaning of the
congressional power to regulate commerce “among the several states” should be
sought in the narrower dimension of the specific problem that it was intended to
address: restrictions on trade imposed by the states to favor residents over those
of other states. As I demonstrate here, there is ample historical evidence for this
purpose. It is a limited and specific purpose and should guide the interpretation
of the Commerce Clause in reviewing the constitutionality of federal legislation.
It is one of many ends sought by those who drafted and ratified the Constitution,
2. RANDY E. BARNETT, RESTORING THE LOST CONSTITUTION: THE PRESUMPTION OF LIBERTY 276–77
(2004). Barnett’s illuminating textual and historical analysis of the Commerce Clause does not rely on
this argument. See Randy E. Barnett, The Original Meaning of the Commerce Clause, 68 U. CHI. L.
REV. 101 (2001); Randy E. Barnett, New Evidence of the Original Meaning of the Commerce Clause,
55 ARK. L. REV. 847 (2003).
3. See RANDY E. BARNETT, RESTORING THE LOST CONSTITUTION: THE PRESUMPTION OF LIBERTY, supra
note 2.
4. Id. at 317–18.
5. Id. at 318.
6. ISAIAH BERLIN, THE PROPER STUDY OF MANKIND 436 (Henry Hardy & Roger Rausheer eds., 1998).
7. Id.
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and it may have contradicted some of the ends promoted by other provisions or
principles.8 The Commerce Clause was certainly never intended to act as the
lynchpin for the expansion of federal power, as Balkin misappropriates it.
Furthermore, as I demonstrate here, the Commerce Clause does not support the
Patient Protection and Affordable Care Act of 2010, which serves as the most
recent and controversial case study in the abuse to which the Commerce Clause
has been put by Congress and the courts.
Under Commerce Clause doctrine today, Congress may regulate (1) “the use
of the channels of interstate commerce,” (2) “the instrumentalities of interstate
commerce, or persons or things in interstate commerce, even though the threat
may come only from intrastate activities,” and (3) “those activities having a
substantial relation to interstate commerce, i.e., those activities that substantially
affect interstate commerce.”9 My analysis concerns the third category: the
substantial effects test. I begin with a review of the documents evidencing the
Framers’ intentions for the interstate commerce power and conclude that they
intended that power to enable Congress to establish domestic free trade and
eliminate interstate barriers to free trade. I then examine the origins of the
substantial effects test, reaching back to cases that predate the New Deal era
cases that established that test, and follow with consideration of how the Court
has attempted to impose some limit on the commerce power when Congress
seeks to regulate intrastate activity that bears no clear relationship to interstate
commerce in Lopez, United States v. Morrison,10 and Gonzales v. Raich.11 I
conclude that these efforts are weak and ineffectual because they do not reflect
the original intent of the Framers for the Commerce Clause and seek to preserve
the substantial effects test, which is unsupported by the Framers’ intent.
It is certain that the next major Commerce Clause case before the Court will
be the current litigation involving the Patient Protection and Affordable Care
Act (PPACA).12 The PPACA includes a mandate that all but a few exempt
categories of Americans purchase and maintain health insurance or pay a
penalty.13 The Sixth14 and Eleventh15 Circuits have reached conflicting conclusions as to whether the individual mandate is a proper exercise of Congress’
authority to regulate interstate commerce under the substantial effects test. I
argue that, under the substantial effects test, the Court should hold that Congress
may require Americans to purchase health insurance. This result is disturbing,
8. See FORREST MCDONALD, NOVUS ORDO SECLORUM: THE INTELLECTUAL ORIGINS OF THE CONSTITUTION
3–8 (1985) (arguing that the diverse intellectual sources that underlay the Constitution were in some
respects contradictory).
9. United States v. Lopez, 514 U.S. 549, 558–59 (1995).
10. United States v. Morrison, 529 U.S. 598 (2000).
11. Gonzales v. Raich, 545 U.S. 1 (2005).
12. Pub. L. No. 111-148, 124 Stat. 119 (2010).
13. Id. § 1501.
14. See Thomas More Law Ctr. v. Obama, 651 F.3d 529 (6th Cir. 2011).
15. See Florida ex rel. Att’y Gen. v. U.S. Dep’t of Health & Human Services, 648 F.3d 1235 (11th
Cir. 2011).
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because it shows how far Commerce Clause doctrine has strayed from the
Framers’ original intentions for that provision. I conclude with the reflection
that this result is disturbing for a broader reason as well: the Court has disserved
American democracy by failing to adhere to the Framers’ intentions for the
Commerce Clause. By means of the substantial effects test, the Court has
prevented a meaningful public debate about the value of the federal system of
government established by our Constitution, allowing it to expand in ways the
Framers did not intend. Furthermore, as evidenced by the PPACA, the Court has
encouraged Congress to devise broad regulatory schemes under the guise of the
commerce power that are intended to reach matters unrelated to interstate
commerce. The PPACA serves to bring this problem into sharp relief, because
the statute seeks to establish a federal entitlement to health insurance. Rather
than presenting this issue to the voting public for what it is, Congress has sought
to conceal the legislative interest it seeks to advance under the cloak of
regulating the market for health insurance in a way the Framers did not intend.
I. THE FRAMERS’ INTENTIONS REGARDING THE COMMERCE CLAUSE
The documents recording the history of the Constitution’s drafting and sale to
the people of the United States contain a notable paucity of discussion regarding
the commerce power because there was little disagreement about its necessity:
“[t]he regulation of commerce, it is true, is a new power; but that seems to be an
addition which few oppose, and from which no apprehensions are entertained.”16 The reasons for this are that (a) the Commerce Clause addressed a
problem that was apparent to everyone, and (b) that problem was a narrow one
that was limited to eradicating discriminatory trade regulations among the
states. It is undoubtedly for this reason that a proposal to require a two-thirds
majority vote to enact legislation regulating commerce among the states was
rejected at the Constitutional Convention.17 The Framers intended the Commerce Clause to empower Congress to enter into trade agreements with foreign
nations on terms favorable to the United States, to establish free trade among
the states in order to promote economic prosperity, and to reduce political
conflict among the states arising from discriminatory trade regulations. The
statements the Framers made regarding the Commerce Clause evidence that its
purposes were limited to the foregoing.
The national government’s lack of power to regulate commerce, and the
resulting diversity of trade regulations by the states, had prevented the national
government from entering into beneficial trade agreements with foreign nations.18 The power to regulate commerce among the states would animate the
power to regulate foreign commerce, for without this “supplemental provision,
16. THE FEDERALIST NO. 45, at 314 (James Madison) (Jacob E. Cooke ed., 1961).
17. 2 THE RECORDS OF THE FEDERAL CONVENTION OF 1787, at 446 (Max Farrand ed., 1966).
18. See THE FEDERALIST NO. 22, at 135–37 (Alexander Hamilton) (Jacob E. Cooke ed., 1961).
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the great and essential power of regulating foreign commerce, would have been
incompleat, and ineffectual.”19 Further,
A very material object of this power was the relief of the States which import
and export through other States, from the improper contributions levied on
them by the latter. Were these at liberty to regulate the trade between State and
State, it must be foreseen that ways would be found out, to load the articles of
import and export, during the passage through their jurisdiction, with duties which
would fall on the makers of the latter, and the consumers of the former.20
It is noteworthy that the power to regulate interstate commerce was “supplemental” to the power to regulate international trade. One of the principal difficulties
the nation faced under the Articles of Confederation was the inability of the
national government to conduct a uniform international trade policy. The Commerce Clause was intended to address that problem.
In addition, the power to regulate interstate commerce was intended to
establish domestic free trade. Free trade among the states was vital to economic
prosperity:
An unrestrained intercourse between the States themselves will advance the
trade of each, by an interchange of their respective productions, not only for
the supply of reciprocal wants at home, but for exportation to foreign markets.
The veins of commerce in every part will be replenished, and will acquire
additional motion and vigour from a free circulation of the commodities of
every part. Commercial enterprise will have much greater scope, from the
diversity in the productions of different States.21
The interstate commerce power was thus intended to establish domestic free
trade.
