The Commerce Among the States Clause (or, “the Commerce Clause”) operates both as a power delegated to Congress and as a constraint upon state legislation. No clause in the 1787 Constitution has been more disputed, and none has generated as many cases.

To this day, the debate over the extent of the commerce power centers on the definitions of “to regulate,” “commerce,” and “among the several States.”

The narrowest definition of “to regulate” is to “make regular,” that is, to facilitate the free flow of goods, but not, except in cases of danger, to prohibit the flow of any good. Some scholars and a number of Supreme Court Justices have supported that narrow definition. In fact, in 1886, the House Judiciary Committee declared that a proposed bill that would have prohibited the sale of oleomargarine was against the original intent of the Framers. The Committee reasoned that the purpose of the Commerce Clause was to prevent state barriers to commerce, not to give Congress the power to do the same.

Nonetheless, the Supreme Court has never formally accepted a limited view of what “to regulate” means. From the beginning, Chief Justice John Marshall in Gibbons v. Ogden (1824) saw the power to regulate as coextensive with the other delegated powers of Congress. He declared: “This power, like all others vested in Congress, is complete in itself, may be exercised to its utmost extent, and acknowledges no limitations, other than are prescribed in the constitution.” In other words, “to regulate” is descriptive of the essential and core Congressional power to legislate. The manner in which Congress decides to regulate commerce, Marshall said, is completely at the discretion of Congress, subject only to the political check of the voters. Its exercise, therefore, is nonjusticiable. This power, as it later turned out, includes the power to prohibit the transportation of articles, as well as to control their exchange and the manner of transportation. In Champion v. Ames (1903), the Supreme Court (5–4) upheld a congressional ban on the interstate transportation of lottery tickets over the dissent on Chief Justice Melville Fuller, though all states at that time had prohibited such lotteries.

Even if “regulation” is a political question, the definition of “commerce,” however, is not up to Congress. It has an objective quality and is determinable by the courts. For many scholars such as Randy Barnett, Richard Epstein, and Raoul Berger, commerce means the trading, bartering, buying, and selling of goods, and they include the incidents of transporting those goods within the definition. Commerce would not include manufacturing or agriculture. Robert Pushaw and Grant Nelson assert a somewhat broader view, believing that commerce means “any market-based activity” having an economic component. Jack Balkin suggests a much more expansive concept, namely that the term “commerce” in the eighteenth century meant all forms of social and economic intercourse between persons, including but not limited to “traffic,” which was then the term for trade. The transportation of goods is not literally part of the exchange of goods, Balkin observes, but it would be part of commerce as intercourse.

Justice Clarence Thomas has embraced the limited definition of commerce as trade: “At the time the original Constitution was ratified, ‘commerce’ consisted of selling, buying, and bartering, as well as transporting for these purposes.” He noted that the etymology of the word com-merce meant “with merchandise.” United States v. Lopez (1995). Much of the modern Supreme Court’s jurisprudence, however, regards commerce as comprising “economic activity” generally.

In Gibbons v. Ogden, Chief Justice Marshall declared that commerce is more than “traffic,” that is, more than mere trade. It is “commercial intercourse,” which includes both trade and the manner in which trade is carried on. Thus, he held that the government, under the definition of commerce as he affirmed, had the right to prescribe the rules of navigation for trade.

Though Marshall’s notion of commerce was relatively narrow, his conception of the third term of the clause, “among the several States,” was quite broad. Some commentators have defined “among the several States” as the trading and movement of goods between two or more states. But Chief Justice Marshall thought “among” had a wider purview than would the word “between:” “Comprehensive as the word ‘among’ is, it may very properly be restricted to that commerce which concerns more States than one.” Although this was a broader concept, Marshall nonetheless saw that there is some commerce that Congress cannot reach: “The enumeration presupposes something not enumerated; and that something, if we regard the language or the subject of the sentence, must be the exclusively internal commerce of a State.” Purely local activities (i.e., commerce that does not concern “more States than one”), therefore, remain outside of the reach of Congress under the Commerce Among the States Clause.

