Common Interpretation

The Commerce Clause


In the thirteen years between the Declaration of Independence in 1776 and the adoption of the Constitution in 1789, the United States was governed primarily by thirteen separate entities. Although the form of each government differed, most tended to elevate the legislature above the executive and judiciary, and made the legislature as responsive to majoritarian sentiments as possible.

State legislatures began enacting laws to relieve debtors (who were numerous) of their debts, which undermined the rights of creditors (who were few) and the credit market. States also erected an assortment of trade barriers to protect their own businesses from competing firms in neighboring states. And, because state legislatures controlled their own commerce, the federal Congress was unable to enter into credible trade agreements with foreign powers to open markets for American goods, in part, by threatening to restrict foreign access to the American market.

The result of all this was a nationwide economic downturn that, rightly or not, was blamed on ruinous policies enacted by democratically-elected legislatures. In 1787, political dissatisfaction with the economic situation led to a convention convened in Philadelphia to remedy this state of affairs. The new Constitution it proposed, addressed debtor relief laws with the Contracts Clause of Article I, Section 10, which barred states from "impairing the obligation of contracts."

To address the problems of interstate trade barriers and the ability to enter into trade agreements, it included the Commerce Clause, which grants Congress the power "to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." Moving the power to regulate interstate commerce to Congress would enable the creation of a free trade zone among the several states; removing the power to regulate international trade from the states would enable the president to negotiate, and Congress to approve, treaties to open foreign markets to American-made goods. The international commerce power also gave Congress the power to abolish the slave trade with other nations, which it did effective on January 1, 1808, the very earliest date allowed by the Constitution.

But, in the words of Chief Justice John Marshall, the "enumeration" of three distinct commerce powers in the Commerce Clause "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." Gibbons v. Ogden (1824) (Marshall, C.J.). So, for example, even when combined with the Necessary and Proper Clause giving Congress power to make all laws which shall be necessary and proper for carrying into execution its enumerated powers, the Commerce Clause did not give Congress power to touch slavery that was allowed by state governments within their borders.

The text of the Commerce Clause raises at least three questions of interpretation: What is the meaning of "commerce"? What is the meaning of "among the several states"? And what is the meaning of "to regulate"? Some have claimed that each of these terms of the Commerce Power had, at the time of the founding, an expansive meaning in common discourse, while others claim the meaning was more limited.

  • "Commerce" might be limited to the trade, exchange or transportation of people and things, which would exclude, for example, agriculture, manufacturing, and other methods of production; or it might expansively be interpreted to refer to any gainful activity or even to all social interaction.
  • "To regulate" might be limited to "make regular," which would subject a particular type of commerce to a rule and would exclude, for example, any prohibition on trade as an end in itself; or it might expansively be interpreted to mean "to govern," which would include prohibitions as well as pure regulations.
  • "[A]mong the several States" might be limited to commerce that takes place between the states (or between people of different states), as opposed to commerce that occurs between persons of the same state; or it might expansively be interpreted to refer to commerce "among the people of the several States," whether such commerce occurs between people in the same state or in different states.

In addition to other pervasive evidence of the public meaning of these terms, the slavery issue helps clarify the original public meaning of these terms at the time of their enactment. "Commerce" meant the activity of selling, trading, exchanging, and transporting goods and people, as distinct from producing the things being moved. "To regulate" meant to make regular, but at least with respect to the international trade, it also included the power to ban the trade in some items, as Congress banned the slave trade. Among the several states meant between one state and others, not within a state, where slavery existed as an economic activity.

From the founding until today, the meaning of "commerce" has not been much changed. Perhaps its only expansion by the Supreme Court came in 1944 when the Court held that commerce included "a business such as insurance," which for a hundred years had been held to be solely a subject of internal state regulation. United States v. South-Eastern Underwriters (1944). Instead, the modern growth of Congress's regulatory powers has been allowed by the courts adopting an expansive reading of the Necessary and Proper Clause to give Congress power over a broad range of intrastate economic activities with a "substantial effect" on interstate commerce, when such regulation is essential to the regulation of interstate commerce (narrowly defined).

