Commerce

Commerce Definition

The etymology of the word “commerce” 1 carries the primary meaning of traffic, of transporting goods across state lines for sale. This possibly narrow constitutional conception was rejected by Chief Justice Marshall in Gibbons v. Ogden,2 which remains one of the seminal cases dealing with the Constitution. The case arose because of a monopoly granted by the New York legislature on the operation of steam-propelled vessels on its waters, a monopoly challenged by Gibbons, who transported passengers from New Jersey to New York pursuant to privileges granted by an act of Congress.3 The New York monopoly was not in conflict with the congressional regulation of commerce, argued the monopolists, because the vessels carried only passengers between the two states and were thus not engaged in traffic, in “commerce” in the constitutional sense.

More about Commerce

“The subject to be regulated is commerce,” the Chief Justice wrote. “The counsel for the appellee would limit it to traffic, to buying and selling, or the interchange of commodities, and do not admit that it comprehends navigation. This would restrict a general term, applicable to many objects, to one of its significations. Commerce, undoubtedly, is traffic, but it is something more&emdash;it is intercourse.” 4 The term, therefore, included navigation, a conclusion that Marshall also supported by appeal to general understanding, to the prohibition in Article I, § 9, against any preference being given “by any regulation of commerce or revenue, to the ports of one State over those of another,” and to the admitted and demonstrated power of Congress to impose embargoes.5

Commerce: Developments

Marshall qualified the word “intercourse” with the word “commercial,” thus retaining the element of monetary transactions.6 But, today, “commerce” in the constitutional sense, and hence “interstate commerce,” covers every species of movement of persons and things, whether for profit or not, across state lines,7 every species of communication, every species of transmission of intelligence, whether for commercial purposes or otherwise,8 every species of commercial negotiation that will involve sooner or later an act of transportation of persons or things, or the flow of services or power, across state lines.9

Other Aspects

There was a long period in the Court's history when a majority of the Justices, seeking to curb the regulatory powers of the Federal Government by various means, held that certain things were not encompassed by the Commerce Clause because they were neither interstate commerce nor bore a sufficient nexus to interstate commerce. Thus, at one time, the Court held that mining or manufacturing, even when the product would move in interstate commerce, was not reachable under the Commerce Clause; 10 it held insurance transactions carried on across state lines not to be commerce,11 and that exhibitions of baseball between professional teams that travel from state to state were not in commerce.12 Similarly, it held that the Commerce Clause was not applicable to the making of contracts for the insertion of advertisements in periodicals in another state 13 or to the making of contracts for personal services to be rendered in another state.14

Other Issues

Later decisions either have overturned or have undermined all of these holdings. The gathering of news by a press association and its transmission to client newspapers are interstate commerce.15 The activities of Group Health Association, Inc., which serves only its own members, are “trade” and capable of becoming interstate commerce; 16 the business of insurance when transacted between an insurer and an insured in different states is interstate commerce. 17 But most important of all there was the development of, or more accurately the return to,18 the rationales by which manufacturing, 19 mining,20 business transactions,21 and the like, which are antecedent to or subsequent to a move across state lines, are conceived to be part of an integrated commercial whole and therefore subject to the reach of the commerce power.

Resources

References

This text about Commerce is based on “The Constitution of the United States of America: Analysis and Interpretation”, published by the U.S. Government Printing Office.

[Footnote 1] OED: “com- together, with, + merx, merci- merchandise, ware.”

[Footnote 2] 22 U.S. (9 Wheat.) 1 (1824).

[Footnote 3] Act of February 18, 1793, 1 Stat. 305, entitled “An Act for enrolling and licensing ships or vessels to be employed in the coasting trade and fisheries, and for regulating the same.”

[Footnote 4] Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 189 (1824).

[Footnote 5] 22 U.S. at 190-94.

[Footnote 6] 22 U.S. at 193.

[Footnote 7] As we will see, however, in many later formulations the crossing of state lines is no longer the sine qua non; wholly intrastate transactions with substantial effects on interstate commerce may suffice.