The different economies of the states gave rise to commercial conflicts
among states with maritime interests, manufacturing interests, and agricultural
interests, which themselves differed by the principal crops produced.22 The
Commerce Clause was intended to address such conflicts:
The interfering and unneighbourly regulations of some States contrary to the
true spirit of the union, have in different instances given just cause of
umbrage and complaint to others; and it is to be feared that examples of this
nature, if not restrained by a national controul, would be multiplied and extended till
they became not less serious sources of animosity and discord, than injurious
impediments to the intercourse between the different parts of the confederacy.23
19.
20.
21.
22.
23.
THE FEDERALIST NO. 42, at 283 (James Madison) (Jacob E. Cooke ed., 1961).
Id. at 283.
THE FEDERALIST NO. 11, at 71 (Alexander Hamilton) (Jacob E. Cooke ed., 1961).
See, e.g., 2 RECORDS OF THE FEDERAL CONVENTION, supra note 17, at 449.
THE FEDERALIST NO. 22, at 137 (Alexander Hamilton) (Jacob E. Cooke ed., 1961).
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So, for example, agricultural states would be protected against discriminatory
practices from commercial states by the congressional power over interstate
commerce.24 The commerce power “being supreme can controul interferences
of the State regulations when such interferences happen.”25 The “want of a
general power over Commerce led to an exercise of this power separately, by
the States, wch [sic] not only proved abortive, but engendered rival, conflicting
and angry regulations,” involving the use of imposts levied by states with ports
for foreign trade on producers from states without such ports.26 Interstate trade
discrimination was the reason that “the States individually are generally incompetent to the purpose that the United-States should also regulate the Commerce
of the United-States foreign & internal,” and was “also a matter of general
Consent.”27 This purpose is underscored by the fact that the concerns expressed
about the commerce power were that Congress would use it to the advantage of
some states and the disadvantage of others, particularly as these related to
navigation and exports of agricultural products from the southern states.28
Political disharmony and the potential for severe political conflict, which had
been intimated already under the Articles of Confederation, was an additional
reason for delegating the power to regulate interstate commerce to Congress.
Hamilton noted that state laws that impaired contracts between citizens of
different states had led to political retaliation among state governments.29 He
expressed concern, based upon observations of the state governments under the
Articles of Confederation, that restraints on trade imposed by states on their
neighbors could lead to armed conflict.30
Above all, the commerce power had a negative, and not a positive purpose:
Yet it is very certain that it [the interstate commerce power] grew out of the
abuse of the power by the importing States in taxing the non-importing, and
was intended as a negative and preventative provision against injustice among
the States themselves, rather than as a power to be used for the positive
purposes of the General Government, in which alone, however, the remedial
power could be lodged.31
The Framers adopted the Commerce Clause for narrow purposes. They intended
the commerce power to enable the national government to conduct a uniform
24. JAMES MADISON, NOTES OF DEBATES IN THE FEDERAL CONVENTION OF 1787 REPORTED BY JAMES
MADISON 469 (Mr. Sherman) (1840) (1984).
25. Id. at 645 (Mr. Sherman).
26. 3 RECORDS OF THE FEDERAL CONVENTION, supra note 17, at 547–48 (letter of James Madison to
unknown recipient, March, 1836).
27. 4 RECORDS OF THE FEDERAL CONVENTION, supra note 17, at 23 (speech of Martin Luther).
28. See, e.g., 2 RECORDS OF THE FEDERAL CONVENTION, supra note 17, at 631, 639–40; 3 RECORDS OF
THE FEDERAL CONVENTION, supra note 17, at 164, 210, 303, 332–33.
29. See THE FEDERALIST NO. 7, at 42 (Alexander Hamilton) (Jacob E. Cooke ed., 1961).
30. See id. at 43.
31. 3 RECORDS OF THE FEDERAL CONVENTION, supra note 17, at 478 (letter from James Madison to J.C.
Cabell, Feb. 13, 1829).
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trade policy with foreign nations, to establish domestic free trade, and to reduce
interstate political conflict. These were the Framers’ intentions, and there is no
legitimate basis in the historical record for ascribing any more ambitious
purpose to the Commerce Clause than these.
II. AN ORIGINALIST INTERPRETATION OF THE INTERSTATE COMMERCE POWER
The historical record makes clear that the problem the interstate commerce
power was intended to resolve arose from the state governments’ restrictions on
trade. The Framers intended to enable the national government to establish
domestic free trade and eliminate barriers to interstate trade. This narrow and
limited purpose is the original meaning of the interstate commerce power, and
courts should interpret that power accordingly. Courts should concentrate on the
national interest the Framers intended the commerce power to advance. Academic debate on the issue has focused on the meaning of the term “commerce”
and yielded broadly divergent interpretations.32 Those who purport to rely, in
one way or another, on original meaning often depart from the Framers’
intentions in their focus on semantics. Pushaw and Nelson, for example, acknowledge that the “Framers of the Commerce Clause intended to authorize Congress
to prevent states from pursuing protectionist economic policies and to promote
national commerce, and the Constitution’s Ratifiers shared this understanding.”33 Pushaw and Nelson disregard that narrow intention and employ a broad
definition of “commerce” as “the voluntary sale or exchange of property and
services and all accompanying market-based activities, enterprises, relationships, and interests” that Congress should be authorized to regulate.34 The
interstate commerce power, in their view, then extends to any commerce that
affects “more than one state.”35 Balkin’s brand of originalism candidly abandons the Framers’ intentions in favor of “structural principles” relating to
federalism that he recognizes the Framers may not have intended at all.36
Pushaw argues that deficiencies of a narrow and originalist interpretation of
the Commerce Clause are that (a) most of the Framers and Ratifiers of the
32. See, e.g., Barnett, Original Meaning, supra note 2 (arguing for narrow interpretation to commercial acts crossing state boundaries); New Evidence of the Original Meaning, supra note 2 (arguing for
narrow interpretation of “commerce” and “regulate”); Raoul Berger, Judicial Manipulation of the
Commerce Clause, 74 TEX. L. REV. 695, 703–04 (1996) (arguing for narrow interpretation of “commerce” as trade crossing state lines); Richard A. Epstein, The Proper Scope of the Commerce Power, 73
VA. L. REV. 1387, 1395 (1987) (arguing for narrow interpretation of “commerce” as trade); Jack M.
Balkin, Commerce, 109 MICH. L. REV. 1 (2010) (arguing for broad interpretation of “commerce”);
Robert J. Pushaw, Jr. & Grant S. Nelson, A Critique of the Narrow Interpretation of the Commerce
Clause, 96 NW. U. L. REV. 695, 705–12 (2002) (arguing for broad interpretation covering economic
activities that affect multiple states).
33. Grant S. Nelson & Robert J. Pushaw, Jr., Rethinking the Commerce Clause: Applying First
Principles to Uphold Federal Commercial Regulations but Preserve State Control over Social Issues,
85 IOWA L. REV. 1, 21 (1999).
34. Id. at 9.
35. Id. at 10–11, 110–12.
36. Balkin, supra note 1 at 1, 7–8.
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Constitution did not say anything about it, (b) the term “commerce” was often
used in a broad sense in the late 18th century, and (c) that some of the Framers
appear to have used the term “commerce” in a way that included such activities
as transportation, manufacturing, and agriculture.37 My approach does not
suffer from these alleged defects for the following reasons. First, the fact that
there was little debate about the Commerce Clause indicates that it was intended
by the Framers and believed by the Ratifiers to have a limited purpose. Had it
been understood at the time to give the national government sweeping powers
to regulate intrastate activity, the Commerce Clause would have been the
subject of acrimonious debate at the Constitutional Convention and at the
ratifying conventions.38 Second, it is of no great importance that the term
“commerce” was sometimes used in a broad sense in the late 18th century. What
is more important is to ascertain the types of problems the Framers sought to
address by means of the Commerce Clause and thereby to determine its
Constitutional function. Finally, the fact that some of the Framers may have
believed “commerce” to include such activities as transportation, manufacturing, or agriculture does not of itself suggest that they intended the Commerce
Clause to authorize Congress to regulate intrastate acts for purposes other than
to establish domestic free trade and eliminate barriers to interstate trade. My
approach does not rely on such categories of activity. Instead, I contend that
when courts review a Commerce Clause challenge to Congressional legislation,
the question of paramount importance is whether the interest the legislation
seeks to advance is the promotion of interstate free trade or the elimination of
interstate trade discrimination. The parsing of terms and categories of acts plays
a limited role in this kind of analysis.