After Gibbons v. Ogden, there was little occasion for the Supreme Court to investigate the breadth of federal commerce power until the late nineteenth century and the advent of national economic legislation. (However, the Court considered many cases involving the so-called dormant commerce power: the power of the states to enact legislation that affects interstate commerce when Congress is silent, i.e., has not enacted any legislation.) From 1895 on, the Court experimented with differing notions of the commerce power until 1938, when it signaled that it was abdicating any serious role in monitoring Congress’s exercise of this delegated power.

In United States v. E.C. Knight Co. (1895), the Supreme Court declared that the Sherman Antitrust Act could not constitutionally be interpreted to apply to monopolies in manufacturing, for “commerce” did not reach manufacturing. “Manufacture is transformation—the fashioning of raw materials into a change of form for use. . . . The buying and selling and the transportation incidental thereto constitute commerce.” Any effect manufacturing has on commerce was merely “indirect” and could not be reached under the commerce power.

This qualitative distinction between manufacturing and commerce held for forty years, but the Court was not ungenerous in otherwise upholding federal regulatory legislation. If companies engaged in price-fixing and marketing schemes, the Court held them to be “in commerce” and subject to Congress’s power to regulate commerce. Addyston Pipe & Steel Co. v. United States (1899). In an expansionary gloss to the qualitative distinction, the Court also held that goods in the “stream of commerce,” such as cattle at the Chicago stockyards and slaughterhouses on the way from farm to nationwide distribution, also fell under the commerce power. Swift & Co. v. United States (1905); Stafford v. Wallace (1922). Beyond manufacturing, the Court had earlier declared that insurance contracts were not items of trade and therefore could not be reached by Congress under the commerce clause. Paul v. Virginia (1869).

In Champion v. Ames, the Court added a new perspective on the commerce power. It eschewed any scrutiny on whether the purpose of congressional regulation of interstate commerce had to be focused on the regulation of goods in commerce, in this case, lottery tickets. So long as the good traveled across state lines, the Court held, Congress could regulate or prohibit it, even if Congress’s purpose was moral. The dissenters pointed out unsuccessfully that legislation to regulate morals had been traditionally left to the states under their police power. Soon thereafter, on this basis, the Court upheld the Pure Food and Drug Act, Hipolite Egg Co. v. United States (1911); legislation restricting interstate prostitution, Hoke v. United States (1913); and even personal immorality connected with interstate commerce, Caminetti v. United States (1917) (crossing a state line with a paramour, when no money exchanged hands). These cases stood for what later came to be called the “jurisdictional element” test, namely, that Congress could regulate the transportation and disposition of any item that travelled across state lines, and it was not clear that the item even had to be commercial.

Thus, outside of the “jurisdiction” test, the Court applied a limiting qualitative test to legislation, the purpose and effect of which was to regulate manufacturing, as in the laws regulating child labor, Hammer v. Dagenhart (1918), and railroad retirement plans, Railroad Retirement Board v. Alton Railroad Co. (1935). Manufacturing was not, in its nature, “commerce,” even though it might have an effect on commerce. Similarly, regarding commerce “among the several States,” the Court balked if Congress sought to regulate goods after their interstate transportation had come to rest, A.L.A. Schechter Poultry Corp. v. United States (1935), or before transportation had begun, Carter v. Carter Coal Co. (1936).

As limited as the Court’s use of the qualitative test was, an alternative test had begun to develop that would have approved even more congressional legislation. Traditionally ascribed to the opinion of Justice Charles Evans Hughes in the Shreveport Rate Case (1914), which permitted federal regulation of intrastate railroad rates to harmonize with interstate railroad rates, this quantitative test asserted that Congress could regulate a local activity, even manufacturing, if that local activity had a “substantial” effect on interstate commerce (i.e., “commerce which concerns more States than one” when the concern was “substantial”). Although Hughes’ language in the case could be read as referring, not to Congress’s power under the Commerce Clause, but rather to the Necessary and Proper Clause (Article I, Section 8, Clause 18), the case became symbolic of a turn towards an expansion of congressional legislative power under the Commerce Clause itself. Over the next two decades, a minority of Justices continued to argue in favor of a quantitative test. The dispute between those espousing a qualitative version of the power and those supporting a quantitative interpretation increased during the 1930s as more extensive federal regulatory legislation came before the Supreme Court.

