Three Categories of Power

Three Categories of Power

The effects and aggregation doctrine just described explains how Congress reaches local activity, but it covers only one of the routes by which a federal statute can rest on the commerce power. In United States v. Lopez the Court sorted the modern cases into three broad categories of activity that Congress may regulate. They are the use of the channels of interstate commerce; the instrumentalities of interstate commerce, together with persons or things in interstate commerce, even though the threat may come only from intrastate activities; and activities having a substantial relation to interstate commerce, meaning those that substantially affect it.¹ Some formulations list goods moving in interstate commerce as a separate fourth category, but Lopez places persons and things in interstate commerce inside the second, and this chapter follows that arrangement. A commerce problem therefore begins with the question of which category the statute invokes, because the answer determines how much reasoning the government must supply to defend it.

The categories sort subjects by how closely each is tied to commerce itself, and that ordering explains why the first two draw so little dispute. Channels such as highways, waterways, rails, air routes, and communication lines are the pathways of the national market, and instrumentalities such as trucks, trains, planes, and vessels are its working parts. Justice Scalia observed that these two categories are self-evident because they are the ingredients of interstate commerce itself, a point that traces back to Marshall's account of commerce as intercourse in Gibbons.² A statute aimed at them regulates commerce directly, so a court need not reason from economic effects to see that the commerce power applies, and the risk of sweeping in purely local matters stays low. The Lopez Court accordingly disposed of both categories in a single paragraph, finding that the Gun-Free School Zones Act neither regulated the use of a channel nor protected an instrumentality or a thing in commerce, so that the statute could survive, if at all, only under the third category.³

The third category differs in kind. An activity that substantially affects interstate commerce is not itself part of interstate commerce, so the inquiry shifts to how strong the link is between a local subject and the national market.⁴ A link measured by effects can be stretched from one step to the next until it covers nearly anything, and the Court has warned that the commerce power may not be extended to effects so indirect and remote that reaching them would erase the line between what is national and what is local and produce a completely centralized government.⁵ For that reason this category needs limits of its own, and it is where nearly all the commerce litigation takes place, including the later cases on guns near schools, violence against women, and homegrown marijuana. The next subsection takes the categories in order, beginning with the channels of commerce.

Channels of Commerce

The first of the three categories is the easiest to state and the first to check on a problem: Congress may regulate the use of the channels of interstate commerce.⁶ The channels are the routes through which persons and goods move from State to State, meaning highways, waterways, rail lines, air routes, and lines of communication, and courts describe the category as the use of those interstate transportation routes.⁷ The power covers more than keeping a route open, because the authority of Congress to keep the channels free from immoral and injurious uses has been frequently sustained and is no longer open to question.⁸ Together those two ideas give Congress a say over what may travel on a route and who may use it, so a condition attached to entry into the channel falls within the power as readily as a rule about the route itself.

The breadth of that power follows from what the Commerce Clause was built to do. The clause aims at a common market in which every buyer and seller in every State trades on equal terms, and a market of that kind is only as unified as the routes connecting its parts.⁹ A route can be damaged in two ways: a State can burden movement along it, and the route can be used to carry something that harms the States at the other end. If each State alone controlled the second problem, a State indifferent to the harm would become the weak point of the whole system, because whatever it tolerated would flow outward into every State the route reaches. Congress answers to the whole nation, so it can set one condition for use of the route and enforce it where goods or travelers enter. That arrangement also lets Congress act without regulating the factory or the local business directly, since the condition attaches to the shipment or the journey.

The clearest application to goods is United States v. Darby, where Congress had prohibited shipment in interstate commerce of goods made by workers paid less than a federal minimum wage or employed more than a federal maximum number of hours, and the prohibition stood as a valid use of the commerce power.¹⁰ The evils the Act targeted were the spread of substandard labor conditions through the use of interstate commerce for competition by goods so produced, and the consequent dislocation of commerce caused by impairment of local businesses.¹¹ Having adopted a policy of excluding such goods from interstate commerce, Congress could choose means reasonably adapted to that end even though those means involved control of intrastate activities.¹² What triggers the prohibition is a shipment across state lines, yet the conduct that decides whether a given shipment is forbidden, the wages and hours inside the plant, is local. The Court also sustained the separate provision reaching production itself, independently of the shipment ban, on the ground that the means adopted were so related to interstate commerce and so affected it as to be within the commerce power.¹³ One statute can therefore rest on more than one category, and each provision needs its own support.