[Footnote 8] E.g., United States v. Simpson, 252 U.S. 465 (1920); Caminetti v. United States, 242 U.S. 470 (1917).

[Footnote 9] “Not only, then, may transactions be commerce though non-commercial; they may be commerce though illegal and sporadic, and though they do not utilize common carriers or concern the flow of anything more tangible than electrons and information.” United States v. South-Eastern Underwriters Ass'n, 322 U.S. 533, 549-50 (1944).

[Footnote 10] Kidd v. Pearson, 128 U.S. 1 (1888); Oliver Iron Co. v. Lord, 262 U.S. 172 (1923); United States v. E. C. Knight Co., 156 U.S. 1 (1895); see also Carter v. Carter Coal Co., 298 U.S. 238 (1936).

[Footnote 11] Paul v. Virginia, 75 U.S. (8 Wall.) 168 (1869); see also the cases to this effect cited in United States v. South-Eastern Underwriters Ass'n, 322 U.S. 533, 543-545, 567-568, 578 (1944).

[Footnote 12] Federal Baseball League v. National League of Professional Baseball Clubs, 259 U.S. 200 (1922). When called on to reconsider its decision, the Court declined, noting that Congress had not seen fit to bring the business under the antitrust laws by legislation having prospective effect and that the business had developed under the understanding that it was not subject to these laws, a reversal of which would have retroactive effect. Toolson v. New York Yankees, 346 U.S. 356 (1953). In Flood v. Kuhn, 407 U.S. 258 (1972), the Court recognized these decisions as aberrations, but it thought the doctrine entitled to the benefits of stare decisis, as Congress was free to change it at any time. The same considerations not being present, the Court has held that businesses conducted on a multistate basis, but built around local exhibitions, are in commerce and subject to, inter alia, the antitrust laws, in the instance of professional football, Radovich v. National Football League, 352 U.S. 445 (1957), professional boxing, United States v. International Boxing Club, 348 U.S. 236 (1955), and legitimate theatrical productions. United States v. Shubert, 348 U.S. 222 (1955).

[Footnote 13] Blumenstock Bros. v. Curtis Pub. Co., 252 U.S. 436 (1920).

[Footnote 14] Williams v. Fears, 179 U.S. 270 (1900). See also Diamond Glue Co. v. United States Glue Co., 187 U.S. 611 (1903); Browning v. City of Waycross, 233 U.S. 16 (1914); General Railway Signal Co. v. Virginia, 246 U.S. 500 (1918). But see York Manufacturing Co. v. Colley, 247 U.S. 21 (1918).

[Footnote 15] Associated Press v. United States, 326 U.S. 1 (1945).

[Footnote 16] American Medical Ass'n v. United States, 317 U.S. 519 (1943). Cf. United States v. Oregon Medical Society, 343 U.S. 326 (1952).

[Footnote 17] United States v. South-Eastern Underwriters Ass'n, 322 U.S. 533 (1944).

[Footnote 18] “It has been truly said, that commerce, as the word is used in the constitution, is a unit, every part of which is indicated by the term.” Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 194 (1824). See also id. at 195-196.

[Footnote 19] NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937).

[Footnote 20] Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381 (1940). See also Hodel v. Virginia Surface Mining & Recl. Ass'n, 452 U.S. 264, 275-283 (1981); Mulford v. Smith, 307 U.S. 38 (1939) (agricultural production).

[Footnote 21] Swift & Co. v. United States, 196 U.S. 375 (1905); Stafford v. Wallace, 258 U.S. 495 (1922); Chicago Board of Trade v. Olsen, 262 U.S. 1 (1923).

Tables of Contents

• Commerce and other Topics in the Contents – Article 1 of the U.S. Constitution
• U.S. Constitutional Law Category
• List of amendments to the U.S. Constitution
• Commerce and other Topics in the Constitution Contents
• Interpretation of the U.S. Constitution (Table of Contents)
• Clauses of the Constitution (Table of Contents)