COLUMBIA LAW SCHOOL PUBLIC LAW & LEGAL THEORY WORKING PAPER GROUP PAPER NUMBER 14-423 THE SECOND COMMERCE CLAUSE PHILIP HAMBURGER NOVEMBER 2014
THE SECOND COMMERCE CLAUSE 2014 Philip Hamburger The Commerce Clause has long figured as the only commerce clause in the United State Constitution. It is, indeed, The Commerce Clause. Nonetheless, it has a doppelgänger another commerce clause that inconspicuously shadows the first and reveals its outlines with unexpected clarity. And this second Commerce Clause is particularly interesting because it calls into doubt the doctrine on the so-called dormant Commerce Clause. It is well known how the Supreme Court developed doctrine on the non-use or dormancy of the Commerce Clause to counteract discriminatory state regulation of commerce. 1 What is less familiar is how the Constitution itself already responded to the discriminatory regulation of commerce in a second Commerce Clause, providing that No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another. 2 The dormant Commerce Clause doctrine is dubious enough on account of the text of the first Commerce Clause. The second Commerce Clause confirms the textual doubts about the dormant Commerce Clause by showing that when the Constitution sought to limit discrimination in the regulation of commerce, it did so expressly, not by implication. The second Commerce Clause, moreover, points to a structural critique, for it reveals that the Constitution responded to discrimination in the regulation of commerce with two mechanisms: in the first Commerce Clause with congressional power to regulate commerce, and only in the second with a constitutional prohibition on discrimination in the regulation of commerce. The First Commerce Clause. --In the Constitution s initial Commerce Clause, the people of the United States grant Congress the power to regulate Commerce... among the several States. As recognized by the Supreme Court, this clause gives 1 In the early nineteenth century, there were suggestions from some justices that the first Commerce Clause altogether barred state regulation of interstate commerce. See, for example, Johnson, J., dissenting in Gibbons v. Ogden, 22 U.S. 1, 227 (1824) (arguing that Congress s power under the Commerce Clause must be exclusive ); Story, J., dissenting in Mayor of the City of New York v. Miln, 36 U.S. 102, 156 (1837) ( I cannot admit that the states have authority to enact laws which act upon subjects beyond their territorial limits, or within those limits and which trench upon the authority of Congress in its power to regulate commerce ). By the mid-nineteenth century, however, in Cooley v. Bd of Wardens, 53 U.S. 299 (1851), the Supreme Court recognized that Commerce Clause, without congressional action, does not bar all state regulations of matters subject to Congress s power under that clause. Thereafter, the Court developed its dormant Commerce Clause doctrine. See, for example, Welton v. Missouri, 91 U.S. 275 (1876) (holding facially discriminatory state law unconstitutional under dormant Commerce Clause doctrine); Baldwin v. Seelig, 294 U.S. 511 (1935) (holding state statute with protectionist effect unconstitutional under the dormant Commerce Clause doctrine). 2 U.S. Const., Art. I, 9. The traditional inattention to this second Commerce Clause was well captured by Thomas Cooley, who quoted it and added: The provision is plain, simple, and just, and requires no comment. Thomas M. Cooley, The General Principles of Constitutional Law in the United States of America, 73 (Boston: Little, Brown, and Company, 1880). 1 Electronic copy available at: http://ssrn.com/abstract=2518187
power to Congress. According to the Court, however, even when Congress does not exercise its power under this clause, the clause by itself bars the states, in their regulations of commerce, from discriminating against other states. The Court draws this conclusion from the Constitution s unexercised or dormant grant of power to Congress, this being how the dormant Commerce Clause doctrine came to enjoy its curious name. Of course, it may be questioned how, in the absence of congressional legislation, the Commerce Clause a mere grant of power to Congress can limit the power of the states. If the grant of power to Congress had been exclusive, it would have deprived the states of all power to regulate commerce among the states. (Under the contemporary interpretation of the Commerce Clause, moreover, if the grant of power were exclusive, it would deprive states of their power to regulate commerce even within their borders.) Yet nothing in the Commerce Clause indicates it is exclusive. Nor does the dormant Commerce Clause doctrine suggest as much. Indeed, the structure of the Constitution suggests that the Commerce Clause is located in a section that does not limit the states at all. Article I of the Constitution vests all legislative powers of the United States in Congress, and the eighth section of this article enumerates the powers of Congress, including the power to regulate commerce among the states. The ninth section then refines the enumeration of these powers by placing limits on Congress. Only in the following section the tenth does the Constitution enumerate limits on the states, especially limits on the power of the states to regulate some of the matters that the eighth section grants to Congress. Revealingly, however, this tenth section even in its provision barring states from laying imposts or duties on imports or exports does not prohibit the states from discriminating in the regulation of commerce. 