The second classic use concerns travelers rather than goods. The Civil Rights Act of 1964 prohibited private racial discrimination in places of public accommodation whose operations affect commerce, and in Heart of Atlanta Motel, Inc. v. United States the Court upheld it as applied to a motel of just over 200 rooms near an interstate highway that advertised nationally and drew about 75 percent of its guests from out of State.¹⁴ Discrimination in lodging of that kind diminishes interstate travel for persons of color, in the number of people who make the trip and in its quality, so the regulation operates on use of the route.¹⁵ A traveler can use a highway across several States only if lodging is available along it, which means that a refusal of a room on racial grounds at one point burdens the movement the route exists to carry. The motel is a single building in a single State, and Congress could still reach it, because what the statute regulated was the condition on which travelers may use the channel. The long-settled authority to keep channels free from immoral and injurious uses shows that the category is limited neither to physical obstruction nor to economic harm.¹⁶

A criminal statute shows the same logic applied to persons who cross state lines. A footnote in United States v. Morrison describes a federal law that punishes anyone who travels across a state line intending to injure, harass, or intimidate a spouse or intimate partner and who, in the course of or as a result of the travel, intentionally commits a crime of violence causing bodily injury, and it notes that the courts of appeals have uniformly upheld the law as a regulation of the use of channels.¹⁷ The assault itself may occur wholly inside one State, and the statute reaches it because the offender used an interstate route to get there. By contrast, Morrison struck down the civil remedy in the Violence Against Women Act, which reached gender-motivated violence wherever it occurred, and the petitioners did not even contend that it fell within either of the first two categories.¹⁸ Lopez treated the Gun-Free School Zones Act the same way: possessing a gun in a school zone is neither a regulation of the use of the channels nor an attempt to prohibit the interstate transportation of a commodity through them, so the statute could survive, if at all, only under the third category.¹⁹ Violence and guns are the subjects of all three statutes. The difference lies in whether the text picks out a use of the route: the travel statute does, and the other two attach to conduct wherever it happens.

On an exam, the usual error is to demand that the regulated conduct itself cross a state line. The channels category asks whether the statute operates on the use of an interstate route, so a local assault by a traveler, a local plant whose goods are shipped out, and a local motel serving travelers all pass that first filter. The opposite error is to call a statute a channels regulation because its subject, such as a gun or a person, can move between States. The statute itself must pick out the use of the route, as the shipment ban and the travel crime do and the school-zone statute does not. Categories can also overlap: Lopez cites Heart of Atlanta for the channels category, yet the same decision appears in its list of economic activity that substantially affects commerce, because the motel catered to interstate guests.²⁰ An answer can therefore argue the channels route first and the effects route in the alternative. When the channels category applies, the economic-character, jurisdictional-element, findings, and attenuation considerations that guide the third category do not come into play.²¹ The next subsection takes up the second category, which covers the vehicles that travel the channels and the persons and things moving in commerce.

Instrumentalities and Things in Commerce

The second category in United States v. Lopez covers the equipment and cargo that use the routes the first category addresses. Under it, Congress may regulate and protect the instrumentalities of interstate commerce, or persons or things in interstate commerce, even though the threat may come only from intrastate activities.²³ Instrumentalities are the working equipment of the national market, such as trucks, trains, planes, and vessels, and the category follows those vehicles and the goods they carry wherever they go. A thing in commerce is a good that will be, is being, or has been shipped across state lines.²⁴ The category also names persons in interstate commerce, meaning people who are themselves moving in it, and the same reasoning applies to them. The closing clause of the rule carries the doctrine, because it allows the regulated threat to be a local act, such as a theft or a discriminatory rate, so long as what that act endangers is already part of interstate commerce.

Two features of the category explain why the government's task is light when it applies. The first is that the endangered object is already inside commerce. Freight cars, aircraft, and sealed shipments are ingredients of interstate commerce itself, which is why the first two categories are regarded as self-evident, and regulating them regulates commerce directly instead of reaching toward some outside activity through its effects.²⁵ The second feature is the source of the harm. A local actor who sabotages a vehicle or takes cargo pays none of the cost, which falls on carriers, shippers, and travelers in other States, and if federal power stopped wherever the threat began inside a State, the safety of an interstate train would depend on whatever rules the State it was crossing chose to adopt. A State indifferent to the problem would become the weak point in a market the Commerce Clause was meant to unify. For that reason the Court asks its economic-character, jurisdictional-element, findings, and attenuation questions only after concluding that the first two categories do not fit, and it proceeded in that order in both Lopez and Morrison.²⁶