III. THE EMERGENCE OF THE SUBSTANTIAL EFFECTS TEST
Federal power grew in the late nineteenth and early twentieth centuries as
Congress sought to promote the nation’s economic development and regulate an
increasingly broad range of economic activity to address the negative consequences of industrialization for workers and the market power of large firms.39
The Court initially resisted expanding regulation in defense of federalism but
ultimately gave in to the idea that a modern economy demands centralized
regulation, abandoning any meaningful limitation on Congressional power to
37. Robert J. Pushaw, Methods of Interpreting the Commerce Clause: A Comparative Analysis, 55
ARK. L. REV. 1185, 1199–1200 (2003).
38. See also Robert G. Natelson, The Legal Meaning of “Commerce” in the Commerce Clause, 80
ST. JOHN’S L. REV. 789, 839 (2006). Indeed, “during the ratification debates, the Constitution’s
advocates repeatedly and clearly represented to the general public many areas over which the new
government would have no power at all, at least within state boundaries. Their lists included education,
social services, real estate transactions, inheritance, religion, manufacturing, agriculture and other land
use, business licensing, most road building, civil justice within states, local government, and control of
personal property outside mercantile commerce.” Robert G. Natelson and David Kopel, Commerce in
the Commerce Clause: A Response to Jack Balkin, 109 MICH. L. REV. FIRST IMPRESSIONS 55, 59 (2010).
39. See United States v. Lopez, 514 U.S. 549, 554–55 (1995).
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regulate activity, commercial or not, that affects interstate commerce. Today,
virtually any activity that substantially affects interstate commerce, under rational basis review, is subject to Congressional regulation under the Commerce
Clause. But this did not happen all at once. Rather, the Court began to consider
the “effects” of activities on interstate commerce decades before it capitulated
and ushered in the “new era”40 of Commerce Clause jurisprudence that has
governed since 1937. There is a long, slow, slide toward repudiating any
substantive limitation on the commerce power that began as the Court considered the “effects” of intrastate activity on interstate commerce. It is that
doctrinal lapse that gave us the Commerce Clause doctrine we now confront.
The Court first held invalid a Congressional statute as exceeding its commerce power in United States v. Dewitt.41 Congress had enacted a statute that
made it a misdemeanor to sell a mixture of naphtha and illuminating oils that
was flammable at less than 110 degrees Fahrenheit, which the Court held was a
police regulation rather than a proper exercise of the commerce power.42 Other
early Commerce Clause cases examined issues relating to what is now known
as the Dormant Commerce Clause and were concerned with interference with
interstate commerce by the state governments.43 The Court recognized the
narrow scope of the Commerce Clause in these cases. In Veazie v. Moor,44 for
example, the Court rejected the claim that a state government’s granting a
monopoly to navigation on a river located wholly within that state implicated
the Commerce Clause:
[t]he design and object of that power, as evinced in the history of the
Constitution, was to establish a perfect equality amongst the several States as
to commercial rights, and to prevent unjust and invidious distinctions, which
local jealousies or local and partial interests might be disposed to introduce
and maintain. These were the views pressed upon the public attention by the
advocates for the adoption of the Constitution, and in accordance therewith
have been the expositions of this instrument propounded by this court, in
decisions quoted by counsel on either side of this cause, though differently
applied by them.45
Likewise, in Kidd v. Pearson,46 the Court rejected the claim that a state law
banning the manufacture of alcoholic beverages in that state, even for export to
other states infringed the commerce power, reasoning that “it is a matter of
public history that the object of vesting in Congress the power to regulate
commerce with foreign nations and among the several States was to insure
40.
41.
42.
43.
44.
45.
46.
Id. at 554.
76 U.S. 41 (1869).
Id. at 44–45.
See Lopez, 514 U.S. at 553.
55 U.S. 568 (1852).
Id. at 574.
128 U.S. 1 (1888).
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uniformity of regulation against conflicting and discriminating state legislation.”47 State regulation does not implicate the Commerce Clause “unless, under
the guise of police regulations, it ‘imposes a direct burden upon interstate
commerce,’ or ‘directly interferes with its freedom.’”48 These decisions do not
speak of the effects of intrastate commerce on interstate commerce.49
It was not long, however, before the Court began to consider the effects of
intrastate commerce on interstate commerce. In United States v. E.C. Knight
Co.,50 the Court held that stock purchases that gave a company a virtual
monopoly over sugar refining in the United States did not violate the Sherman
Antitrust Act51 because the purchases only gave the company control over the
manufacturing process, which did not in itself constitute a restraint on interstate
commerce. The Court reasoned that manufacturing is not commerce, and “affects it [commerce] only incidentally and indirectly.”52 In Houston, East and
West Texas Railway Co. v. United States (The Shreveport Rate Cases),53 the
Court held that the Interstate Commerce Commission was authorized to prohibit
lower intrastate rates for railroad service than higher rates for interstate service,
on the ground that the intrastate rates had “a close and substantial relation to
interstate traffic.”54
In A.L.A. Schechter Poultry Corp. v. United States,55 and Carter v. Carter
Coal Co.,56 the Court began to develop the distinction between direct and
indirect effects on interstate commerce. Although the distinction served at the
time to limit the extension of the commerce power over intrastate activity, it laid
the foundation for the emergence of the substantial effects test shortly thereafter.
In Schechter, the Court held that provisions of a poultry code established
pursuant to congressional legislation that regulated hours and wages of persons
employed in a poultry slaughterhouse exceeded Congress’ authority under the
Commerce Clause, relying on a distinction between “direct” and “indirect”
effects on interstate commerce.57 Since the wages and hours of the employees
47. Id. at 10.
48. Id. at 11 (quoting Hall v. De Cuir, 95 U.S. 485, 488 (1877)).
49. Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1 (1824) is often cited for its purportedly broad
interpretation of the interstate commerce power. See, e.g., LAURENCE H. TRIBE, 1 AMERICAN CONSTITUTIONAL LAW § 5-4 (3d. ed. 2000); Nelson & Pushaw, supra note 33, at 58. This understanding of
Gibbons neglects the fact that the case involved navigation between two states. For this reason,
Gibbons does not support the creation of the substantial effects doctrine. See also Robert G. Natelson,
Tempering the Commerce Power, 68 MONT. L. REV. 95, 116–17 (2007); Berger, supra note 32, at
706–708; Epstein, supra note 32, at 1454 (arguing that Gibbons in fact limits interstate commerce
regulation to “those matters that today are governed by the dormant commerce clause: interstate
transportation, navigation and sales, and the activities closely incident to them”).
50. 156 U.S. 1 (1894).
51. 15 U.S.C. §§ 1–7 (2006).
52. Knight, 156 U.S. at 12.
53. 234 U.S. 342 (1914).
54. Id. at 351.
55. 295 U.S. 495 (1935).
56. 298 U.S. 238 (1936).
57. Schechter, 295 U.S. at 544.
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were wholly intrastate in character, the regulations were beyond the scope of the
commerce power.58 In Carter, the Court examined the regulation of working
conditions and prices of coal produced in mines, which it held to be intrastate
activity and thus beyond the authority of Congress under the Commerce Clause.
