[SOUND] From the 1890s to 1936, the Supreme Court declared unconstitutional over 200 federal, state, and local laws that were trying to protect workers, consumers, the public. This era of American history is commonly referred to as the Lochner Era. It takes its name from a 1905 Supreme court decision Lochner versus New York. That case involved a New York law that limited the number of hours that bakers could work in a week. They couldn't work more than 60 hours a week, more than 10 hours a day. The Supreme Court declared that law unconstitutional, is violating freedom of contract, which it said was protected under the due process clause of the Fourteenth Amendment. Now though that case involved the due process clause and not Congress's power, the label Lochner Era is used to describe this entire 40 year period from the 1890s through 1936. It was during this time that Congress and state legislatures repeatedly adopting progressive legislation. These were laws to prohibit the use of child labor, laws to limit the number of hours that a worker could be employed, laws that required a minimum wage. If Congress adopted such laws during this time, the Supreme Court struck them down as exceeding the scope of Congress' power or infringing states' rights. If a state adopted such laws, they were struck down as violating due process. I'll cover the due process cases from the Lochner Era later in a subsequent part of this lecture. Now what I want to focus on is on how the Court from the 1890s to 1936 so limited the scope of Congress' Commerce Clause authority. But it's important to see, both of these transitive decisions. The case about the commerce clause and the case about the process is fitting together. They all came down at the same time. They all were about a very conservative court that was deeply committed to a laissez-faire unregulated economy, striking down government regulations. Now the court did this, with regard to the commerce clause, by narrowly interpreting what the word commerce means, and also by narrowly interpreting the phrase among the states. The court also did this by saying there's a zone of activities left just to the state governments, something I'll get to in the third aspect of this part of the lecture about Congress' power. Here I want to focus on what the court said on limiting Congress' authority to regulate commerce among the States. As to the meaning of commerce, the Supreme Court said, commerce is just one phase of business. The court said there are many stages of business. There's mining, there's manufacture, there's production, and then there's commerce, and that's just the buying and the selling. In Congress and the commerce clause could only regulate that last stage. The court said this early in this phase of American history, and said it late in its phase in 1936. Give examples. An early case was US v EC Knight. Congress passed anti-trust laws to break up monopolies. Congress believed that such monopolies will strain the trade and very much undermine the function of the economy. And there was an attempt to use the newly adopted federal anti-trust law to break up a monopoly in the sugar beet industry. But the Supreme Court held that it was unconstitutional for Congress to use its anti-trust laws, and to use its commerce power, to break up monopolies in the sugar beet industry. The Supreme Court said growing sugar beets is about production. It's not about commerce. The court said Congress is supposed to have limited powers under the Constitution. Therefore, the commerce power has to be interpreted in order to restrict what Congress can do. The court said Congress cannot use its commerce power to regulate things like production, or growing of sugar beets, or refining of sugar beets. All Congress can do is use its commerce power to regulate the last stage of business, the buying and selling stage of business. This of course is quite different from a John Marshall interpretive commerce. In Gibbons v Ogden, John Marshall would have said commerce includes all phases of business, but not during this time in American history. The Supreme Court said, we've gotta reserve governess of the states. We've gotta limit what Congress can do, and one way to do this is by narrowly defining the meaning of commerce. An example, from the latter part of the phase, is a case called, Carter v Carter Co., in 1936. It's part of President Franklin Roosevelt's New Deal legislation, codes of competition were developed for various industries. This particular case involved the code of competition that was developed for the coal mining industry. And it imposed things like minimum wage, maximum hours for coal miners. The Supreme Court in Carter v Carter Co in 1936 declared this unconstitutional. The Court said Congress was regulating mining, production. Congress can't do that. Congress can only regulate commerce, the buying and selling. This exceeds the scope of Congress' authority. It's worth thinking about whether this is sensible and a desirable way of interpreting the Constitution. Those who would defend the Court's decision would say it's essential that Congress' commerce power be limited, because federal government is meant to have limited powers. Most governance is to be at the states. And they would say this is a way of limiting what Congress can do. But critics would say this is an arbitrary limit, why would a company want a monopoly in growing sugar beets? Because it let's them have them monopoly profits when it comes time to sell them. It's an arbitrary distinction among stages of business. That makes no sense to draw a distinction between coal mining and the ultimate selling of coal. But if coal companies don't have to pay very much to the workers, then they can sell the coal and make more of a profit. Again arguing that the distinction among stages of business is non-sensible. Those who would oppose what the Supreme Court said Congress should have all of the powers that are necessary to regulate the modern economy. So one thing the court did during this era was it narrowly define the scope of Congress' commerce power by restrictively interpreting the word commerce. Another thing it did was narrowly interpret what among the states mean. The Supreme Court said in order for Congress to regulate, it would have to be shown that the activity had a direct effect on other states. An indirect effect wouldn't be enough. Case here was Schechter Poultry v US from 1936. It's commonly referred to in American history as the sick chickens case. As I mentioned, the National Industrial Recovery Act, a key New Deal law, created codes of competition for various industries, and a code of competition was created concerning the poultry industry. It limited, with reguard to sick