Exam 3 Flashcards
Federalism
Framers chose this
a system in which a constitution divides governmental power between a central government and one or more subdivisional governments, giving each substantial
functions”
Major concern of Federalism is the complexity of
a decentralized system
Currently- 1 national government, plus 50 states (plus DC plus territories…), each with their own set of laws and political culture
Supreme Court is shaping federalism
Constitution is a contract, but between whom?
national gov and people or states
ratification clause vs we the people
Nation-State Relations
Parts of Constitution that play a big role
- Parts of Constitution that play a big role
– Necessary and proper clause (implied congressional powers: Article I, sec. 8)
Mcculloch v Maryland
– Supremacy clause (Article 6)
Mcculloch v Marylamd
– 10 th amendment
Mcculloch v Maryland - “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”
- Contrast to Amendments 1-9
– 11 th amendment - “The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State
Line between federal and state power is not clear. Why?
Constitution-
– Is Sometimes vague
– Sometimes seems contradictory (or at odds)
– Couldn’t anticipate all future issues and demands from government (ex- interstate commerce)
Dual v Cooperative Federalism
Dual: two levels of gov that are coequal, each supreme within their own sphere. Primary figures are the states. Points to 10th amen for support, and literal reading of constitution (what we are in now since 1986)
Cooperative: primary figures are the people. National govt. is supreme even if its actions touch the state functions. State and national govt are partners, but national govt sets policy. Points to Supremacy Clause and broad powers to congress/ expansive reading of constitution
McCulloch v Maryland (1819)
Facts - eventually, the first bank of the United States was established in 1791. The Republican-controlled Congress refused to renew the bank’s charter in1811. After the War of 1812 there was pressure to create a second bank and Congress did so in
1816. The second bank was mired in controversy, however, due to speculative investing as well as fraud and
embezzlement charges. In short, the bank was blamed for the nation’s economic problems. Congress held hearings on the bank while some states simultaneously attempted to regulate the banks within their torders. Maryland passed law- any non-state bank issuing notes must
use special paper that Maryland can tax When a state official came to collect taxes from a Baltimore branch of the Bank of the United States, James McCulloch, the bank’s cashier, refused to pay.
Legal Question: Does Congress have the power to charter a national
bank? and Did the state of Maryland exceed its power by trying to
tax a federal entity?
Answer/Vote/Judgement: Yes and Yes, 6-0 with Marshall for majority;
McCulloch wins.
Holding: Congress has the power to
incorporate a national bank and that a state may not tax it (it is unconstitutional for states to tax federal bank)
Majority Reasoning by Marshall:
While the Constitution was passed by conventions within states, it
was ratified by the people. Even the Tenth Amendment omits the word “expressly” when referring to the fact that powers “not delegated to the U.S., nor prohibited to the states, are reserved to the states or to the
people. This guts the meaning and teeth behind the 10th amendment. Maryland argues that states should still have the power to tax national banks and that the Constitution affords the state this
power along with the confidence that it will not abuse that power. However, the power to tax is the power to destroy. Congress can be trusted. The government of the United States was not designed to depend
on the states. The people of the state created…. The states have
no power to impede…..
Question: How does Marshall reason that states do not have a
reciprocal right to tax the federal government even though the
federal government can tax state banks?
Supremacy Clause - national govt overrides the states
Conclusion and Implications:
National government was supreme over states
* Marshall rules the 10 th amendment is not a significant
bar to Congress’s exercise of its implied powers
* Supremacy stance led to a series of debates between
federalists and Jacksonian Democrats.
– And Marshall eventually ended up writing a series of essays
and also some writings that were published in a newspapers
to defend his opinion in McCulloch
Scott v Sandford (1857)
Dred Scott was a slave, purchased by John Emerson in Missouri. In 1834 Emerson took Scott to the free state of Illinois, and in 1836 to the Upper Louisiana Territory, which was to remain free under the
Missouri Compromise of 1820. Scott and Emerson returned to Missouri, and Emerson died shortly thereafter. Irene Sanford Emerson then inherited Scott, but when she moved to Massachusetts she left Scott and his family behind. Scott believed he no longer had slave status and sued for his freedom in Missouri. Although he won at trial, he lost in the Missouri Supreme Court and his ownership was transferred to
Emerson’s brother-in-law, John Sanford. The case was then argued in federal court as a diversity suit, and the lower court ruled for Sandford. Meanwhile, Congress repealed the Missouri compromise in 1854, replacing it with legislation declaring
congressional neutrality on the issue of slavery. Case arrives at Supreme Court’s doorstep in 1856, and tensions
are high, with some justices wanting to simply avoid the case, but
others wanted to confront the issue presented in the case.