3 The framers were all too familiar with the danger of economic discrimination by the states, including discrimination imposed at their ports. 4 As James Madison later observed, some states, having no convenient ports for foreign commerce, were subject to be taxed by their neighbors, through whose ports, their commerce was carried on. 5 The framers, however, did not directly prohibit discriminatory state regulation of ports or, more generally, discriminatory state regulation of commerce. Instead, after exploring different options, the framers responded to interstate 3 Indeed, the tenth section imposes not equality provisions, but general prohibitions, such as that No State shall... make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts ; that No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it s inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress ; and that No State shall, without the Consent of Congress, lay any duty of Tonnage. U.S. Const., Art. I, 10. 4 Max Farrand, The Framing of the Constitution of the United States, 7 (New Haven: Yale University Press, 1913). 5 James Madison, Preface to Debates in the Convention of 1787, 3 Farrand 542. 2 Electronic copy available at: http://ssrn.com/abstract=2518187
discrimination by giving Congress power to regulate interstate commerce. 6 Once the framers gave Congress power over commerce among the states, Congress could adopt laws contrary to discriminatory state regulations and thereby render them void. Congressional power rather than a constitutional prohibition would preclude such discrimination. 7 The Second Commerce Clause. --The reliance on congressional power in the first Commerce Clause led to the adoption of a constitutional prohibition in the second. Precisely because federal power was the response to state discrimination, it also seemed necessary to bar federal discrimination. The first Commerce Clause addressed the danger of discriminatory state regulation of commerce by authorizing Congress to regulate commerce among the states. But then it was necessary to prevent discriminatory congressional regulation. To be sure, Congress could be expected, ordinarily, to oppose local interest and prejudice. 8 Nonetheless, powerful states might influence or persuade it to discriminate among the states. Such at least was the fear of Luther Martin and some other framers who desired some restrictory clauses drawn up for the... article respecting commerce. 9 One such was the second Commerce Clause. 10 After section eight, Article I, of the Constitution enumerated the powers of Congress, including the power to regulate commerce among the states, section nine cut back on this power by providing: No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another. This second Commerce Clause directly limited the power of Congress under the better known commerce clause. When imposing revenue measures, and when regulating interstate commerce, Congress might distinguish among the states, and on the whole, the people would have to trust Congress to tax and regulate in an acceptable manner. This was not to say, however, that Congress was entirely to be trusted. The ninth section of Article I therefore imposed a minimal anti-discrimination requirement on Congress by barring it from preferential discrimination among state ports in regulations of commerce or revenue. 6 Although Madison said he was more and more convinced that the regulation of commerce was in its nature indivisible and ought to be wholly under one authority, Roger Sherman persuasively answered that [t]he power of the United States to regulate trade being supreme can control interferences of the State regulations when such interferences happen; so that there is no danger to be apprehended from a concurrent jurisdiction. 2 Farrand 625 (Sept. 15, 1787). 7 For detailed analysis supporting this conclusion, see Julian N. Eule, Laying the Dormant Commerce Clause to Rest, 91 Yale L.J., 425, 430 (1982). 8 Philip Hamburger, Liberality, 78 Tex. L. Rev. 1215, 1241-54 (2000) (showing how founding generation recognized that Congress and the federal government would counteract the illiberal interests and prejudices of the states). 9 McHenry s notes (Aug. 22, 1787), in Max Farand, ed., 2 Records of the Federal Convention of 1787, 378 (1974). 10 Mr. Carrol & Mr. L. Martin expressed their apprehensions, and the probable apprehensions of their constituents, that under the power of regulating trade the General Legislature, might favor the ports of particular States. Madison s Notes (Aug. 25, 1787), in id, 417. 3 Electronic copy available at: http://ssrn.com/abstract=2518187
