limiting state power.
So long as a federal regulation impacts interstate commerce, that regulation can be described as
constitutional, according to the commerce clause. However, since the Constitution was first written, there have
often been occasions when the judiciary system has needed to step in to interpret the meaning and
implications of the commerce clause. In particular, there have been disputes over the intended meaning of the
phrase “among the several States.” Up until the 1930s, this phrase was interpreted in a literal way, so that
activities subject to federal regulation were required to involve trade between the states. This strict
interpretation actually served to limit the federal regulation of commerce.
The turning point in the interpretation of the commerce clause came with the 1937 case, NLRB v. Jones &
Laughlin Steel Corp. The previous year, in the Carter v. Carter Coal Co case, the court invalidated a program,
initiated under the New Deal, that had tried to regulate the labor practices of coal firms on the basis that these
practices were local, and therefore had only an indirect impact on interstate commerce. In NLRB v. Jones &
Laughlin Steel Corp, the court deviated from that decision by ruling that Congress could regulate employment
practices at a steel plant because any stoppages at that plant would have a serious, detrimental impact on
interstate commerce. The court concluded that since the steel industry is a networked industry that
incorporates mines, plants, and factories from Minnesota to Pennsylvania, the manufacturing of steel properly
falls under the jurisdiction of the commerce clause. In summing up, the court concluded that:
Challenges to and Reinterpretations of the Commerce Clause
Ever since the NLRB v. Jones & Laughlin Steel Corp case, Congress has invoked the commerce clause to rule on
a diverse range of business and commercial activities, as well as to support social reforms that indirectly
impact state commerce. Examination of the United States Code reveals that there are more than 700 legislative
provisions that explicitly refer to foreign or interstate commerce. What is perhaps most remarkable is the
sheer diversity of statutory areas covered by the commerce clause. Areas covered include the regulation of
sporting activities, endangered species, energy regulation, gambling, firearms control, and even terrorism.
Examples of Federal Legislation Passed by Invoking the Commerce Clause
•
The Controlled Substances Act
•
The Federal Mine Safety and Health Act
•
The Civil Rights Act
•
Americans with Disabilities Act
•
The Indian Child Welfare Act
While businesses have often challenged these statutes as existing outside of the realm of congressional
authority, in most cases, the courts have upheld the statutes as being valid exercises of congressional power in
E X A M P L E  4 . 1
“Although activities may be intrastate in character when separately considered, if they have such a close and
substantial relationship to interstate commerce that their control is essential or appropriate to protect that
commerce from burdens or obstructions, Congress cannot be denied the power to exercise that control”
(NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1 1937).
Chapter 4 Business and the United States Constitution
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