In 1935, Justice Benjamin N. Cardozo, concurring in the unanimous opinion in Schechter, suggested a test that would allow the government to regulate local activities if they had a proximate or foreseeable effect on interstate commerce: “The law is not indifferent to considerations of degree. Activities local in their immediacy do not become interstate and national because of distant repercussions.” The following year, in striking down the Bituminous Coal Conservation Act in Carter v. Carter Coal Co., the Court seemingly accepted Cardozo’s proximate cause test. (Cardozo dissented from the decision on procedural grounds.) Writing for the majority, Justice George Sutherland declared: “The word ‘direct’ 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.”

A year later, in NLRB v. Jones & Laughlin Steel Corp. (1937), Chief Justice Hughes, in upholding the National Labor Relations Act’s regulation of factory working conditions, clearly rejected the qualitative test. But he filled his opinion with overlapping justifications, some sounding in the quantitative test language, or again a possible use of the Necessary and Proper Clause, but the proximate cause language was prominent. The commerce power could not reach activities that were “indirect and remote,” he wrote. Federal power could reach those activities that have a “close and intimate effect” on interstate commerce. An industry organized on a national level had such an effect, he declared. Soon, however, Justice Cardozo died, and other Justices retired. By 1941, in United States v. Darby, it was clear that the new majority rejected the qualitative test and the causal tests in Schechter, Carter, and Jones & Laughlin. Instead, the Court fully embraced a very expansive quantitative test and, as events were to show, these Justices were able to find that any local activity, taken either separately or in the aggregate, Wickard v. Filburn (1942), always had a sufficiently substantial effect on interstate commerce to justify congressional legislation. By these means, the Court turned the commerce power into the equivalent of a general regulatory power.

The Court invoked newly expanded interpretation of the commerce power to approve wider federal criminal legislation as well as major social reforms such as the Civil Rights Act of 1964. But in United States v. Lopez and United States v. Morrison (2000), the Supreme Court limited Congress’s power under the Commerce Clause for the first time since in the 1930s. In Lopez, Chief Justice William H. Rehnquist wound his way among the Court’s precedents to strike down a federal law that had criminalized the possession of a gun near a school. He declared that the commerce power extended to: (1) “the use of the channels of interstate commerce”; (2) the regulation of “instrumentalities of interstate commerce, or persons or things in interstate commerce”; and (3) a local commercial activity having a “substantial relation” to interstate commerce. Rehnquist emphasized two points in his opinion. First, possessing a gun is not a commercial activity, and the effects prong of the commerce power only applies when the regulated activity is commercial. Second, he insisted that the rule of substantial effects must be observed. In his opinion, Chief Justice Rehnquist did not overrule any prior case.

Justice Stephen G. Breyer, for the dissent, agreed that there are limits to the commerce power—it does not grant a general federal police power. But he could not express what those limits were. He argued that there is a sufficient connection between guns near schools, the impact on the educational process, and the eventual connection to the nation’s economy to justify the regulation, but he could not, under his formula, put forward any activity that could not thus be reached by Congress under the Commerce Clause. Concurring with the majority, Justice Thomas suggested that, upon the proper occasion, the Court should reexamine some of its more expansionary precedents dealing with the “affects” test, implying that he would revive the qualitative test instead.

Subsequent to the decision, Congress amended the law, requiring that the particular gun found in possession near to a school must be shown to have traveled in interstate commerce, thus validating the law under the “jurisdictional element” test. Later, Justice Thomas urged that, even while the “substantial effects” remains current Supreme Court doctrine, it should be applied to limit the “jurisdictional element” test. Thus, Thomas would require that any item travelling across state lines could only be regulated if it could be shown to have exerted a substantial effect on interstate commerce. Alderman v. U.S. (2011) (Thomas, J., dissenting).