The mining operations, the Court determined, had at best only an “indirect”
effect on interstate commerce, because a “direct” effect “implies that the
activity or condition invoked or blamed shall operate proximately—not mediately, remotely, or collaterally—to produce the effect. It connotes the absence of
an efficient intervening agency or condition.”59 The question, as the Court
phrased it, is “[w]hat is the relation between the activity or condition and the
effect.”60 While Schechter and Carter are often regarded as an overly formalistic approach to distinguishing intrastate from interstate activities,61 these decisions followed logically from earlier cases such as Knight and the Shreveport
Rate Cases. In all these cases, the Court searches for some limiting principle
while simultaneously opening the door for regulation where the effect of
intrastate activity on interstate commerce is somehow “direct.” It is now the
nature of the effect on commerce, rather than the intrastate or interstate character of the activity itself, that subjects the activity to congressional regulation.
The foregoing decisions opened the door to the “new era” of Commerce
Clause jurisprudence that began with National Labor Relations Board v. Jones
& Laughlin Steel Corp.62 The Court relied upon Schechter for the proposition
that “[a]lthough activities may be intrastate in character when separately considered, if they have such a close and substantial relation to interstate commerce
that their control is essential or appropriate to protect that commerce from
burdens and obstructions, Congress cannot be denied the power to exercise that
control.”63 The Court found such a close and substantial relation in the prospect
of “industrial strife” that could occur if the workers’ right to bargain collectively
with their employers were not protected by congressional legislation.64
Following the decision in Jones & Laughlin Steel Corp., the Court developed
and applied the substantial effects test to a broad range of regulatory schemes
that in principle leaves virtually no intrastate economic activity beyond the
reach of the commerce power. In United States v. Darby,65 the Court upheld a
statute prohibiting the shipment in interstate commerce of goods produced by a
lumber manufacturer who violated the wage and hour provisions of the Fair
Labor Standards Act.66 The commerce power, the Court stated, “extends to
58.
59.
60.
61.
62.
63.
64.
65.
66.
See id.
Carter, 298 U.S. at 307.
Id. at 308 (emphasis in original).
See, e.g., United States v. Lopez, 514 U.S. 549, 605 (1995) (Souter, J., dissenting).
301 U.S. 1 (1937).
Id. at 37.
Id. at 41.
312 U.S. 100 (1941).
29 U.S.C. § 201 et seq. (2006).
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those activities intrastate which so affect interstate commerce or the exercise of
the power of Congress over it as to make regulation of them appropriate means
to the attainment of a legitimate end, the exercise of the granted power to
Congress to regulate interstate commerce.”67 Significantly, the Darby Court
disavowed its authority to inquire into “the motive and purpose of a regulation
of interstate commerce,” leaving such judgments entirely to Congress.68 The
Court held in United States v. Wrightwood Dairy Co.69 that the Department of
Agriculture possessed the statutory authority to regulate the price of milk
produced and sold intrastate because that price affected the prices of milk sold
in interstate commerce.70 The commerce power, the Court reasoned, “extends to
those intrastate activities which in a substantial way interfere with or obstruct
the exercise of the granted power.”71 The character of the regulated activity was
no longer decisive: “[i]t is the effect upon the interstate commerce or its
regulation, regardless of the particular form which the competition may take,
which is the test of federal power.”72
The substantial effects test reached its zenith in Wickard v. Filburn,73 in
which the Court held that penalties imposed for producing wheat in excess of
regulatory quotas under the Agricultural Adjustment Act of 193874 permitted the
regulation of wheat produced by a farmer for feed to livestock on his farm.
Since, taken in the aggregate, such activities could affect the price of wheat in
interstate commerce, Congress had the authority under the Commerce Clause to
prohibit the production of excess wheat for personal use:
Even if appellee’s activity be local and though it may not be regarded as
commerce, it may still, whatever its nature, be reached by Congress if it exerts
a substantial economic effect on interstate commerce, and this irrespective of
whether such effect is what might at some earlier time have been defined as
“direct” or “indirect.”75
Under the power to regulate interstate commerce, therefore, Congress may
regulate matters that are neither interstate commerce nor commerce at all. The
aggregation principle established in Wickard authorized Congress to regulate
intrastate hotel businesses under the Civil Rights Act of 196476 and to enact
criminal laws prohibiting intrastate “loan sharking”77 because such intrastate
67.
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
Darby, 312 U.S. at 118.
Id. at 114.
315 U.S. 110 (1942).
Id. at 119, 120–21.
See id.
Id. at 120.
317 U.S. 111 (1942).
7 U.S.C. §§ 1281, 1340 (2006).
Wickard, 315 U.S. at 125 (emphasis added).
See Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241 (1964).
See Perez v. United States, 402 U.S. 146 (1971).
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economic activities, in the aggregate across the country, exerted a substantial
effect on interstate commerce.
The coup de grace arrived in Garcia v. San Antonio Metropolitan Transit
Authority,78 in which the Court held that the states themselves were subject to
the Fair Labor Standards Act when activities of a governmental entity “affect
interstate commerce.”79 Garcia overruled National League of Cities v. Usery,80
which had held that states and local governments were exempt from the wage
and hour provisions of the Fair Labor Standards Act when engaged in “traditional governmental functions” on the ground that the classification was impracticable.81 States and their employees are now subject to regulation under the
commerce power because their activities affect interstate commerce. Rather
than presenting a legal distinction between national and state authority, the
Commerce Clause now reposed the authority in Congress to regulate virtually
anything that substantially affects interstate commerce.
The substantial effects test is utterly foreign to the original intentions of the
Framers. They intended the Commerce Clause to deal with a narrow and
specific problem: discrimination by states against competition with locals from
firms in sister states. The Court abandoned the Framers’ intentions within a
century of the Constitution’s adoption by accommodating, in fits and starts,
Congress’ attempts to regulate activities that affected the nation’s economy.
IV. THE SUBSTANTIAL EFFECTS TEST TODAY
The Court has attempted to impose limits on the substantial effects test to
constrain the intrastate activities Congress can regulate in the form of a distinction between “economic” and “noneconomic” activities, so that only “economic” intrastate activities are within the necessary and proper reach of the
commerce power. This distinction, like other categorical distinctions that Court
has tried previously, fails to impose such limits. This is why a return to the
Framers’ intentions for the Commerce Clause, and an abandonment of the
substantial effects test, are a necessary reform to the Court’s Commerce Clause
jurisprudence.
A. United States v. Lopez
In United States v. Lopez,82 the Court held that the Gun-Free School Zones
Act of 1990, as then enacted, exceeded the scope of the commerce power. The
statute made it a federal crime “for any individual knowingly to possess a
firearm at a place that the individual knows, or has reasonable cause to believe,
78.
79.
80.
81.
82.
469 U.S. 528 (1985).
Id. at 537.
426 U.S. 833 (1976).
See Garcia, 469 U.S. at 538–42.
514 U.S. 549 (1995).
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is a school zone.”83 The respondent, a high school student, was convicted of
possessing a pistol in school in violation of the statute.84 The Court recognized
that Lopez’s attack on the statute fell under the “substantial effects” wing of its
commerce decisions, which “requires an analysis of whether the regulated
activity ‘substantially affects’ interstate commerce.”85 Reviewing its decisions
in Hodel, Perez, McClung, Heart of Atlanta Motel, and Wickard, the Court
concluded that because its decisions had limited the substantial effects test to
“economic activity,” those decisions could not justify the prohibition in the
Gun-Free School Zones Act under the Commerce Clause because the gun
possession it prohibited was not “economic activity.”86 The Court rejected the
government’s arguments that the “costs of crime,” disincentives to travel, and
threat to public education established the required nexus between the statute and
interstate commerce, finding these factors too attenuated in their effects on
interstate commerce.87 The central issue, to the majority, was the nature of the
regulated activity: “[t]he possession of a gun in a local school zone is in no
sense an economic activity that might, through repetition elsewhere, substantially affect any sort of interstate commerce.”88
Lopez is a decision of real historical significance because it was the first
decision invalidating an entire statute enacted under the Commerce Clause since
the 1937 “Court Revolution.” The majority opinion represents an effort to
impose some limitation on the commerce power under the substantial effects
test by limiting its application to “economic activity” that substantially affects
interstate commerce. The concurring justices assailed the economic-noneconomic distinction as impracticable and out of step with well-established precedents since Wickard.89 Indeed, the majority recognized that
[A] determination whether an intrastate activity is commercial or noncommercial may in some cases result in legal uncertainty. But, so long as Congress’
authority is limited to those powers enumerated in the Constitution, and so
long as those enumerated powers are interpreted as having judicially enforceable outer limits, congressional legislation under the Commerce Clause always will engender ‘legal uncertainty.’90
B. United States v. Morrison
In United States v. Morrison,91 the Court held that provisions of the Violence
Against Women Act that offered a civil remedy for gender-based violence
83.
