PrintApril 3, 2010
The Commerce Clause Trap
A frontal assault on the commerce clause by ObamaCare opponents is a losing proposition. The argument: the federal government cannot regulate such-and-such because it is not interstate commerce.
But all it takes to defeat that argument is one finding by one judge in one case that interstate commerce is affected. Then it is a finding of fact and irrevocable. For example, in one famous case, interstate commerce was found because a restaurant's ingredients came from interstate commerce. How is anyone ever going to refute that? Is a court going to find there is no interstate commerce despite the fact that the enterprise buys its goods from interstate commerce?
But the conflict between state and federal law has its analogue in a similar dispute.
The Constitution granted federal courts jurisdiction in cases where citizens were from different states, also known as diversity jurisdiction. The Judiciary Act of 1789 provided that the federal court would use the precedent -- the common law -- of the state in which the federal court sat.
Diversity cases went along fine until 1842, when U.S. Supreme Court Justice Joseph Story delivered his opinion in Swift v. Tyson. It was an otherwise pedestrian case about commercial paper, but Justice Story created an issue: Would long-established state precedent control the outcome of the case, or would principles of "general" (that is, federal) law? Justice Story's opted for general law, reasoning:
... How can this court preserve its control over the reason and affections of the people of the United States; that control in which its usefulness consists, and which its own untrammeled learning and judgment would enable it naturally to maintain; if its records show that it has decided...the same identical question, arising on a bill of exchange, first one way, and then the other, with vacillating inconsistency? In what light will the judicial character of the United States appear abroad, under such circumstances?
Got that? Important final principles of general law are to be decided by federal courts, while local questions are the domain of state courts. Don't worry, said Justice Story -- the general law does not apply to local issues:
... the construction thereof adopted by the local tribunals, and to rights and titles to things having a permanent locality, such as the rights and titles to real estate, and other matters immovable and intra-territorial in their nature and character.
But whether a legal principle was general or local was to be determined by the federal judge. While there was no objective standard for the distinction, it appeared to be assumed that federal judges apparently would "know it when they saw it." And between 1842 and 1937, the area of general law "unexpectedly" expanded.
In 1938, the Supreme Court decided Erie v. Tompkins. The facts were so perfect: Tompkins, a Pennsylvania citizen, was allegedly injured while walking along Erie's Pennsylvania tracks by debris falling from its train. Under Pennsylvania precedent, Tompkins was a trespasser and could not recover. Tompkin's lawyer filed suit in federal court in New York since Erie was a New York corporation. Under federal precedent, Tompkins was not a trespasser and could recover, which he did. Erie appealed to the Supreme Court, claiming the Judiciary Act of 1789 to be unconstitutional.
The Supreme Court, through Justice Brandeis, expressly affirmed the constitutionality of the Judiciary Act. What was unconstitutional was not the Act, but the application of the Swift doctrine by the courts; that is, federal judges were acting unconstitutionally: "We merely declare that in applying the doctrine this Court and the lower courts have invaded rights which in our opinion are reserved by the Constitution to the several states." One of the main problems with the Swift doctrine was the absence of an objective standard by which to distinguish local from general: "... the impossibility of discovering a satisfactory line of demarcation between the province of general law and that of local law developed a new well of uncertainties."
The similarity between the Swift cases and the commerce clause cases is striking, even down to the language and terminology. In Swift, Story promised that federal law would apply only in cases involving general principles. He assured us that local issues would remain local . But as Justice Brandies pointed out in Erie, federal law eventually applied to formerly local issues: "Furthermore, state decisions construing local deeds, mineral conveyances, and even devises of real estate, were disregarded." If the Swift doctrine were allowed to continue its natural course, all laws, however local and minor, would be considered "general."
Challenging a federal law as being an unconstitutional exercise of the commerce clause is a fool's errand. When there is no "satisfactory line of demarcation" between the national powers and state powers, the challenge depends on a court's "untrammeled learning" to preserve its control over the people of the United States. It took 96 years of the accumulated absurdities and contradictions of the Swift doctrine to compel honesty from the Supreme Court. But if there be any doubt of the compelled nature of the Supreme Court's honesty, consider this startling confession from Supreme Court Justice Field, cited in Erie:
... I am aware that what has been termed the general law of the country - which is often little less than what the judge advancing the doctrine thinks at the time should be the general law on a particular subject - has been often advanced in judicial opinions of this court to control a conflicting law of a state. I admit that learned judges have fallen into the habit of repeating this doctrine as a convenient mode of brushing aside the law of a state in conflict with their views. And I confess that, moved and governed by the authority of the great names of those judges, I have, myself, in many instances, unhesitatingly and confidently, but I think now erroneously, repeated the same doctrine....
Those challenging the constitutionality of a federal law as exceeding the power of the commerce clause should reconsider that approach. Their whole case depends on the unlikely revival of an honest federal judiciary.