Legal Question: Is Dred Scott a citizen?
Answer: No. 7-2 with Taney writing for majority; judgment favored Sanford
Holding: Dred Scott did not satisfy the requirements for citizenship under the Constitution. The Act of Congress that prohibited a citizen from owning slaves in the northern part of the territory is void.
MR:
Dred Scott did not satisfy the requirement of citizens under the consitution. The act of cong. that prohibited a citizen from owning slaves in the north was repealed. People of US and citizen are synonymous. Framers believed his class were not included at time of consitution. We must not confuse the rights of citizenship that a state may confer
and the rights of citizenship as a member of a union. Those who were considered citizens of the states became citizens of
the country at the time of the ratification of the Constitution. Slaves were not to be considered as part of the people prior to adoption of the Constitution, and therefore did not become citizens of the United
States when the Constitution was ratified. Only congress can establish a uniform rule of citizenship. In this case, Scott was not a citizen of Missouri within the meaning of the Constitution of the United States and was therefore not able to sue in the
courts. In short, the suit should have been dismissed by the Circuit Court
because it had no jurisdiction to hear the case. The power to expand the territory of the United States by admission of new states is plainly given in the Constitution and the propriety of admitting a new state is committed to the discretion of
Congress. We find that Congress does not have the power to hold open a
territory without restriction. Indeed, the acquisition of a territory is
for the benefit of the several states that created it. The right of property in a slave is expressly confirmed in the
Constitution. The government also pledged to protect owners at all
times if slaves escaped. Additionally, no words in the Constitution
give Congress greater power over slave property. The only power it
has is that to guard and protect owners’ rights. Given these
considerations, the act of Congress (the Missouri Compromise) is
void
Conclusions and Implications
* Since Scott was not ruled a citizen for the federal government, he could not bring suit
* According to Taney, the Constitution protects property
rights, and according to Taney this included slaves
* “the status of slaves depends on the law of the state to which they voluntarily returned, regardless of where they had been.” Missouri court ruled Scott a slave,
Supreme Court followed state court’s ruling. (Walker and Epstein text)
* Decision played major role in leading to the civil war..
Curtis Dissent
– “it is only necessary to know whether any such persons were citizens of either of the States under the confederation, at the time of the adoption of the
Constitution.”
– “Of this there can be no doubt…”
– “Did the Constitution of the United States deprive them or their descendants of citizenship?”
– “And my opinion is, that, under the Constitution of the United States, every free person born on the soil of a State, who is a citizen of that State by force of its Constitution or laws, is also a citizen of the United States.
Commerce Clause
Article I, Section 8, Clause 3
* Congress shall have power “To regulate Commerce with foreign Nations, and among the several States, and with the
Indian Tribes.”
Questions w it:
-regulate: Complaints w England - had to use stamps with special paper: bureaucratic regulations colonist did not want to put up with. Arigan - industrilization
-commerce: 1789 vs 2025 very different
Buying and selling? Manufacturing and selling? Distribution?
Is it between states only (interstate) or within a single state (intrastate
Dual or cooperative adds complexity
Gibbons v Ogden (1824)
In 1789 Robert Livingston was given a monopoly to operate all steamboats on all waters in New York. He joined forces with Robert Fulton, and together they designed a steamship that made a monopoly economically viable. Livingston and Fulton also gained a monopoly on the New Orleans harbor in 1811. After Livingston and Fulton died, Aaron Ogden and Thomas Gibbons took over. Gibbons entered into a partnership to carry passengers
from New York to Elizabethtown, New Jersey. Ogden purchased the rights to operate in New York waters from the Livingston-Fulton monopoly, and Gibbons held a federal permit to operate steamships along the coast. With these grants of authority, the two could carry passengers between New York and New Jersey. This partnership dissolved when Ogden was pressured to terminate
his relationship with Gibbons. Gibbons then joined with Cornelius Vanderbilt and began to compete with the New York monopoly. Gibbons and Vanderbilt entered New York waters whenever they ould, in violation of the monopoly. Ogden convinced New York courts to enjoin Gibbons from entering New York waters. Gibbons appealed
Gibbons’s attorneys argued
– that federal permit took precedence over state- issued monopolies. They also argued that the Commerce Clause of the Constitution gave Congress exclusive power over commerce, and that state monopoly was a violation of that clause.