84.
85.
86.
87.
88.
89.
90.
91.
18 U.S.C. § 922(q)(1)(A) (1988 ed., Supp. V).
Lopez, 514 U.S. at 551.
Id. at 559.
Id. at 559–61.
Id. at 564.
Id. at 567.
Id. at 572–74 (Kennedy, J., concurring).
Id. at 566.
529 U.S. 598 (2000).
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exceeded Congress’ power under the Commerce Clause. Section 13981 of the
statute authorized a civil action to recover damages and equitable relief for
violent conduct that would constitute a felony under state or federal law
“committed because of gender or on the basis of gender, and due, at least in
part, to an animus based on the victim’s gender.”92 In the statute, Congress set
forth what the dissenters termed a “mountain of data”93 that violence against
women is very common in the United States and from this fact, Congress
concluded that such violence has a substantial effect on interstate commerce in
“deterring potential victims from traveling interstate, from engaging in employment in interstate business, and from transacting with business, and in places
involved in interstate commerce . . . [,] by diminishing national productivity,
increasing medical and other costs, and decreasing the supply of and the
demand for interstate products.”94
The majority rejected the argument of the petitioners, the federal government
and the victim of the rape that gave rise to the action, that the statute was valid
under the Commerce Clause in that violence against women in the United
States, taken in the aggregate, has a substantial effect on interstate commerce.
Writing for the Court, Chief Justice Rehnquist concluded that the case was
controlled by its previous decision in Lopez.95 On the basis of Lopez, the
majority found no difficulty in finding that the statute in Morrison exceeded
Congress’ commerce power because “[g]ender-motivated crimes of violence are
not, in any sense of the phrase, economic activity.”96 As in Lopez, the Court did
not question the substantial effects doctrine, yet it left open the possibility that
aggregated noneconomic activity might pass muster under the Commerce Clause.
However, the Court rejected the claim that gender-motivated violence, even
aggregated, could have the requisite effect on interstate commerce to support
the statute at issue in Morrison, stating that “[w]hile we need not adopt a
categorical rule against aggregating the effects of any noneconomic activity in
order to decide these cases, thus far in our Nation’s history our cases have
upheld Commerce Clause regulation of intrastate activity only where that
activity is economic in nature.”97 This is a substantial hedge in the Court’s
reasoning; while the Court refused to categorically reject the claim that noneconomic activity may be aggregated to produce the required substantial effect on
interstate commerce to support congressional regulation under the Commerce
Clause, it rejected just such a claim in Morrison. That is, the Court rejected the
claim that intrastate violence, even in the aggregate, may substantially affect
92. 42 U.S.C. § 13981(d)(1) (2000).
93. Morrison, 529 U.S. at 628–29 (Souter, J., dissenting).
94. Id. at 634 (Souter, J., dissenting) (quoting H.R. REP. NO. 103-711, at 385 (1994) (Conf. Rep.))
(modifications in original).
95. Id. at 613.
96. Id.
97. Id.
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interstate commerce for purposes of analyzing a statute’s constitutionality under
the Commerce Clause.
Like Lopez, Morrison is a qualification on the substantial effects test that
limits the application of that test to recognizably economic activity, regardless
of the activity’s effect on interstate commerce. Surely the Court had a sound
basis for rejecting the challenged provision in Morrison on the basis that the
noneconomic intrastate activity it regulated fell beyond the scope of Congress’
commerce power. The majority recognized that if Congress could regulate
gender-motivated intrastate violence, it could regulate other intrastate acts of
violence in the realm of “family law and other areas of traditional state
regulation since the aggregate effect of marriage, divorce, and childrearing on
the national economy is undoubtedly significant.”98 Both Lopez and Morrison
represent an effort to save the substantial effects test while imposing some kind
of limitation on the commerce power that preserves a distinction between
federal and state authority.
The dissenters in Morrison saw the majority’s opinion as a throwback to
pre-1937 Commerce Clause cases, which sought to erect categories of conduct
that Congress could not regulate. From the time of Wickard until Lopez, Justice
Souter argued, the Commerce Clause “extended to all activity that, when
aggregated, has a substantial effect on interstate commerce.”99 He suggested
that the categorizing of activity into economic and noneconomic for Commerce
Clause purposes constitutes an excessive formalism reminiscent of such decisions as Hammer v. Dagenhart100 and Carter v. Carter Coal Co.101 But above
all, Justice Souter’s and Justice Breyer’s dissents in Morrison reflect Professor
Balkin’s view that the Commerce Clause must be interpreted in such a way as to
preserve the New Deal, i.e., that in a modern economy there can be no
constitutionally meaningful distinction between economic and noneconomic
activity that imposes limits on Congress’ power to regulate under the Commerce
Clause.102 Justice Breyer’s dissent acknowledges the “serious” nature of subjecting all activity to federal regulation under the commerce power when, in the
aggregate, the activity has a substantial effect on interstate commerce.103 However, he rejects the feasibility of a judicial distinction of any sort based on the
subject of the legislation that would enable courts to impose limits on the reach
of that power.104 Both dissents conclude that Congress, not the courts, should
determine the proper scope of the commerce power.105
98. Id. at 615–16.
99. Id. at 637 (Souter, J., dissenting).
100. 247 U.S. 251 (1918).
101. 298 U.S. 238 (1936).
102. United States v. Morrison, 529 U.S. 643–44 (2000) (Souter, J., dissenting), id. at 661 (Breyer,
J., dissenting).
103. Id. at 660 (Breyer, J., dissenting).
104. Id.
105. See id. at 647 (Souter, J., dissenting).
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Morrison and Lopez represent efforts to preserve the distinction between
federal and state authority under the Commerce Clause from the substantial
effects test by erecting a distinction between economic and noneconomic
activity so that only intrastate economic activity that substantially affects interstate commerce may be regulated by Congress under its commerce power. At
the same time, these decisions sought to save the substantial effects test itself.
Rather than reject the substantial effects test, Morrison and Lopez simply
qualified it so that some limitation on the commerce power remains intact. In
the appropriate case, then, the question is whether an activity regulated by
Congress is economic or noneconomic in nature, but what appears to be a
simple, logical distinction is fraught with practical difficulty. This problem
arises because there is nothing inherent in the substantial effects test that
imposes a substantial or meaningful limit on federal power. It is not difficult, of
course, to determine whether an activity is commercial in nature where “commerce” denotes “trade or exchange.”106 Until Wickard, there had been no
question whether “commerce” involved some recognizably commercial activity,
but the advent of the substantial effects test in Wickard precludes establishing a
reliably principled means of carving out categories of activity that cannot,
logically or otherwise, have a substantial effect on interstate commerce. Instead,
the courts are left to determine, on an ad hoc basis, whether a specific activity is
sufficiently “economic” in nature to be a candidate for regulation under the
Commerce Clause. The Court’s decision in Gonzales v. Raich107 shows why the
distinction between economic and noneconomic activity under the substantial
effects test is a disservice to the Commerce Clause.
C. Gonzales v. Raich
108
In Gonzales v. Raich,
the Court applied the “substantial effects” test to
hold that the application of the Controlled Substances Act109 (“CSA”) to
persons who cultivated and used marijuana for their own medicinal purposes in
accordance with California law was a legitimate exercise of Congress’ power to
regulate interstate commerce. The respondents in Raich were patients who
cultivated marijuana plants and used them on advice from their physicians, as
authorized by the Compassionate Use Act under California law.110 The respondents did not argue that the CSA was facially invalid as an exercise of the
commerce power.111 Instead, they limited their claim to the CSA’s application to
them, since their cultivation and use of the drug did not involve interstate
commercial activity.112
106.