As the New Deal Court said in United States v. Darby (1941), the "power of Congress over interstate commerce is not confined to the regulation of commerce among the states." The Court explained that "while manufacture is not of itself interstate commerce, the shipment of manufactured goods interstate is such commerce and the prohibition of such shipment by Congress is indubitably a regulation of the commerce." The power also "extends to those activities intrastate which so affect interstate commerce or the exercise of the power of Congress over it as to make regulation of them appropriate means to the attainment of a legitimate end, the exercise of the granted power of Congress to regulate interstate commerce." As authority for this principle, the Court relied on the Necessary and Proper Clause case of McCulloch v. Maryland (1819).

But in McCulloch, Chief Justice Marshall insisted that "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 . . . to say that such an act was not the law of the land." In Darby, however, Justice Stone wrote: "Whatever their motive and purpose, regulations of commerce which do not infringe some constitutional prohibition are within the plenary power conferred on Congress by the Commerce Clause." In this way, Stone ruled out Marshall's inquiry into whether Congress was relying on the commerce clause power as pretext for passing laws that aimed to accomplish goals beyond the power of the federal government. Thus, the Court expanded Congress power over interstate commerce in a way that gave it power over the national economy.

In the 1990s, the Rehnquist Court treated these New Deal cases as the high water mark of congressional power. In the cases of U.S. v. Lopez (1995) and U.S. v. Morrison (2000), the Court confined this regulatory authority to intrastate economic activity. In addition, in a concurring opinion in Gonzales v. Raich (2005), Justice Scalia maintained that, under Lopez, "Congress may regulate even noneconomic local activity if that regulation is a necessary part of a more general regulation of interstate commerce."

Most recently, in the health care case of NFIB v. Sebelius, in 2012, a majority of the justices found that a mandate to compel a person to engage in the economic activity of buying health insurance was beyond the powers of Congress under both the Commerce and Necessary and Proper Clauses. "The individual mandate cannot be upheld as an exercise of Congress' power under the Commerce Clause," Chief Justice Roberts wrote. "That Clause authorizes Congress to regulate interstate commerce, not to order individuals to engage in it." Moreover, "[e]ven if the individual mandate is 'necessary' to the Act's insurance reforms, such an expansion of federal power is not a 'proper' means for making those reforms effective." Instead, Chief Justice Roberts provided the fifth vote to uphold the Affordable Care Act by adopting a "saving construction" that the penalty enforcing the insurance requirement was noncoercive enough to be considered a tax rather than a Commerce Clause regulation.

The dispute over the breadth of the meaning of "commerce" turns, in large part, on the purposes one attributes to the clause, and to the Constitution as a whole, and what one thinks is the relevance of such purposes to the meaning of the text. At Philadelphia in 1787, the Convention resolved that Congress could "legislate in all cases . . . to which the States are separately incompetent, or in which the harmony of the United States may be interrupted by the exercise of individual legislation." 2 Records of Fed. Convention 21 (Max Farrand ed., 1911); see also 1 Records of Fed. Convention 21 (Resolution VI of the Virginia Plan). This was then translated by the Committee of Detail into the present enumeration of powers in Article I, Section 8, which was accepted as a functional equivalent by the Convention without much discussion. Proponents of an expansive reading claim that the power to regulate commerce should extend to any problem the states cannot separately solve. Those who support a narrower reading observe that the Constitution aims to constrain, as well as to empower, Congress, and the broadest reading of the Commerce power extends well beyond anything the framers imagined. As the dissenters in the health care case observed, "Article I contains no whatever-it-takes-to-solve-a-national-problem power."