* Ogden’s lawyer responded
– that navigation was not commerce but an
intrastate enterprise left to the states.
Legal Question: Does the federal permit granted to Gibbons supersede the New York law that gives Ogden a
monopoly on steamships in New York waters?
Answer/vote/judgment: Yes. By a vote of 6–0 the Court ruled in favor of Gibbons. Chief Justice John Marshall wrote
majority opinion
Commerce is the intercourse of goods between nations and parts of
nations, and is regulated by prescribing rules for this intercourse.
– If commerce does not include navigation, the federal government has no
direct power over it. Yet power of navigation has been recognized since the
inception of the nation.
In short, the word navigation is implied in the word commerce, and was so implied
by the Framers of the Constitution.
– If commerce thus means navigation, and applies to foreign trade, then it
means the same thing between states, and “among” the states means
both the borders and interior of the states.
* The completely internal commerce of a state, then, may be considered as reserved
for the state itself.
– The enumeration of power over commerce means that the federal
government has power over such actions that apply to the states generally.
If Congress has this power, it should be exercised when needed.
– Full power means there is no room for the states to have power in this
area. To “regulate” means full power, and full power means the exclusion
of all others who would perform the same act. When state and federal
laws collide, the federal laws reign supreme. In this case, Congress sought
to allow generally the use of steamships. Thus the New York law must yield
to this decision of Congress
Holding:
– Navigation was commerce and that the
Gibbons/Vanderbilt steamship operation was
validly operating in interstate commerce under a
permit issued by the federal government
Conclusions and Implications
– Big victory for federal government: broadly
construed commerce and interstate commerce
Evolution of Commerce Clause
Gibbons v Ogden 1824: Marshall interp- Commerce begins in one state and ends in another. It does not stop when the act of crossing a state border is completed. Commerce occuring within a state may be part of a larger interstate process.
United States v E.C. Knight Co (1895): manufacturing excluded from commerce process. Manufacturing, processing, and mining activities are local by nature and not apart of interstate commerce. Their effect on intertsate commerce is indirect. That an article is intended for interstate commerce does not make its manufacture part of interstate commerce. “Commerce succeeds to manufacture and is not apart of it.”
Antitrust background
Large monopolies began to appear- dominating several industries.
These were called “trusts”
* Sherman Anti-Trust Act of 1890 passed by Congress
– Break-up monopolies, preserve competition
– What potential harmful effects are caused by monopolies?
– Key assumption: society flourishes the most when it is founded on
vigorous competition (competition brings out the best)
* Why is it called “antitrust”?
– these laws were established to check the abuses threatened or
imposed by the immense “trusts” that emerged in the late 19th
Century. These trusts controlled or threatened to control entire
nationwide markets for rail transport, steel, petroleum, banking, and
related lines of commerce.
– antitrust laws were established to ensure that these trusts did not
permanently undermine competition in markets
United States v. E.C. Knight Co. (1895)
– Six companies dominated the American sugar refining industry at the end of the nineteenth century. The American Sugar Refining Company owned 65 percent of the nation’s refineries. In March 1892 it agreed to buy four Pennsylvania refineries, including E. C. Knight Co., that made up
33 percent of the market. This would have given it 98 percent of refineries in the United States. The federal government sued to cancel the acquisition as a violation of the Sherman Anti-Trust Act.
Legal Question
– Does Congress have the power to regulate the manufacturing of goods (under its power to regulate interstate commerce)?
* Answer/Vote/Judgment:
– No. By a vote of 8–1 the Court ruled in favor of E.C. Knight
The evils of monopolies are well known, but this Court has long held that the
power to relieve citizens of monopolies lies with the states. While Congress has
the sole power to regulate interstate commerce, by not acting it implies that
the states should not interfere.
– While the federal government argues that refined sugar is a staple of life, and
should therefore be regulated, we cannot agree that the manufacture of sugar
is interstate commerce. Indeed, manufacturing preceeds commerce. The power over commerce is independent of the power over monopolies. But, when
monopolies hurt commerce, then they can be stopped.
– Just because something is manufactured for another state does not make it
immediately interstate commerce, and intent does not determine when
something becomes commerce. Thus, something becomes commerce when it
begins to move from one state to another.