107.
108.
109.
110.
111.
112.
Barnett, Original Meaning, supra note 2 at 112.
545 U.S. 1 (2005).
Id.
21 U.S.C. §§ 801–971 (2000).
CAL. HEALTH & SAFETY CODE ANN. § 11362.5 (West Supp. 2005).
See Raich, 545 U.S. at 15.
See id.
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For the majority, Raich was an easy case, since Wickard “establishes that
Congress can regulate purely intrastate activity that is not itself ‘commercial,’ in
that it is not produced for sale, if it concludes that failure to regulate that class
of activity would undercut the regulation of the interstate market in that
commodity.”113 The Court distinguished Lopez and Morrison on the ground that
“the activities regulated by the CSA are quintessentially economic. ‘Economics’
refers to ‘the production, distribution, and consumption of commodities.’ The
CSA is a statute that regulates the production, distribution, and consumption of
commodities for which there is an established, and lucrative, interstate market.”114 In the case of personally cultivated and used marijuana, “the diversion
of homegrown marijuana tends to frustrate the federal interest in eliminating
commercial transactions in the interstate market in their entirety.”115 Thus, the
federal interest in destroying an interstate market authorizes Congress to reach
wholly intrastate activity.
Raich shows how the distinction between economic and noneconomic activity established by Lopez and Morrison is unworkable for applying the substantial effects test in a principled and consistent manner.116 The gun possession and
gender-based violence regulated by the statutes held invalid in those cases are
obviously noneconomic activities. The production of marijuana regulated by the
CSA, while obviously noncommercial, is potentially “economic” under the
broad dictionary definition the Court employed to analyze the statute in Raich.
The transition from “commerce” in the text of the Commerce Clause to “economic” in a dictionary is a profound expansion of the commerce power in and
of itself. Once the Court resolved to authorize the regulation of activities that
have a substantial effect on interstate commerce, rather than limit regulation to
commerce, it became difficult both logically and practically to draw a meaningful boundary between activities that are economic and noneconomic in nature.
The production of marijuana for one’s own medicinal use in Raich might, in the
Court’s broad sense, be “economic” activity, but it is in no sense commercial
activity. The substantial effects test, from its inception, rejected the requirement
that the activity to be regulated be commercial in nature. Indeed, rejecting that
requirement was the reason for creating that test in Wickard, where the activity
in question was potentially “economic” in nature but certainly not commercial.
Permitting Congress to regulate “economic” but noncommercial activity
through the substantial effects test promotes the regulation of noncommercial
activity through grand schemes of federal regulation to justify those schemes
under the Commerce Clause. Raich illustrates the distortion of policy encouraged by the “new era” of commerce jurisprudence. Congress did not intend for
113. Id. at 18.
114. Id. at 25–26 (quoting WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 720 (1966)).
115. Id. at 19.
116. See also Gerald G. Ashdown, Federalism’s Floor, 80 MISS. L.J. 69, 102 (2010) (“As Gonzalez
v. Raich proved, the economic or commercial limitation of Lopez and Morrison is not much of a
restriction on the commerce power.”).
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the Controlled Substances Act to reduce barriers to free trade among the states.
Instead, the Controlled Substances Act is an exercise of a federal police power
to protect the health and welfare of the people by outlawing commercial
transactions in dangerous drugs, and the regulation of commerce is merely a
means to its purpose. This is precisely the sort of power the Court had rejected
under the Commerce Clause in United States v. Dewitt.117 The Court’s decision
in Raich “announces a rule that gives Congress a perverse incentive to legislate
broadly pursuant to the Commerce Clause—nestling questionable assertions of
its authority into comprehensive regulatory schemes—rather than with precision.”118 Indeed, for the regulation of interstate commerce is a means only to
the implementation of the Controlled Substances Act and not the statute’s
purpose at all. The purpose of the Controlled Substances Act was not to regulate
economic activity as a matter of economic policy, much less an effort to reduce
restrictions on interstate trade. Instead, its purpose was to ban substances
deemed harmful to the public.
Before stating the finding that the banned substances had the requisite
connection to interstate commerce, Congress made the finding that “[t]he illegal
importation, manufacture, distribution, and possession and improper use of
controlled substances have a substantial and detrimental effect on the health and
general welfare of the American people.”119 The findings relating the substances
to interstate commerce do so only to declare that the substances move in
interstate commerce or have a substantial effect effect on interstate commerce.120 These findings are a jurisdictional hook that are, in fact, the means to
effectuate the statute rather than the purpose of the statute itself. The regulation
of the interstate market in such substances was subsidiary to the purpose of the
statute, which was simply to ban the substances outright. The Controlled
Substances Act is, in fact, an exercise of a federal police power, which the Court
had rejected before.121 The dissents in Raich recognize that the application of
the CSA to the respondents in that case invaded the state’s police powers,
replacing them with a federal police power instead.122 Justice Thomas, in fact,
suggested that the application of the CSA to the respondents made sense
because “Congress’ aim is really to exercise police power of the sort reserved to
the States in order to eliminate even the intrastate possession and use of
marijuana.”123
Congress lacks constitutional authority to ban substances for the “health and
general welfare of the American people,”124 because no enumerated power
117.
118.
119.
120.
121.
122.
123.
124.
76 U.S. 41 (1869). See supra, notes 41–42 and accompanying text.
Raich, 545 U.S. at 43 (O’Connor, J., dissenting).
21 U.S.C. § 801(2) (2006).
See 21 U.S.C. §§ 801(3)–(6) (2006).
See United States v. Lopez, 514 U.S. 549, 564 (1995).
Raich, 545 U.S. at 45, 50 (O’Connor, J., dissenting), id. at 64–65 (Thomas, J., dissenting).
Id. at 64 (Thomas, J., dissenting).
21 U.S.C. § 801(2).
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authorizes such legislation. Congress could not ban the substances under the
General Welfare Clause,125 because that provision is not itself a grant of
independent power but is only a qualification on the power to spend and tax.126
Both the majority opinion and Justice Scalia’s concurring opinion in Raich
justify the regulation of intrastate activity, in the form of cultivating and using
marijuana for personal medicinal use, by the application of the Necessary and
Proper Clause to the exercise of the commerce power. This step, as Scalia’s
concurrence makes clear, is required for federal regulation of intrastate activity
under the “substantial effects” prong of the commerce power, i.e., in order to
reach wholly intrastate activity, the government must show that it is necessary
and proper to do so in order to effectuate its regulation of interstate commerce.127 Since the purpose of the statute is to avoid dangers to the “health and
general welfare of the American people,” the regulation of interstate commerce
is only a means to achieve that goal, and the statute is not a proper exercise of
the power to regulate interstate commerce, which is limited to eliminating
barriers to interstate commerce. The General Welfare Clause is only a qualification of the power to spend and tax, and not itself an enumerated power that
authorizes congress to ban substances from interstate commerce, so the Necessary and Proper Clause does not authorize the regulation of intrastate activity
where the statute itself is not authorized by the commerce power.
Congress could have chosen the constitutionally permissible means of its
spending power under Article I, § 8, cl. 1, to achieve its goal of preventing
states from authorizing the use of medical marijuana under statutes such as the
California law at issue in Raich, in order to promote the general welfare of the
people. Congress has often used the threat of withholding federal grants in aid
in order to encourage states to adopt regulations that further a purpose Congress
seeks to advance, such as Megan’s law,128 and the drinking age,129 that address
intrastate matters for which there is no legitimate basis for Congressional
legislation under the interstate commerce power. These programs present an
honest means of achieving Congressional goals to the states and to the voting
public, and they allow states to fashion their own programs that satisfy broad
federal goals. If states reject policies encouraged by the federal government,
they can forego the financial benefits of compliance, and voters have the final
say over the fate of their federal and state representatives. But the courts’ virtual
abdication of their responsibility to enforce limits on the commerce power has
offered Congress a “perverse incentive”130 to fashion comprehensive schemes
of federal regulation under the guise of regulating interstate commerce, which
125.