The authorities Lopez itself cites show the category operating in three ways. In the Shreveport Rate Cases the threat was an intrastate rail rate that discriminated against interstate rail traffic, and federal authority could revise the rate because of its effect on the interstate service.²⁷ In Southern R. Co. v. United States the Court upheld amendments to the Safety Appliance Act as applied to vehicles used in intrastate commerce.²⁸ The two decisions differ in what the federal rule touches. Shreveport regulates a local practice, the rate, because of what it does to interstate carriage, while the Safety Appliance Act regulates the vehicle itself, so its equipment requirements follow the car even when the car is used in intrastate commerce. The third form appears in federal criminal law, where Lopez cites the destruction of an aircraft and thefts from interstate shipments as protection of instrumentalities and things in commerce.²⁹ In each form the wrongful act happens locally and the federal interest attaches to the vehicle or cargo it endangers. Local loan sharking, which Lopez lists among the intrastate economic activities that substantially affect commerce, is better analyzed under the third category.³⁰

The meaning of things in commerce is easiest to see through Lopez itself. Alfonso Lopez was a twelfth-grader who carried a concealed .38-caliber handgun into a San Antonio high school, and the Gun-Free School Zones Act made possession of a firearm in a school zone a federal crime without requiring any connection between the gun and interstate commerce.³¹ The Court held that the statute could not be defended as protecting an instrumentality of commerce or a thing in commerce, so it could survive only under the third category.³² The fact that would have mattered for the second category was missing, because nothing showed that Lopez or the gun had recently moved in interstate commerce. The converse follows directly. A version of the statute limited to a gun that had moved in interstate commerce would have been constitutional, because the object it reached would then be a thing that had been shipped across state lines.³³ Congress would have written the connection to commerce into the offense itself, a drafting device that later sections treat as a jurisdictional element confining a statute to a discrete set of cases.³⁴

The category has an edge, and Morrison marks it. The civil remedy there addressed gender-motivated violence wherever it occurs, rather than violence directed at the instrumentalities of interstate commerce, interstate markets, or things or persons in interstate commerce, and the petitioners did not claim that it fit either of the first two categories.³⁵ Congress may reach violence under this category when the target is a vehicle, a cargo, or a person in commerce, and the statute on destroying aircraft shows it doing so, but a statute that attaches to violence anywhere supplies no such object. Some formulations of the doctrine describe highways as instrumentalities and list goods that have been shipped as a separate category. Lopez groups instrumentalities, persons, and things together, and because the first two categories rest on the same reasoning, the label matters less than showing that the statute operates on something already in commerce.³⁶

On an exam, the usual error is to treat the local origin of the threat as the end of the second-category argument, when the rule expressly allows a threat that comes only from intrastate activities.³⁷ The opposite error is to call a statute a second-category regulation because the thing it concerns, such as a gun, could someday cross a state line. The question is whether the statute operates on a vehicle, person, or thing that is in or has been in interstate commerce. When it does, no aggregate-effects showing is required. When it does not, the analysis moves to the substantial-effects category, which the next subsection takes up.

Substantial Effects on Commerce

The third category covers activities having a substantial relation to interstate commerce, which the Court equates with activities that substantially affect interstate commerce.³⁹ It differs in kind from the first two. Channels, instrumentalities, and things in commerce are ingredients of interstate commerce itself, so a statute aimed at them regulates commerce directly.⁴⁰ An activity that substantially affects interstate commerce is not itself part of it, so the only federal connection the activity offers is what it does to the interstate market.⁴¹ That is why the size of the effect carries this category: with no route to point to and no vehicle or cargo to protect, the government's whole case is that a local activity moves national commerce enough to justify national regulation. A concurring opinion in Gonzales v. Raich goes further and traces the power over such activities to the Necessary and Proper Clause rather than to the Commerce Clause alone, a view that returns in the section on Raich.⁴²

The wording of the required effect was not always settled. Some decisions described it as substantial, while others said only that an activity affects interstate commerce, and in Lopez the Court acknowledged that its case law had not been clear on whether an activity must merely affect or must substantially affect commerce to come within Congress's power.⁴³ The Court resolved the question, consistent with the great weight of its earlier cases, by holding that the proper test asks whether the regulated activity substantially affects interstate commerce.⁴⁴ Justice Breyer, dissenting in Lopez, preferred the word significant because substantial implies a somewhat narrower power than recent precedent suggests. He said the choice of word would make no difference to the result in that case, and he added that no verbal formulation captures the size of an effect with precision.⁴⁵ Even the Justice who preferred a different word required a significant effect, so every opinion treats the size of the effect as part of the test.

