Art. I, § 8 Necessary and Proper Clause: McCulloch v. Maryland (1819)
- So long as the objective is legitimate and within the scope of Congress’s power, the Constitution gives Congress discretion to adopt any means that are appropriate and plainly adapted to that objective.
- Allowing states to tax the operations of federal government would effectively impede its power.
Summary of Commerce Power Congressional Regulatory Scope
(1) The channels of interstate commerce (e.g., highways, airports, railroads);
(2) Persons or things in interstate commerce (e.g., interstate shipment of goods produced by employees paid below minimum wage (U.S. v. Darby)); and
(3) Activities that effect interstate commerce, including individual activities that, in aggregate, have a substantial effect a commercial market (e.g., Wickard v. Filburn (wheat); Gonzales v. Raich (marijuana); Heart of Atlanta Motel v. U.S.).
How do courts determine “substantial effect on a commercial markets”?
a. Court defers to Congress’s judgements as to whether an economic activity has substantial effect on interstate commerce, so long as it is rational. (Gonzales; Perez v. U.S.)
b. Court has been skeptical of Congress’s power to regulate purely local non-economic activity based on its aggregate effects on interstate commerce, and therefore been less
deferential to Congress’s findings in this context. (Lopez; Morrison)
c. Regulation of commerce does not extend to compelling people to participate in commerce. (NFIB v. Sebelius
Overview of Lockhart Era (1890-1937)
- “Commerce” defined as “intercourse for purpose of trade” (Carter v. Carter Coal Co. (1936)).
- Among states means “in stream of commerce” (Schechter Poultry v. US (1935)).
- Tenth Am. Reserves certain activities for state regulation (Hammer v. Dagenhart (1918)).
New Deal Expansion of Commerce Power
(1) NLRB v. Jones & Laughlin (1937): Congress may regulate intrastate activities “if they have such a close and substantial relation to interstate commerce
(2) Darby v. US (1941): Congress may regulate areas that are typically within states’ police power, so long as they also fall within commerce power (overruling Hammer v. Dagenhart)
(3) Wickard v. Filburn (1942): “Whatever the nature of activity, it may be reached by Congress if it exerts a substantial economic effect on interstate commerce, even if that effect is “indirect.”
Civil Rights & Commerce Power
Discriminatory practices in lodging or accommodations have a substantial and harmful effect on interstate commerce. (Heart of Atlanta Motel v. US (1964)) (Katzenbach v. McClung (1964)).
US v. Lopez (1995): Scope of Commerce Power
Reasoning: Commerce power extends to: (1) instrumentalities; (2) channels; and (3) activities that substantially effect interstate commerce
Dissent: Three principles in our commerce jurisprudence: (1) Can regulate activities that substantially effect commerce; (2) can consider effects in aggregate, rather than individually; and (3) give Congress deference in deciding what effects commerce
US v. Morrison (2000): Restricting Scope of Commerce Power
Reasoning: Pet’r’s reasoning would allow Congress to regulate any crime, family law, etc., as long as the nationwide, aggregated impact has substantial effects on employment, production, transit, or consumption.
Dissent: We rejected the distinction between economic/non-economic activities in Darby and Wickard, and the court is returning to it not b/c of its logical soundness, but for ideological reasons, just as the pre-1937 jurisprudence was motivated by a particular ideology.
Gonzalez v. Raich (2005): Commerce Power & Drugs
Reasoning: This case differs from Lopez and Morrison because those laws were not part of a larger scheme of economic regulation; whereas here, the Controlled Substances Act regulates economic activity—i.e., the “production, distribution, consumption of commodities.(marijuana)”
Dissent: This reading of Lopez suggests that Congress can regulate any intrastate non-commercial activity, so long as it finds that doing so is integral to an interstate regulatory scheme. (“Drafting guide” for Congress to regulate intrastate activity.)
Basic Idea of Spending Power
- Under the necessary and proper clause, Congress may enact legislation that is rationally related to implementing another constitutionally enumerated power, e.g., commerce power or spending power (McCulloch v. Maryland; Sabri v. U.S.; NFIB v. Sebelius).
- The power to tax and spend in the general welfare “gives Congress considerable influence in areas it may not directly regulate. It may enact a tax on activity that it cannot authorize, forbid, or otherwise control.” (NFIB v. Sebelius)
Limitations of Spending Power: South Dakota v. Dole
o Must be “in the general welfare,” and Court defers to Congress on this;
o Congress must make the condition explicit and unambiguous at the time the states choose to accept the grant;
o The condition must be related to the purpose of the program; and
o The condition must comply with other constitutional provisions, including the Tenth Amendment.
Non-Coercion Principle: Tenth Am. & Spending Power
- While Congress may condition funds, it may not make that condition so coercive that deprives states of a legitimate choice as to whether to accept the condition. (NFIB v. Sebelius; South Dakota v. Dole)
- No bright line rule as to what makes a condition overly coercive, but we know that 5% of federal highway funds is not overly-coercive (South Dakota v. Dole), whereas withdrawing all Medicaid funding, including grants under preexisting Medicaid programs (which equals 10% of the states’ total budgets), is unconstitutionally coercive (NFIB v. Sebelius)).