126.
(1936).
127.
128.
129.
130.
U.S. CONST., Art. I, § 8, cl. 1.
See South Dakota v. Dole, 483 U.S. 203, 205 (1987); United States v. Butler, 279 U.S. 1, 65
See Raich, 545 U.S. at 34–38 (Scalia, J., concurring).
42 U.S.C. § 14071 (2006).
23 U.S.C. § 158 (2006).
Raich, 545 U.S. at 43 (O’Connor, J., dissenting).
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employ the commerce power as a means to achieve ends unrelated in themselves to the regulation of interstate commerce. A comprehensive scheme of
federal regulation of the “production, distribution, and consumption” of anything is a “blank check”131 to Congress under contemporary Commerce Clause
doctrine. The courts have thus encouraged the proliferation of comprehensive
schemes of federal regulation. This is not how the Constitution was sold to the
public that ratified it, and it in no way accords with the original purpose of the
Commerce Clause. Neither does the PPACA.
V. THE PATIENT PROTECTION AND AFFORDABLE CARE ACT
A chief purpose of the individual mandate in the PPACA is to increase the
risk pool by requiring virtually everyone to have health insurance. Congress
found that the large number of Americans, approximately fifty million, who lack
health insurance increases health care costs for providers and insurers, because
the uninsured receive health care without paying for it.132 These costs are
passed on to providers and insurers, resulting in higher insurance premiums for
insureds.133 Congress found that these economic effects of what amounts to
self-insurance by uninsureds affect interstate commerce.134 The PPACA includes several features designed to increase the number of insureds.135 Some of
these features are designed to prevent discrimination by insurers against persons
whose health conditions pose a high risk136 and essentially create a federal
entitlement to health insurance. I limit my discussion to one of these, the
individual mandate to purchase health insurance, because this feature is (a) the
provision in the PPACA most clearly subject to a Commerce Clause challenge
and (b) a new and truly “unprecedented”137 exercise of the commerce power,
requiring as it does individuals to purchase a consumer good or service on the
basis that doing so substantially affects interstate commerce. Indeed, this provision was recently held to be beyond the scope of the commerce power by the
Eleventh Circuit.138 It is very likely that the United States Supreme Court will
consider this issue in its next term.
The individual mandate is a requirement that virtually all Americans purchase
a consumer product specified by Congress. The PPACA imposes a penalty on
all but a small number of exempt persons who do not obtain “minimum
131. United States v. Lopez, 514 U.S. 549, 602 (1995) (Thomas, J., concurring).
132. See 42 U.S.C. § 18091(a)(2) (LEXIS, current through PL 112-28, approved Oct. 12, 2011).
133. See id.
134. See id.
135. See Florida ex rel. Atty. Gen. v. U.S. Dep’t of Health and Human Services, 648 F.3d 1235,
1246–1262 (11th Cir. 2011).
136. See id.
137. Spec. Studies Div., Cong. Budget Office, The Budgetary Treatment of an Individual Mandate to
Buy Health Insurance 1 (1994), available at http://www.cbo.gov/doc.cfm?index⫽4816&type⫽0.
138. See Florida ex rel. Atty. Gen., 648 F.3d at 1311.
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essential coverage,”139 which means a policy from a plan that satisfies the
statute’s requirements.140 There are two clear economic rationales for the
mandate. The first, which Congress declares in its findings, is that the large
number of uninsureds who do not pay for their health care imposes costs on
providers and insurers, which are ultimately paid for by insureds in the form of
higher premiums.141 The second is that many uninsureds are young and healthy
persons who prefer to save the cost of health insurance because they earn lower
incomes or regard themselves to be at a relatively low risk for being burdened
with high health care costs. By forcing such persons into the pool of insureds,
Congress seeks to prevent providers and insurers from incurring the cost of
uncompensated medical services.142 Congress also seeks to improve the risk
pool by requiring persons who pose a low risk for high health care costs to pay
premiums that exceed the costs of the medical services they receive through
their health plans.143 For these reasons, the individual mandate is a key feature
of the PPACA and essential to its purpose of reducing health care costs for
providers, insurers, and insureds.
The individual mandate is also a stunning exercise of Congress’ power under
the Commerce Clause. For the first time, Congress will require all but a few
Americans to purchase a consumer product. It is for this reason that the
Congressional Research Service cautioned Congress that the individual mandate
may be determined to exceed the scope of the commerce power.144 Some courts
have determined that the individual mandate exceeds Congress’ authority under
the Commerce Clause because it does not regulate commerce but instead forces
individuals into a market they otherwise would not choose to enter.145 In this
way, the individual mandate does not regulate commerce but coerces persons to
engage in commerce.
The conclusion that the individual mandate does not regulate commerce
because it forces people to engage in commerce is flawed. Under Lopez and
Morrison, Congress may not regulate activities that are not “economic” in
nature under its commerce power. The decision not to purchase health insurance
is, however, a “quintessentially economic”146 one. It is fundamental to microeconomics that every rational economic decision weighs the opportunity cost of
139. 26 U.S.C. § 5000A(a)–(b) (LEXIS, current through PL 112-28, approved Oct. 12, 2011).
Exempted categories of persons are specified in 26 U.S.C. § 5000A(d)–(e).
140. See 26 U.S.C. § 5000A(f)(1).
141. See 42 U.S.C. § 18091(a)(2).
142. JENNIFER STAMAN & CYNTHIA BROUGHER, CONG. RESEARCH SERV., RL 40725, REQUIRING INDIVIDUALS TO OBTAIN HEALTH INSURANCE: A CONSTITUTIONAL ANALYSIS 12 (2009).
143. See id. at 3.
144. See id.
145. See Florida ex rel. Atty. Gen. v. U.S. Dep’t of Health and Human Services, 648 F.3d 1235, 1311
(11th Cir. 2011); Florida v. United States Dep’t of Health and Human Services, 780 F.Supp.2d 1256,
1286 (N.D. Fla. 2011); Commonwealth of Virginia ex rel. Cuccinelli v. Sebelius, 728 F.Supp.2d 768,
782 (E.D. Va. 2010).
146. Gonzales v. Raich, 545 U.S. 1, 25 (2005).
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foregone purchases or investments.147 In other words, the decision not to
purchase health insurance is an affirmative decision to incur the opportunity
cost of going without health insurance in favor of making another purchase
instead. Every purchasing decision an uninsured makes necessarily includes the
opportunity cost of foregoing health insurance. Such decisions are certainly
“economic” in nature. The distinction between economic and noneconomic
activities should not defeat the individual mandate under the substantial effects
test because the uninsured’s decisions to incur the opportunity cost of foregoing
health insurance are economic activity on the market.
Once the threshold set by Lopez and Morrison is overcome, the “economic”
activity of making decisions to purchase goods and services other than insurance, in which the opportunity cost of foregoing health insurance necessarily
inheres, is subject to regulation by Congress. There can be little doubt that the
presence of millions of Americans making such decisions substantially affects
interstate commerce in the form of increased costs to providers, insurers, and
insureds. Taken in the aggregate, the intrastate decisions of individuals to spend
their money on things other than health insurance has a substantial effect on
interstate commerce. Congress, therefore, may mandate that individuals purchase health insurance.148 Under the substantial effects test, there is scarcely
anything that is not within the scope of the commerce power, as Justice Thomas
has urged.149
VI. THE COMMERCE CLAUSE AND AMERICAN DEMOCRACY
The Commerce Clause is a part of the federal system of government established by the Constitution. The Framers originally intended that Clause to
function as a component of a constitutional scheme that circumscribed the scope
of federal power and left most tasks of government to the states. As federal
regulation of economic activity grew in the nineteenth century in response to
industrialization and technological change, the courts sought to accommodate
the federal government’s efforts to regulate the economy, and one means the
courts used to accomplish this end was a broadening interpretation of the
Commerce Clause, which culminated in Wickard and its aggregation principle
combined with the substantial effects test.