In United States v. Morrison, the Court struck down a suit for damages for rape, even though the suit would have been permitted under the Violence Against Women Act. Here, Chief Justice Rehnquist explained Lopez by emphasizing that noneconomic activities (violence against women, or violence against men, or violence in general) could not be aggregated to establish a substantial connection to interstate commerce. Moreover, Rehnquist asserted that it was the Court’s independent duty to determine whether a regulated activity is commercial and whether it substantially affects commerce, even if Congress has explicitly found otherwise, a position that the Court earlier adopted in Jones & Laughlin. As Justice Hugo Black had earlier noted in Heart of Atlanta Motel v. United States (1964): “whether particular operations affect interstate commerce sufficiently to come under the constitutional power of Congress to regulate them is ultimately a judicial rather than a legislative question, and can be settled finally only by this Court.”

However, a majority of the Supreme Court reaffirmed the expansive scope of the commerce power in Gonzales v. Raich (2005). In that case, the Court found that the federal Controlled Substances Act (CSA) preempted a California law that legalized marijuana—in this case, totally locally home-grown marijuana— for medicinal uses. The Court found that marijuana was a commercial product, albeit illegal, and, citing Wickard v. Filburn, found that the aggregate effect of home-grown marijuana substantially impacted the federal government’s legitimate policy of controlling certain illegal substances.

Thus, the line that the Court has drawn is between an activity that is “commercial” or economic and one that is not. Non-economic activities cannot be aggregated to show a substantial effect on commerce, but economic activities, no matter how small or local, can be so aggregated. In National Federation of Independent Business v. Sebelius (2012), by a narrow majority, the Supreme Court added an additional line: the government may not aggregate the economic affects of a commercial inactivity (a decision not to buy insurance) to find that there is a substantial effect on commerce. In fact, for the first time since Gibbons, the Court glossed the meaning of “to regulate.” Congress, the Court declared, has the power to regulate an activity, but an inactivity, by its nature, does not yet exist and cannot be regulated.

As noted earlier, lurking behind the debate over the commerce power and occasionally hinted at in some of the Court’s opinions is the Necessary and Proper Clause. In Gibbons v. Ogden, Chief Justice Marshall noted that there may be some “internal concerns” with which it may be “necessary to interfere, for the purpose of executing some of the general powers of the government.” Thus, even if the commerce power in and of itself cannot reach particular local activities, Congress may still be able to regulate them if to do so has an appropriate connection to commerce. As Marshall said five years before Gibbons in McCulloch v. Maryland (1819):

Let the end be legitimate [for example, the protection of interstate commerce], let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional.

As Marshall stated it, the required connection between the regulation of the local activity and the protection of Congress’s policy on interstate commerce may produce a connection similar to what later became the proximate cause test devised by Justice Cardozo in Schechter and developed by Justice Sutherland in Carter v. Carter Coal.

One should also recall Marshall’s limitation, again from McCulloch v. Maryland, on the uses of the Necessary and Proper Clause (see Article I, Section 8, Clause 18 for a fuller explication):

Should 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.

It would follow that Congress could regulate a local activity only if its purpose comports with its delegated power to regulate commerce and the regulation is plainly adapted to its interstate commerce purpose.

The “substantial effects test” could be recast as falling under the Necessary and Proper Clause. But in his concurrence in Gonzales v. Raich, Justice Antonin Scalia separated the Necessary and Proper Clause from the substantial effects test. He rejected the substantial effects test as “incomplete,” and he thus found that locally grown marijuana could not be reached directly under the commerce power. Rather, he argued, “The regulation of an intrastate activity may be essential to a comprehensive regulation of interstate commerce even though the intrastate activity does not itself ‘substantially affect’ interstate commerce.” He decided therefore that prohibiting locally grown marijuana was “necessary and proper” to the integrity of Congress’s overall regime of regulating controlled substances. In dissent, Justice Thomas argued against the use of the Necessary and Proper Clause in this case. He declared that punishing persons who had grown their own marijuana for their own medicinal purposes was not “plainly adapted” to maintaining the coherence of the federal controlled substances program. Nor was it “proper” for the federal government to prohibit a non-economic activity under the guise of protecting interstate commerce.