Butler v. US (1936) Expansion of Spending Power
“While . . . the power to tax is not unlimited, its confines are set in the clause which confers it, and not in those of section 8 which bestow and define the legislative powers of Congress. It results that the power of Congress to authorize expenditures of public moneys for public purposes is not limited by the direct grants of legislative power found in the Constitution.”
Sabri v. US (2004): Spending Power & Tax Appropriation
- Congress has authority under Art. I, Sec. 8, Cl. 1 (Spending Clause) to appropriate money for general welfare.
- Congress has authority under Art. I, Sec. 8, Cl. 18 (Necessary and Proper Clause) to ensure that this money is spent for the purpose of the program, and not fettered off to graft or corruption. (See McCulloch v. Maryland)
- Money is fungible.
South Dakota v. Dole (1987): Limitations on Spending Power
- Congress may attach conditions to the receipt of federal funds that are designed to ensure compliance with the public policy goals of the spending program.
- Spending power is subject to several limitations: (1) Must be “in the general welfare,” and we defer to Congress on this; (2) Congress must make the condition explicit and unambiguous at the time the states choose to accept the grant (Pennhurst v. Halderman); (3) The condition must be related to the purpose of the program; and (4) The condition must comply with other constitutional provisions (e.g., 10th Amendment).
NFIB v. Sebelius (2012): Affordable Care Act; Commerce AND Necessary & Proper Clauses
Rule: Congress can regulate activities with a “substantial effect on interstate commerce,” including “activities that do so only when aggregated with similar activities of others,” and we defer to Congress’s judgements, so long as they are rational (Gonzales; Wickard)
Majority (Roberts, Scalia, Alito, Thomas, Kennedy): Allowing congress to justify federal regulation by pointing to the effect of inaction on commerce would bring countless decisions an individual could potentially make within the scope of federal regulation . . . .”
Dissent (Ginsburg, Breyer, Kagan, Sotomayor): Under N&P power, Congress can impose requirements that are “reasonably adapted” to a permissible end, i.e., regulation of commerce, and this requirement is reasonably adapted to regulating prices in the market for health care.
NFIB v. Sebelius (2012): Affordable Care Act; Individual Mandate & Spending Clause
Rule: The power to tax and spend in the general welfare “gives Congress considerable influence in areas it may not directly regulate. It may enact a tax on activity that it cannot authorize, forbid, or otherwise control.”
Majority (Roberts, Ginsburg, Breyer, Kagan, Sotomayor): Court will assume that an incentivizing payment is a tax.
Dissent (Scalia, Alito, Thomas, Kennedy): We have never classified a tax as an exaction imposed for violating the law, or as something described in legislation as a penalty.
NFIB v. Sebelius (2012): Affordable Care Act; Medicaid Expansion & Spending Clause
Rule: Congress can impose conditions on grants to the states, but when indirect or direct“ pressure turns to compulsion, the legislation runs contrary to our system of federalism.
Majority (Roberts, Breyer, Kagan; Scalia, Alito, Thomas, and Kennedy, concurring): When conditions take the form of threats to terminate other significant independent grants, the conditions are properly viewed as a means of pressuring states to accept policy changes.”
Dissent (Ginsburg and Sotomayor): Congress is not threatening to cutoff funds from an “independent grant,” it is revising the terms of existing Medicaid program, as it routinely does.
Summary of Anti-Commandeering Doctrine
Because the Tenth Amendment is designed to reserve some sovereignty for states, Congress may not require the state or state officials to regulate, either directly (e.g., N.Y. v. U.S.; Printz v. U.S.; Murphy v. NCAA), or indirectly through a coercive condition on a federal grant (NFIB v. Sebelius).
NY v. US (1992): Anti-Commandeering Doctrine; Enumerated Power
- The Tenth Amendment implies that there are limits on Congress’s power derived from principles of federalism and state sovereignty.
- Congress cannot “commandeer the legislative process of states by directly compelling them to enact and enforce a federal regulatory program.”
- Congress could incentivize states with spending power, or by giving states a choice between carrying out a program themselves or having the federal government do it.
Printz v. US (1997): Anti-Commandeering Doctrine; When the Constitution is Silent
- Constitution’s text does not speak directly to this question, we look to (1) historical understanding/practice, (2) the structure of the constitution; and (3) this Court’s jurisprudence
- Allowing Congress to direct state officials to enforce federal laws would threaten separation of powers between the states and federal government, and between Congress and the federal executive branch.
Reno v. Condon (2000): Requiring is (Likely) Commandeering
- This case is different from N.Y. v. U.S. and Printz v. U.S. because the law does not
require states to regulate their own citizens, to enact laws or regulations, or to participate in enforcing federal laws. - This case is governed by South Carolina v. Baker (1988), which upheld a statute that prohibited States from issuing unregistered bonds because the law “regulate[d] state activities,” rather than “seek[ing] to control or influence the manner in which States regulate private parties.”
Murphy v. NCAA (2018): Policy and Anti-Commandeering Doctrine
- The anti-commandeering doctrine, though relatively recent, expresses the “fundamental structural decision incorporated into the Constitution—i.e., the decision to withhold from congress the power to issue orders directly to the States.”
- Serves 3 values: (1) separation of powers; (2) political accountability; (3) prevents cost-shifting
- This violates the anti-commandeering doctrine because it is a direct order to state legislatures as to what they may or may not do.
- Different from a preemption provision because it does not regulate private conduct, but instead directs states to prohibit conduct