The substantial effects test damages democratic accountability because it
encourages Congress to enact legislation under the guise of regulating interstate
commerce when the legislation is, in fact, intended to achieve goals unrelated to
regulating commerce. From Darby forward, the Court neglected Chief Justice
Marshall’s stricture in McCulloch v. Maryland150 that, under the Necessary and
147. See, e.g., James M. Buchanan, Opportunity Cost, in 6 THE NEW PALGRAVE DICTIONARY
ECONOMICS 198, 198–201 (Steven Durlauf et al. eds., 2d ed., 2008).
148. See Thomas More Law Ctr. v. Obama, 651 F.3d 529, 549 (6th Cir. 2011).
149. United States v. Lopez, 514 U.S. 549, 602 (1995) (Thomas, J., concurring).
150. 17 U.S. (4 Wheat.) 316 (1819).
OF
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Proper Clause’s qualification on the Congressional exercise of enumerated
powers,
[s]hould Congress, in the execution of its powers, adopt measures which are
prohibited by the constitution; or should Congress under the pretext of
executing its powers, pass laws for the accomplishment of objects not entrusted to the government; it would become the painful duty of this tribunal,
should a case requiring such a decision come before it, to say that such an act
was not the law of the land.151
Under the substantial effects test, and its diminished scrutiny under the Necessary and Proper Clause, Congress is relieved from the need to show that it is
regulating interstate commerce when regulating acts that, on their face, are not
matters of interstate commercial activity.152 The weak bar set by the substantial
effects test encourages Congress to use its interstate commerce power to reach
activities that are in no sense interstate commerce, but which Congress wishes
to regulate for other reasons, such as to placate organized interest groups.153
Finally, Wickard aggregation encourages Congress to erect broad regulatory
schemes, the purpose of which is to reach intrastate activity that Congress could
not otherwise regulate.154
The substantial effects test undermines democratic accountability because it
has encouraged the proliferation of regulatory schemes, the purposes of which
are often not apparent to the public and which, in fact, serve purposes that are
opaque to the voting public. The doctrine of enumerated powers serves democratic accountability in a federal system by assigning specific powers to the
national government. When the national government exercises those granted
powers, voters can determine whether they find an exercise of Congressional
power desirable for the purpose stated in support of the legislation authorized
by the specified power. They can then hold elected officials accountable for the
policy decisions made. This is the essence of democratic accountability in our
federal system, and the courts have eroded that accountability by means of the
substantial effects test, which has unhinged the commerce power from any
recognizable limitation to regulating interstate commerce.
From Lopez on, the courts have struggled to find some means of limiting the
151. Id. at 423. It appears that the Court’s expansive reading of the Necessary and Proper Clause in
United States v. Comstock, 130 S.Ct. 1949 (2010), which affirmed the authority of Congress to enact 18
U.S.C. § 4248 (2006), permitting the indefinite civil detention of mentally ill and “sexually dangerous”
prisoners after the completion of their sentences for punishments imposed pursuant to Congress’
enumerated powers, does not comport with Chief Justice Marshall’s stricture. See Comstock, 130 S.Ct.
1949, 1970–73 (Thomas, J., dissenting).
152. See Natelson, supra note 49, at 120–21; Randy E. Barnett, Commandeering the People: Why
the Individual Health Insurance Mandate is Unconstitutional, 5 N.Y.U. J.L. & LIBERTY 581, 591–92
(2010).
153. See Natelson, supra note 49, at 121–24.
154. See id. at 124–25.
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reach of Congress’ power to regulate under the substantial effects test. This
effort is a judicial response to a judicially created problem. The substantial
effects test has no roots in the text of the Constitution or the original intentions
of its Framers. It was not necessary for the Court to create the substantial effects
test in order to enable the federal government to respond to political demands
for economic regulation as the nation’s economy changed. Had the Court
adhered to the original intent of the Framers in interpreting the Commerce
Clause, its decisions would indeed have limited the legal capacity of Congress
to regulate economic activity under that provision. That limitation, remaining
faithful to the legal and political function of the Commerce Clause, would
almost certainly have forced the American people to engage in a debate about
the meaning and value of federalism as a system of intergovernmental relations.
The American people could have decided, and still could decide, that they
would prefer to alter the balance of federal-state relations by amending the
Constitution to change the Commerce Clause or to replace federalism with a
unitary system of government.
Instead, the Court forestalled a public debate about the meaning and value of
federalism by amending the Constitution itself with the substantial effects test.
The Court’s decisions creating and applying that test reflect a political, rather
than a legal, judgment that a modern economy requires extensive regulation by
the central government. Whether or not that judgment is an accurate one, it is
not the task of the judiciary to make such judgments. The Court’s approach in
its Commerce Clause decisions has deprived Congress and the American public
of the opportunity for a vigorous and honest public discussion about the role of
the federal government in our society and the proper balance between federal
and state authority. Congress, given a “blank check”155 by the Court, will
continue to regulate noncommercial activity under its commerce power and to
craft broad schemes of regulation of noncommercial conduct under the guise of
regulating interstate commerce.
The PPACA’s individual mandate offers a striking case of the political
mendacity encouraged by the Court’s Commerce Clause decisions. Congress
could have presented to the public a program that allowed uninsured Americans
to participate in a public scheme of health insurance and paid for the program
by imposing the level of taxation required to pay the program’s cost. The
Spending Clause clearly permits Congress to enact such a program. The political challenges to such a program would have been substantial, and perhaps fatal
in Congress. The PPACA was certainly more palatable in political terms because it did not impose any new taxes but forced more people into the risk pool
via the individual mandate. The mandate is in no sense a regulation of commercial activity, but it has been characterized as commercial regulation because
Congress chose to enact the statute under the Commerce Clause and thereby
avoided raising taxes to pay for a new entitlement program. Congress embedded
155. United States v. Lopez, 514 U.S. 549, 602 (1995) (Thomas, J., concurring).
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the mandate in a vast scheme of federal regulation and, indeed, the mandate is
essential to its effective operation. It is possible that these features of the
mandate will enable it to pass as a regulation of interstate commerce. If that
happens, our democracy will have suffered another blow; not only will the
American people have again been deprived of an opportunity to debate the
meaning and value of federalism, but they will also have been deprived of the
opportunity to debate the desirability of establishing a new federal entitlement
to health insurance.
CONCLUSION
The Articles of Confederation did not authorize Congress to eliminate barriers to interstate trade, and the resulting commercial and political conflicts
among the states, which were severe and obvious at the time, prompted the
Framers to empower Congress to establish domestic free trade. That was the
limited purpose of the Commerce Clause, and constitutionally permissible
commercial regulations under the interstate commerce power must serve that
national legislative interest. The substantial effects test, the doctrinal ancestry of
which predates New Deal Commerce Clause jurisprudence, has no roots in the
interest the Commerce Clause was intended to serve and should be abandoned.
The Supreme Court’s recent efforts to impose some meaningful limit on the
substantial effects test, beginning with Lopez, are inadequate qualifications on
the test that seek to preserve the test but do not preserve the federal structure our
Constitution erected.
That the substantial effects test should support the PPACA’s individual
mandate underscores its illegitimacy as an interpretation of the commerce
power. The Commerce Clause was by no means intended to authorize Congress
to force Americans to purchase any good or service, but, under the substantial
effects test, Congress may do just that. The substantial effects doctrine has
disserved democratic accountability by encouraging the proliferation of regulatory schemes in the name of regulating interstate commerce that have noncommercial interests as their principal objectives, which are concealed under the
cloak of purportedly commercial regulations. Rather than fostering debate
among the American public about the meaning and value of federalism, the
Supreme Court’s interstate commerce doctrine has forestalled such a debate. If
the Court upholds the PPACA, it will have again failed to serve democratic
accountability by precluding a valuable public debate about federalism and, in
this case, about the desirability of creating a federal entitlement to health
insurance.