Further Reading:

For contrasting views of evidence on the original public meaning of the terms in the Commerce Clause, compare Randy E. Barnett, The Original Meaning of the Commerce Clause, 68 U. Chi. L. Rev. 101 (2001), and Randy E. Barnett, New Evidence of the Original Meaning of the Commerce Clause, 55 U. Ark. L. Rev. 847 (2003), with Jack M. Balkin, Living Originalism 138-82 (2011); Randy E. Barnett, Jack Balkin's Interaction Theory of Commerce, 2012 U. Ill. L. Rev. 623.

Matters of Debate

Why Congress and the Courts Should Obey the Original Meaning of the Commerce Clause


As Professor Koppelman and my jointly-authored essay shows, abundant evidence—including what we know about slavery at the time of the Founding—tells us that the original meaning of the Commerce Clause gave Congress the power to make regular, and even to prohibit, the trade, transportation or movement of persons and goods from one state to a foreign nation, to another state, or to an Indian tribe. It did not originally include the power to regulate the economic activities, like manufacturing or agriculture, that produced the goods to be traded or transported. We should follow the original meaning of this provision for the same reason we limit California to the same number of Senators as Delaware, notwithstanding the vast disparity between their populations, or limit the president to a person who is at least thirty-five years old, though some who are younger than thirty-five might make excellent presidents.

A written constitution is the law that governs those who govern us. And those who govern us— whether the Congress, the president, or the courts—can no more properly change the law that governs them without going through the amendment process of Article V, than can the people can change the speed limits imposed on them without going through the legislative process. Moreover, under Article VI, “The Senators and Representatives . . . and the members of the several state legislatures, and all executive and judicial officers, both of the United States and of the several states, shall be bound by oath or affirmation, to support this Constitution,” referring to the written Constitution. But such an oath would be meaningless if it was merely promising to obey whatever meaning a government official later wants the Constitution to mean. That would be like taking an oath to “this Constitution” while crossing one’s fingers behind one’s back.

I agree with Professor Koppelman that the Founders attempted to distinguish the problems that were best handled at the national level from those best handled by the states. But they did so by drafting a specific list of such powers, rather than leave it to the national authority to decide the scope of its own power. Where later developments justify adding to these national powers, such expansion is properly handled by an Article V constitutional amendment, as the Constitution was once amended to give Congress the power to prohibit the intrastate economic activity of producing and selling alcohol. See the Eighteenth Amendment.

Enforcing the original meaning of the Commerce Clause does not mean that other economic activities are free from any government regulation. It merely means that the power to regulate all intrastate economic activities resides with each of the fifty states. Where national uniformity and coordination between states are desirable, these goals can be achieved by the Interstate Compacts Clause of Article I, Section 8, by which states may enter into agreements or compacts with another state or states, provided they have the consent of Congress. Many such compacts exist.

Another Perspective

This essay is part of a discussion about the Commerce Clause with Andrew Koppelman, John Paul Stevens Professor of Law and Professor of Political Science, Northwestern University. Read the full discussion here.

I identify some of the key advantages of decentralizing most law-making at the state level in my statement on Federalism. Here is a summary of my analysis there:

  • Federalism Makes Regulatory Diversity Possible.  Given widespread disagreement about both economic and social policies, lodging this regulatory power in the states enables a diversity of approaches to develop. When it comes to economic regulation, so long as they remain within the proper scope of their power to protect the rights, health and safety of the public, fifty states can experiment with different regimes of legal regulation so the results can be witnessed and judged rather than endlessly speculated about. States will be somewhat inhibited in imposing restrictions on businesses by the threat of regulatory competition. Other states will be induced to offer more receptive “business climates” to entice businesses to relocate. Businesses small and large can decide to relocate if they deem a particular scheme of regulation to be too onerous.
  • Foot Voting Empowers the Sovereign Individual Citizen. When it comes to liberty, the competition provided by federalism empowers the sovereign individual. Each person can individually control the state in which they live by selecting from among fifty choices, not just two. And they can witness the economic opportunities that result from different state polices. In a federal system, people are then free to move to another state for a better job, or for a cleaner and safer environment. Because their decisions will have tangible effects on their lives, it is far more rational for individuals to investigate the difference between states than it is the difference between political candidates.
  • The cost of exiting one state for another is far lower than exiting the United States when one disagrees with a national policy. Consequently under a federal system the citizen’s enhanced power of exit not only provides a comparatively greater constraint on legislative power that is reserved to the states, it empowers individuals to achieve their own purposes far more effectively than relying on their ability to influence national policy by their vote, or by leaving the country of their birth. 
  • The freedom of sovereign individuals to move to the states with a better package of results prevents a legislative “race to the bottom” in a federal system. This dynamic is much less powerful at the national level, because individuals are much more reluctant to leave their country than their state. 
  • Federalism Avoids a Political War of All Against All. When any issue is moved to the national level, it creates a set of winners and a set of losers. Because the losers will have to either live under the winners’ regime or leave the country, everyone will fight much harder to achieve their result or, failing that, to block the other side from achieving its goal.