chickens, was trying to make sure that only healthy chickens were sold. A kosher butcher in New York brought a challenge to this. Now I think there was a strong argument that this fit within even a narrow definition of the commerce clause. That these chickens were actually going to New Jersey, so isn't that among the states? But the Supreme Court found this law to be unconstitutional. The Supreme Court said, Congress here was regulating chickens within the state of New York. That's not among the states. Now the United States government, defending this law, tried to go back to John Marshall and Gibbons v Ogden. Tried to say among the states means effecting more than one state. Sick chickens in one state, especially if they're going to other states, do have an effect. But the Supreme Court said Congress can regulate activities based on an effect in other states only that is, quote, a direct effect. An indirect effect isn't good enough. The court defended this by saying that Congress is meant to have limited powers. Congress doesn't have restricted authority if any effect is enough. The only way to make sure we preserve the states is that there be a direct effect. But again, one can question whether this is a desirable distinction. How is a line to be drawn between what's direct as opposed to indirect? It's really a matter of degree, it's a matter of characterization. These cases are typical of what the court was doing from the 1890s to 1936, narrowly defining the scope of Congress' commerce power, narrowly defining what commerce means. Restrictively interpreting what among the states mean, and in that way adopting what I've call this federalist, this restrictive perspective on Congress' power. All of this then changes, and changes dramatically, in 1937 when the pendulum swings, and swings very far in the other direction. And the court adopts what I'd call the Nationalist perspective. As I mentioned earlier, this might have been precipitated by President Franklin Roosevelt's court packing plan. As I mentioned after being elected President, by a landslide in 1936, Roosevelt proposed increasing the size of the Supreme court, giving the President the power to appoint a new justice for everyone who was currently over the age of 70 up to a maximum of 15 justices on the court. Roosevelt was furious about how the Supreme Court, during his first term, had repeatedly been striking down New Deal legislation as exceeding in scope of Congress' commerce power. But what happens is, Congress becomes very concerned over is this an encroachment of the judicial independence? Congress holds elaborate hearings and is holding up the idea of court packing, and while this is going on, one justice, Owen Roberts, changes his mind. Roberts, who had been with the majority in limiting Congress' power, in limiting state power with the due process clause, all of the sudden joins with the dissenters to create a new majority. A majority that very quickly repudiates all of the decisions of the Lochner Era. With regard to the commerce clause, the case was in 1937 NLRB v Jones & Laughlin Steel, and it concerned the ability of Congress to regulate labor within a steel mill. The steel mill said we're production. We're not buying and selling. To regulate our workers, to regulate our practices, doesn't fit within the scope of Congress' commerce power. The Supreme Court, in NLRB v Jones Laughlin Steel, rules in favor of the federal government, favor of the ability to regulate what goes on in steel mills. And the court rejects the early Lochner Era decisions. The court says that commerce is all stages of business. Commerce isn't just limited to just buying and selling. The court said Congress is meant to broad authority under the commerce clause. The court follows this up, very quickly, with two other quite famous decisions. One is a case called Wickard v Filburn. It's one of the most famous cases ever decided by the Supreme Court with regard to the commerce power. It involves a federal law that limited the amount of wheat that a farmer could grow for his or her family's consumption. Now the family and the farmer challenge the law, saying what we grow for our home consumption doesn't fit with in the scope of Congress' power of commerce among the states. But the Supreme Court ruled against the farmer and upheld the Federal Law. The Supreme Court said we're passed the time when the Court was going to enforce limits on Congress's commerce power. The Court said Congress can regulate so long as it's an activity, that taken accumulatively, has an effect on interstate commerce. Let me say that again. Wickard v Filburn says Congress can regulate so long as it's an activity, that taken accumulatively, has an effect on interstate commerce. The Supreme Court says, home grown wheat has a substantial effect on interstate wheat prices. Now, no one claimed what this farmer was growing really itself had an effect on interstate commerce. Supreme Court says, that doesn't matter! The Court says, if it look cumulatively, at all of the wheat, that all of the farmers grow for home consumption, cumulatively there's a substantial effect on interstate commerce, and that's all that's required. So no longer does it have to be a direct as opposed to an indirect effect. That so long as the activity is with type, that taken cumulatively, has a substantial effect on interstate commerce. That's good enough. What, taken cumulatively, doesn't have that kind of an effect? The final case to come down, and these are all in the early 1940s, is a case called the United States v Darby. And this involves whether or not Congress can require that a minimum wage be paid in a lumber mill. Now the challenge was brought by the lumber mill owner that this isn't part of interstate commerce. This is localized within a state, can't be said that what these workers are paid really has an effect on interstate commerce. And the Supreme Court upholds the federal law. And the court says the time has passed in which we are going to strike down laws as exceeding the scope of Congress's commerce power. The court says commerce involves all stages of business. That includes the making of lumber. And Congress can regulate anything, that taken accumulatively, has an effect on those in other states. Obviously, what workers are paid has, when you look at accumulative across the country, an effect on interstate commerce. And so the court upholds the federal law. These three cases, NLRB v Jones & Laughlin Steel, Wickard v Filburn, the United States v Darby, completely repudiate the Lochner Era Commerce Clause decisions, and they usher in an era, that from 1937 to 1995, saw not one federal law declared unconstitutional as exceeding the scope of Congress's commerce power.
