Subjects of Commerce

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SUBJECTS OF COMMERCE

A chief purpose of the commerce clause of the federal Constitution is to assure the free movement of the subjects of commerce among the several states. What are these subjects? Essentially, the term refers to things sold or transported in interstate commerce. But they need not be articles of trade or even of value. Nor are they confined to objects as such. They may include persons. All are included as subjects or articles of commerce when they begin to move from one state to another. They remain articles of commerce until they fall into the possession of the ultimate buyer or reach their final stage of repose within a given state. Thus, at any point between the beginning and the end of their journey among the states, they are legitimate candidates for congressional regulation. With respect to these subjects, as with interstate commerce generally, Congress may, in the words of gibbons v. ogden (1824), "prescribe the rule by which commerce is to be governed."

Congress ordinarily exerts its power over the subjects of commerce in order to protect their free movement across state borders. But this power has also been construed to permit Congress to divest some subjects of their interstate character. Divestment occurs when Congress prohibits the interstate transportation of certain goods or persons. Examples of such subjects are stolen automobiles, intoxicating beverages, forged checks, convict-made goods, explosives, prostitutes, firearms, lottery tickets, and kidnaped children. Federal laws prohibiting commerce in such subjects are usually designed to assist the states in fighting crime or protecting their citizens against social, moral, or economic harm. (See national police power.) But Congress has also banned the interstate shipment of ordinary objects of trade, like lumber, in opposition to state policy. Any such federal law must of course bear a reasonable relationship to interstate commerce. Thus, according to united states v. darby (1941), Congress may validly bar the interstate shipment of goods produced in violation of a federal maximum hour and minimum wage law so that "interstate commerce [does not become] the instrument of competition in the distribution of goods produced under substandard labor conditions."

The commerce clause, however, is not merely an authorization to Congress to enact laws for the protection of the subjects of commerce. It serves also by its own force to prevent the states from erecting trade barriers or passing any legislation that would obstruct the movement of goods from state to state. As a practical matter the states, not Congress, regulate most subjects (and aspects) of commerce. They may do so out of a legitimate concern for the health, welfare, and safety of their own citizens. Yet, the exercise of this valid state police power is often in tension with the value of free and open borders that informs the commerce clause. (See state regulation of commerce; state taxation of commerce.)

A central development in modern commerce clause jurisprudence is the Supreme Court's identification as legitimate articles of commerce many subjects historically regarded as the exclusive preserve of the states. Such subjects include insurance contracts, natural resources, fish and wild game, and even valueless material such as solid and liquid wastes. Prevailing doctrine holds that the shipment in and out of the states of these subjects of commerce is protected by the commerce clause unless Congress ordains otherwise. Most recently, in Sporkase v. Nebraska (1982), the Supreme Court added ground water to its list of legitimate subjects of commerce. As the Court noted in philadelphia v. new jersey (1978), no object of interstate trade is excluded by definition from this list.

Still the tension between state power and the commerce clause remains. In the watershed case of cooley v. board of wardens (1851) the Court tried to resolve this tension by declaring that states may not regulate a subject of commerce the nature of which requires a single (national) uniform plan of regulation, even in the absence of any federal law. The Cooley rule has not yielded a long list of particular subjects requiring exclusive national regulation. It has been applied mainly to identify subjects whose number and diversity might require, when regulated, local knowledge and experience. State or local regulation of such subjects, whether justified to facilitate trade or to protect the public, is valid unless it conflicts with a law of Congress. Cooley itself upheld state regulation of harbor traffic, over commerce clause objections, because of the local peculiarities of port facilities.

Today, however, the Court rarely finds the Cooley rule applicable. The modern approach to commerce clause analysis applies a "balancing" test that weighs the interest served by a local regulation of a subject of commerce against the regulation's burden upon interstate commerce. If the burden substantially outweighs the local benefit, even if the legislation is nondiscriminatory, the regulation is unlikely to survive constitutional analysis. (If the Cooley rule forbids state regulation there is of course no balancing.) Generally, an article of commerce, although it may be taxed or regulated by the state, may not be so burdened as to prevent or seriously to obstruct its transportation in interstate commerce.

Yet the states do bar some "subjects of commerce" from entering their borders. Local inspection laws, for example, may exclude goods such as diseased cattle, adulterated food, and infectious plants. Such articles do not fall within the Court's classification of legitimate subjects of commerce. Correspondingly, the states may validly prevent some goods from leaving their borders. Certain natural resources, like rare birds and fish, may be withheld from commercial exploitation altogether. Such resources assume the character of subjects of commerce, however, when they are permitted legally to be sold or are reduced to personal possession. At that point, even though the private acquisition of such resources may be regulated by law in the interest of their preservation, the states are generally forbidden to restrict their use or sale to their own citizens.

Donald P. Kommers
(1986)