– If the federal government controlled all aspects of manufacture, agriculture,
etc., then the states would have no power. In this case, the acquisition was
only of Pennsylvania refineries, and therefore within the confines of state
power.
– The intent to monopolize manufacturing does not equate with the intent to monopolize commerce.
Holding: Manufacturing cannot be regulated under the commerce
clause.
Harlan Dissent
– Citizens have rights to buy goods in any state without being confronted by an illegal combination whose business
extends throughout the whole country, which by law is an enemy to the public interests, and arbitrarily fixed prices.
– Whatever improperly obstructs the free course of interstate commerce may be reached by Congress, under
the Commerce Clause.
– The common government of all the people is the only one that can adequately deal with a matter that directly and
injuriously affects the entire commerce of the country, which concerns equally all the people of the union, and which, it must be confessed, cannot be adequately
controlled by any one state
Conclusions and Implications
– Court rejects the argument that: any intrastate commerce that affects interstate commerce may be regulated under the commerce clause
– There must be a direct effect
– What is a direct effect?
– This ruling was later used to bar many of the New
Deal programs passed to combat the Great
Depression
* Only after the Great Depression was a need recognized
for the federal government to “be empowered to
regulate economic evils”
Background/ Review on Commerce
US v. EC Knight Co. (1895)- Court rejects govt regulation of
intrastate commerce (no relation/effect on interstate
commerce)
* Period of time- several presidents elected that have a
laissez faire approach to the economy…works for a while…
* 1929 – Stock Market crashes, country enters Great
Depression- 25% unemployment
* 1932 – FDR elected; congress passes many laws – New Deal
* 1935-1936- Court strikes down many parts of this (see Box
7-4)
* FDR announces Court packing plan
* “Switch in Time that Saved Nine” 1937- West Coast Hotel v.
Parrish
Expansion of Commerce Clause
1937-1942: many decisions the Court slowly expands its interpretation (see Box 7-6)
Wickard v. Filburn (1942)- Filburn was a wheat farmer in Ohio and
grew for personal consumption an extra 239 bushels of wheat
allotted him by the Fed Govt.
– He was fined. He didn’t pay. He objected.
– Court ruled that even though it was on his own land and wasn’t being
sold, it still affected interstate commerce.
* Because the wheat he sold (and being able to sell more wheat than normal
because he had a private stash) influenced the market price of wheat more
broadly
– KEY- intrastate commerce is connected to interstate commerce
– Other cases- production that occurs in only one state is still part of
interstate commerce because it is connected to distribution, etc
Conclusions and Implications
– New era of commerce clause interpretation
* No more direct vs. indirect tests; no more “stream of commerce” considerations
* Almost anything could be interpreted as affecting interstate commerce and therefore subject to
regulation by Congress
– Line between inter- and intra- state commerce has essentially
been erased
– In other words- little is considered purely intrastate commerce
– Lasted for over 50 years, then
Background of Contract Clause
Framers’ conception of liberty was different than today’s concept because
it included economic considerations Framers were suspicious of states nullifying contracts and were concerned
with states because that’s where most regulation would come from`
40’s and 50’s court docket changes to civil before that economic
Why was that the main vehicle to do so? Because the 14th amendment was not around yet, that came after the civil war.
Art 1 sec 10 contract clause - what does that mean? Can states not ever try to regulate contracts? To impair a contract may means to nullify terms or agreements set out in the contract. Not clear what it means
Individual liberty v States interests (Community interests/ or for the Publix good)
early economic views (John Marshall)
Natural right: cannot be taken away it is god given - inherent right to have private property and state has to protect it
Economic growth seen as something that must be preserved almost at all costs during the early periods
Fletcher v Peck (1810)
In 1795 the Georgia legislature sold about 35 million acres of public lands,
known as the Yazoo Lands, at very low prices. The citizens of Georgia were
outraged by the sale and turned out most of the legislators in the next
election.
– In 1796 the new legislature rescinded the sales contract and moved to
repossess the land. However, much of the land had been sold to third parties.
– John Peck acquired 600,000 acres of the land purchased by James Gunn (an
original buyer) from the state.
– Peck then sold 15,000 acres to land speculator Robert Fletcher.
– Fletcher subsequently sued Peck in 1803 for return of the purchase price,
claiming that Peck had sold Fletcher a parcel of land for which he did not hold
the valid title.