In all these ways, liberty is more robustly protected by confining lawmaking to the state and local levels in a federal system, than moving all such decisions to the national level. And the United States has been a far more prosperous and contented country because of its federal system, though our system of federalism could stand to be bolstered. But all these benefits (and more) are only available by enforcing the limits on Congressional power provided by the original meaning of the Commerce Clause.

Matters of Debate

A Commerce Power Adequate to its Purposes


The Commerce Clause should be read in light of the Constitution’s purpose: to empower Congress to address problems among the several states that the states are separately unable to deal with effectively. This is precisely what it was unable to do under the Articles of Confederation. Commerce “among the several States” is, as Chief Justice Marshall put it, “commerce which concerns more States than one”—that has interstate spillover effects, or that generates collective action problems that no state can solve alone. Gibbons v. Ogden (1824) (Marshall, C.J.). 

Combined with the Necessary and Proper Clause, the power is broad. It is not, however, infinite. The best way to read the “pretext” language from McCulloch v. Maryland (1819) is to hold that Congress cannot use its commerce power when there is no colorable interstate problem to solve. That line is sometimes crossed. In United States v. Lopez (1995), the Court invalidated a statute criminalizing possession of handguns near schools—an issue that there was no reason to think that the states couldn’t handle. The law scored cheap political points by appearing to address a pressing and difficult problem without contributing anything substantial to its solution. 

Yet when the Court has attempted to craft limits on the commerce power, the results have not been pretty. The Court began with a constricted understanding of commerce as including only trade and navigation, and then— after some decades of preventing Congress from outlawing child labor—accommodated the modern state by stretching the meaning of this understanding and proliferating legal fictions, producing bizarrely formalistic law. An understanding of commerce limited to trade constrains the federal government with no regard for the reasons why federal regulation might be necessary, and thus pointlessly casts doubt on laws governing civil rights, workplace safety, sanitary food, drug safety, and employee rights. More recently, the Court has declared that Congress has plenary authority over economic, but not noneconomic activity. United States v. Morrison (2000). If that were right, Congress would be deprived of authority over such nontrivial matters as the spoliation of the environment or the spread of contagious diseases across state lines. In Gonzales v. Raich (2005) upholding a ban on private cultivation of marijuana, the Court held that even noneconomic activity could be regulated if the statute as a whole clearly did regulate interstate commerce (here, the drug trade) and regulating the noneconomic activity “was an essential part of the larger regulatory scheme.” That suggests, bizarrely, that Congress’s power gets greater as its regulatory scheme becomes larger and more complex.

Another Perspective

This essay is part of a discussion about the Commerce Clause with Randy E. Barnett, Carmack Waterhouse Professor of Legal Theory and Director of Georgetown Center for the Constitution, Georgetown University Law Center.  Read the full discussion here.