The second constitutional role of the Commerce Clause is to act as an extrinsic restraint on state legislation that may impede or intrude upon interstate commerce. The Supreme Court has built up a prodigious amount of case law commentary on the Commerce Clause when it is in its “dormant” state.

The traditional view is that the Constitution grants Congress plenary power over interstate commerce. Justice Scalia agrees that Congress has plenary power (it can control all aspects of interstate commerce), but denies that it has exclusive power. Thus, he believes that the states can enter the field until Congress acts. Tyler Pipe Industries v. Washington State Department of Revenue (1987). But for the majority of Justices, the Commerce Clause operates as a limit on the legislative powers of the states even when Congress has not acted.

If Congress has legislated upon a subject within its commerce power, then, due to the Supremacy Clause (Article VI, Clause 2), any state law to the contrary falls. Congress may even consent to state regulation that directly regulates interstate commerce. Prudential Insurance Co. v. Benjamin (1946). But the question remains. To what extent may a state legislate upon a subject that impacts interstate commerce in the absence of congressional action? Does it matter if the state law discriminates against interstate commerce, either in purpose or effect?

It was inevitable that the states, even in the honest exercise of their police powers, would trench on interstate commerce. How far the states can even incidentally intrude upon interstate commerce has been the subject of scores of Supreme Court cases, often with inconsistent holdings. A detailed treatment of that complicated history is beyond the scope of this essay, but in 1970 in Pike v. Bruce Church, Inc., the Court consolidated its dormant Commerce Clause jurisprudence into the following test: “Where the [state] statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.”

A few decades ago, some scholars opined that the Pike test was a codification of an ad hoc balancing test. More recent scholarship, however, has indicated that the Supreme Court rarely, if ever, decides a dormant Commerce Clause case on balancing grounds since it would be attempting to compare incommensurables. Rather, the Pike test describes a series of separate standards by which a state statute can be determined to be within its constitutional powers.

Those determinative principles for state statutes are as follows:

1. The statute must have a “legitimate” and “public” purpose. It must be within the state’s police power, and not designed either to regulate interstate commerce as such, or to discriminate against out-of-state economic interests in favor of private in-state interests in the same market. If, however, the state is acting as a “market participant” similar to a private entity, the dormant Commerce Clause is not a bar to its economic decisions even if they impact or discriminate against interstate commerce, though the Privileges and Immunities Clause of Article IV may be a constraint.
2. The effect on interstate commerce must be “incidental” rather than the primary purpose of the statute.
3. The interest must be “local.” It must regulate elements that are peculiar to the state, such as its harbors, and not impose a pattern of “multiple inconsistent burdens” with other states’ conflicting laws on an interstate enterprise.
4. The statute must “regulate even-handedly,” that is, its impact may not be discriminatory absent compelling reasons.
5. The statute must “effectuate” its local public interest. If there is little evidence of such a result, the court may infer that the interstate impact was intentional and hence unconstitutional, after all.

If a state statute survives all these criteria, it will be upheld unless the burden imposed on interstate commerce is “clearly excessive” in relation to the asserted local benefits. This last clause is indeed a balancing test (weighted in favor of the state), but the Court rarely, if ever, reaches it, preferring to decide the issue on one of the antecedent principles.

Justice Scalia does not believe the Court should be monitoring the states’ impact on interstate commerce, outside of discrimination against interstate commerce or creating multiple inconsistent burdens. CTS Corp. v. Dynamics Corp. of America (1987) (Scalia, J., dissenting). He believes that the Constitution gives the power to Congress to cure (or approve of) any excessive state action by legislation. Justice Thomas would rather use the Import-Export Clause to strike down state discriminations against interstate commerce. Camps Newfound/Owatonna, Inc. v. Town of Harrison (1997) (Thomas, J., dissenting).