A History of Interstate Commerce Part 3: The Expansion

The seminal event in expanding the commerce clause’s interpretation was the 1937 Supreme Court case National Labor Relations Board v. Jones & Laughlin Steel Corp. Not coincidentally, this was the first case to be decided after the switch in time that saved nine. Jones and Laughlin created a precedent for growing congressional authority that remained unchallenged until Lopez, nearly 60 years later.

Jones & Laughlin had been firing employees that wanted to unionize, in violation of the National Labor Act (commonly known as the Wagner Act). The National Labor Relations Board demanded that they rehire the employees, but the steel giants refused and sued. Jones & Laughlin argued that manufacturing is an intrastate activity. But the decision, handed down by Chief Justice Charles Evans Hughes, claimed 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.

This decision introduced the “substantial effects” doctrine, which seems reasonable enough. While labor relations certainly aren’t in the realm of interstate commerce, the case could be made that regulating labor relations is a necessary and proper step to regulate interstate commerce. But then, in 1942, we get the real kicker: the “aggregate effects” doctrine.

Remember the Gonzalez v. Raich case? In their decision, the Court used precedent from Wickard v. Filburn (1942), a similar case. During the Great Depression, the government restricted wheat production in order to drive up prices. Roscoe Filburn was growing wheat in excess of his allotment, but he consumed the excess wheat privately. It never went to market. Growing his own wheat meant that Filburn would buy less wheat from the market, so the Court found that it affected interstate commerce.

Note that this aggregate effects doctrine does not require the government to prove that the actions they are trying to prevent, in aggregate, actually do have a substantial effect. It is enough that that the government has a rational basis for believing that they will.

The Court, with its Jones and Laughlin and Wickard v. Filburn decisions, gave Congress a free pass to do almost anything it wants. And it certainly has.

For more info, check out Parts 1 and 2.