In NFIB v. Sebelius (2012), the Court held that the Necessary and Proper Clause did not permit Congress to compel activity, such as the purchase of health insurance. Chief Justice Roberts, writing only for himself, quoted a declaration in McCulloch that, although that case gave Congress a broad choice of means for carrying out its powers, the Necessary and Proper Clause did not authorize the use of any “‘great substantive and independent power’ of the sort at issue here.” This limitation had never been used to invalidate any law since McCulloch, and Roberts did not explain how one could intelligibly apply it in future cases. The joint dissent of Justices Scalia, Kennedy, Thomas, and Alito is even more obscure on the Necessary and Proper point. They purport to distinguish Gonzales v. Raich on the ground that the prohibition of marijuana cultivation was “the only practicable way” to stop interstate trafficking, while “there are many ways other than” the mandate to buy insurance to effect Congress’s goals. The Scalia group seems to think that McCulloch adopted the rule it specifically rejected: the trouble with the mandate is that it was not absolutely necessary.

The larger principle upon which Roberts relied was that Congress may not regulate inactivity and, specifically, may not “compel individuals not engaged in commerce to purchase an unwanted product.” This isn’t much of a limit. No one can live in the world without engaging in self-initiated actions all the time. If that’s all it takes to trigger regulation, then government can push its citizens around in nearly any way it likes. On the other hand, the principle, had it been used to invalidate the statute, might have rendered the United States permanently incapable of repairing its massively dysfunctional health care system. 

It is not clear that any judicial limit on the commerce power is necessary. The Court essentially abandoned such limits from 1937 until 1995, when it decided Lopez. Federalism somehow survived. The Court has repeatedly insisted that Congress could not displace state tort law, contract law, criminal law, or family law, but these pronouncements were dictum (judicial language unnecessary to the decision of a case) because Congress never tried to take over these areas. Congress did not even draft a federal code of corporations or commercial law, which it undoubtedly still has the power to do.

If courts were going to impose limits, they could reasonably demand (1) a plausible description of a collective action problem and (2) the failure of states to solve it. This would hardly be a toothless test. Neither (1) nor (2) was available in Lopez.

A text’s ambiguities should be resolved in light of its purpose. However one interprets the commerce power, one ought not to read it in such a way that commerce is uncontrollable by either the state or the federal governments, making the American people as helpless as they were under the Articles of Confederation. 

Further Reading:

Andrew Koppelman, ‘Necessary,’ ‘Proper,’ and Health Care Reform, in Nathaniel Persily, Gillian E. Metzger, & Trevor W. Morrison, eds., The Health Care Case: The Supreme Court’s Decision and Its Implications (2013).

Andrew Koppelman, The Tough Luck Constitution and the Assault on Health Care Reform (2013).

For more information on interpretation of the commerce power, see Robert D. Cooter & Neil S. Siegel, Collective Action Federalism: A General Theory of Article I, Section 8, 63 Stan. L. Rev. 115 (2010); Robert L. Stern, The Commerce That Concerns More States Than One, 47 Harv. L. Rev. 1335 (1934).

Matters of Debate

More about Article I

The Drafting Table

Explore key historical documents that inspired the Framers of the Constitution and each amendment during the drafting process, the early drafts and major proposals behind each provision, and discover how the drafters deliberated, agreed and disagreed, on the path to compromise and the final text.

In the Classroom

Teach the Constitution in your classroom with nonpartisan resources including videos, lesson plans, podcasts, and more. Check out our classroom resources organized by each article or amendment, and by key constitutional questions.

Media Library: Article I

Town Hall Video

The Constitution Drafting Project: Libertarian and Progressive Constitutions

Two teams of leading constitutional scholars—team libertarian and team progressive—present their ideal constitutions.

Oct 1

Blog Post

A New U.S. Supreme Court?

The late Justice Byron White famously said that with each new justice, there is a new Supreme Court. Americans soon will be able…

Sep 25

More from the National Constitution Center

Carry the Constitution in Your Pocket! Download the App

The Interactive Constitution is available as a free app on your mobile device.

Visit the National Constitution Center

Find out about upcoming programs, exhibits, and educational initiatives on the National Constitution Center’s website.

Support the Interactive Constitution

The National Constitution is a private nonprofit. Please support our educational mission of increasing awareness and understanding of the U.S. Constitution.