Structural Implications. --The second Commerce Clause reveals the structure of the Constitution s approach to discriminatory regulation of commerce. The Constitution does not leave limits on such discrimination to inferences from the nonuse of a federal power, but instead is explicit about its limits on this sort of discrimination. Nor is this an accident. Rather than place fixed limits on both state and federal discrimination, the Constitution employs federal power to limit state discrimination, and then places only a narrow legal limit on federal discrimination. This conclusion is confirmed by section ten of Article I, which enumerates limits on state power. The Constitution there does not say that [n]o Preference shall be given by any Regulation of Commerce. On the contrary, whether with respect to ports or other matters, section ten s limits on the states say nothing against any preference or discrimination in the regulation of commerce. Instead, section ten limits the states in other ways for example, by forbidding the states from passing laws impairing the obligation of contracts, and by preventing them from laying imposts and duties without the consent of Congress. These provisions cut back on the power of the states to regulate commerce, but they do not bar discrimination or preference in state regulation of commerce. The closest the Constitution comes to barring discrimination in state regulation of commerce is the Comity Clause. This guarantees that The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States the goal being to prevent states from discriminating against incoming citizens of other states. 11 The Comity Clause thereby has the effect of barring at least some discrimination in state regulation of commerce, but it does not directly bar such discrimination, for it does not focus on the regulation of commerce. Instead, discrimination in the regulation of commerce is the subject of the second Commerce Clause, and even then only as to a narrow range of federal discrimination. In short, the Constitution takes very different approaches to state and federal discrimination in the regulation of commerce. It directly responds to state discrimination by granting Congress power to regulate commerce among the states, and it then deals with the risk of federal discrimination by barring Congress from giving any Preference by any Regulation of Commerce to the Ports of one State over those of another. Conclusion. The second Commerce Clause thus calls into doubt the dormant Commerce Clause doctrine. The Constitution did not rely on mere implication to bar discrimination in the regulation of commerce, but rather addressed discriminatory 11 Philip Hamburger, Privileges or Immunities, 105 N.W. L.Rev. 61, 83 (2011) (explaining how the Comity Clause assured cross-jurisdictional rights to a mobile population ). 4
regulation expressly. When it did this, however, it prohibited federal discrimination, not state discrimination. This still matters because the dormant Commerce Clause doctrine remains so problematic. The doctrine has no persuasive foundation in the Constitution s text, it is notoriously open-ended and unpredictive, and it requires the judges to solve a problem that Congress has more than enough power to resolve on its own. The doctrine thus places the judges in the invidious position of having to decide cases on a foundation that is without historical authority, logical clarity, or contemporary advantage. No wonder the results often seem arbitrary. The judges therefore should reconsider the dormant Commerce Clause doctrine, and when they do so, they should examine not only the first Commerce Clause but also the second. The first reveals merely a grant of power to Congress, not a restriction on the states, and the second reinforces this conclusion. Textually, the second Commerce Clause shows that when the Constitution sought to limit discrimination in the regulation of commerce it did so expressly, not by implication. Structurally, the second Commerce Clause shows that the Constitution barred discrimination in the regulation of commerce not in the first Commerce Clause, but in the second. It generally used congressional power to limit state discrimination and used a constitutional prohibition to bar only a narrow range of federal discrimination. The first Commerce Clause thus must be examined in conjunction with the second. Both respond to discrimination in the regulation of commerce, but the first responds to state discrimination with congressional power, and only the second, in responding to federal discrimination, relies on a constitutional prohibition. 5