The reason for a limiting word lies in what the third category reaches. Almost any local activity touches the economy somewhere, so if a slight effect were enough, Congress could justify regulating nearly everything by tracing a thin line from the activity to some market. The Court has long said that it has never held that Congress may use a relatively trivial impact on commerce as an excuse for broad general regulation of state or private activities.⁴⁶ It has also warned that effects so indirect and remote would erase the distinction between what is national and what is local and produce a completely centralized government.⁴⁷ For that reason Lopez refused a reading that would turn the commerce power into a general police power of the kind the States retain.⁴⁸ The word substantial is what preserves that distinction. A slight or speculative connection will not do, and the effect is judged cumulatively, by asking about the whole class of similar activity rather than one instance, as the earlier discussion of aggregation explains.⁴⁹

The decisions that have sustained the category show what a real and sizable effect looks like. Lopez itself catalogued them: intrastate coal mining, local extortionate credit transactions, restaurants that use substantial interstate supplies, inns and hotels that cater to interstate guests, and the production and consumption of homegrown wheat.⁵⁰ From that list the Court drew a pattern: "Where economic activity substantially affects interstate commerce, legislation regulating that activity will be sustained."⁵¹ At the other pole stands the Gun-Free School Zones Act, which could not be sustained under the third category once the Court found that it was neither a channel regulation nor a protection of an instrumentality or thing in commerce.⁵² The two groups differ in what the regulated activity is. Each activity in the catalogue is economic, and its combined effect on national markets can be traced directly. The school-zone statute was a criminal prohibition with no economic enterprise in it, and the government's account of its effect on commerce ran through a chain of inferences about violent crime, insurance costs, and education.⁵³ The next section takes up the considerations the Court uses to test such chains, so the point here is only that the third category depends on a showing of effect, and not every showing suffices.

Whether an effect is substantial is a judgment about how markets work, and the decisions describe the court's role in reviewing that judgment in two registers. The first is deferential. In Raich, the most recent of the decisions, the majority called its task a modest one: the Court need not determine whether the activities, taken in the aggregate, substantially affect interstate commerce in fact, but only whether a rational basis exists for concluding that they do.⁵⁴ A rational-basis inquiry is a deferential test that asks only whether a reasonable legislator could have reached the conclusion, whether or not the court would have reached it. The Court has never required Congress to legislate with scientific exactitude.⁵⁵ Justice Breyer gave two reasons for the leeway: the Constitution delegates the commerce power directly to Congress, and the link between a local activity and a national market calls for an empirical judgment that a legislature is more likely than a court to make accurately.⁵⁶

The second register is independent. Deference on the empirical estimate does not make Congress's conclusion final, because the Court has ample power to enforce the limits of the commerce power whatever Congress concludes.⁵⁷ Justice Rehnquist observed in an earlier case that Congress's conclusion that an activity substantially affects commerce does not necessarily make it so, and Justice Breyer accepted that courts judge the matter independently.⁵⁸ Morrison carries the same two-sided message. A congressional enactment falls only on a plain showing that Congress exceeded its bounds, yet the Constitution requires a distinction between what is truly national and what is truly local, and the Court enforced that distinction.⁵⁹ The two emphases are best read as layers of one inquiry. Raich took its rational-basis language from Lopez and treated Lopez and Morrison as limits that remain in force, so the deference attaches to Congress's estimate of what a class of activity does to a national market, and the independent judgment attaches to whether the asserted connection can support federal power at all.⁶⁰

This framework sets up the four decisions that follow. Lopez and Morrison show the independent judgment at work and the considerations the Court uses to test a claimed effect. Raich shows the deference, applied to a comprehensive regulatory scheme. National Federation of Independent Business v. Sebelius marks a further limit, because the third category reaches activity, and the Court declined to let Congress justify regulation by pointing to the effect of inaction on commerce.⁶¹ On an exam, the usual error is to treat any connection to the economy as enough, as though the category required only that an activity affect commerce. A fact pattern that traces a local act through one or two steps to a market invites that answer. The stronger answer states the substantial-effects requirement, applies it to the class of similar activity instead of the single instance, and recognizes that rational-basis review leaves the outer boundary to the courts.