GA State - Gunn - Peck - Peck sales to Fletcher some land -
Fletcher and Peck are in kahoots trying to see whether they will lose the land. Testing the constitutionality of the GA repeal act where the sale was recesended. Normally law doesn’t allow people to sue if they both want same outcomd
No true controversy because they both want the sale of the contract to be honored
– Justices in tough bind, why? EITHER YOU VIOLATE CONS AND CONTRACT CLAUSE OR YOU LET A CORRUPT AGREEMENT STAND. Justices may choose to rule against contract clause, but to do so they will have to call out corrupt behavior but that would be unpopular.
* Economic expansion was goal of many at the time: to enforce contract clause would
reward corrupt behavior by state governments, but to rule against the unpopular
fraudulent actions would set a precedent that limited the contract clause’s power.
* By the time the case reached the Court, 15 years had passed since the original sale, itwas impossible to determine who was the valid owner of each parcel of land
Legal Question
– May a state that has entered into a valid contract later rescind (or nullify) that contract?
* Answer/vote/judgment:
– No. By a vote of 5–0 the Court ruled that the state may not rescind the contract
Majority Opinion-
Third parties are important because they’re rights cannot be disregarded. Fletcher and Peck are third parties that did nothing wrong and not involved in the first contract so you cannot disregard those rights. If we rule against them they have no….
Georgia Legislature - if a leg passes a law that reverses a previous law then you cannot divest those rights from the first law. You can’t take away rights from 1st law.
Georgia passed a ex post facto law - law passed today that criminalizes behavior or rights exercised yesterday. Unconstitutional law
Both won - Peck and Fletcher both gets land because Peck did not sell all land to Fletcher and he gets a solidified title to land
Holding:
– States may not rescind contracts; the 1796
Georgia statute rescinding the land sale is
unconstitutional.
* Conclusions and Implications
– Established contract clause as important part of the Constitution
– Early instance of Court exercising judicial review
Trustees of Dartmouth College v. Woodward (1819)
In 1769 King George III issued a corporate charter establishing Dartmouth College. It designated a board of trustees and the ultimate governing body and its authority
extended to the college president.
– Eleazar Wheelock (the founder of the college) chose his son John to succeed him as president, but there was constant friction between John and the board. To shore up his position, John Wheelock enlisted the help of Jeffersonian Republicans who gained control of the
legislature in 1816.
– The Legislature passed a law that radically changed the governing of the college: 12 person board of trustees was
to be expanded to 21, appointed by governor.
* The legislature converted the college, renamed it Dartmouth
University and made it a public entity. This resulted in chaos, and the college was soon on the brink of fiscal chaos
Legal Question
– Is a corporate charter a contract protected against
state impairment?
– Or:
* Is a corporate contract protected by the Constitution?
* Is the contract impaired by the acts of the defendant?
* Answer/vote/judgment:
– Yes. By a vote of 5–1 the Court ruled in favor of Dartmouth
The first question: The judges of this court will protest contracts that the consitution has placed beyond legislative control. They are violating the contract clause and rights of contracts.
The second question: The govt did impair the original obligations of the contract: 12, powers rely in Pres. The private will of board of trustees and private donors is being subsidized by the legislatures.
Holding: Corporate charters are contracts under the meaning of Article I, section 10 and subject to protection from state
violation.
* Concurring opinion: Justice Story
– If the legislature means to claim such an authority (to take away power from a private corporation), it must be
reserved in the grant.
– The charter for Dartmouth contains no such reservation, and therefore I am bound to declare the acts of the
legislature in question do impair the obligations of the
charter.
– This is clearly a delicate issue and the task of deciding is difficult for us. However, judges are not to listen to persuasive eloquence or popular appeal. “We have
nothing to do, but to pronounce the law as we find it
Conclusions and Implications
* Not completely one-sided: Marshall
acknowledged that states may put in contracts
the rights to make changes in the future
Cases, Types, and Dates
Federalism:
McCulloch v. Maryland (1819)
Scott v Sandford (1857)
Commerce Power:
Gibbons v Ogden (1824)
US v E.C. Knight Co (1895)
Contract Clause:
Fletcher v Peck (1810)
Trustees of Dartmouth College v Woodward (1819)
Federalism cases/evolution/ increase or decrease
Commerce cases/ evolution/ increase or decrease
Contract causes/evoltuion increase or decrease
