Law Commons^™

Commerce, Jack M. Balkin

Michigan Law Review

This Article applies the method of text and principle to an important problem in constitutional interpretation: the constitutional legitimacy of the modem regulatory state and its expansive definition of federal commerce power Some originalists argue that the modem state cannot be justified, while others accept existing precedents as a "pragmatic exception" to originalism. Nonoriginalists, in turn, point to these difficulties as a refutation of originalist premises. Contemporary originalist readings have tended to view the commerce power through modem eyes. Originalists defending narrow readings offederal power have identified "commerce" with the trade of commodities; originalists defending broad readings of federal power …

Foreword, Louis H. Pollak

Michigan Law Review

Introduction to the Symposium Reflections on United States v. Lopez

The Constitution's Forgotten Cover Letter: An Essay On The New Federalism And The Original Understanding, Daniel A. Farber

Michigan Law Review

At the end of the summer of 1787, the Philadelphia Convention issued two documents. One was the Constitution itself. The other document, now almost forgotten even by constitutional historians, was an official letter to Congress, signed by George Washington on behalf of the Convention. Congress responded with a resolution that the Constitution and "letter accompanying the same" be sent to the state legislatures for submission to conventions in each state.

The Washington letter lacks the detail and depth of some other evidence of original intent. Being a cover letter, it was designed only to introduce the accompanying document rather than …

Commerce!, Deborah Jones Merritt

Michigan Law Review

In this article, I explore the Supreme Court's new definition of "Commerce ... among the several States."9 In Part I, I examine three new principles that Lopez announces and that could significantly rework the Court's Commerce Clause jurisprudence. Part II, however, shows that these principles must be understood in the context of almost a dozen factors narrowing the Supreme Court's Lopez decision. Part II also demonstrates that the lower courts have understood the contextual uniqueness of Lopez and already have distinguished the decision in upholding more than half a dozen broad exercises of congressional authority. Part III then shows that …

"A Government Of Limited And Enumerated Powers": In Defense Of United States V. Lopez, Steven G. Calabresi

Michigan Law Review

The Supreme Court's recent decision in United States v. Lopez marks a revolutionary and long overdue revival of the doctrine that the federal government is one of limited and enumerated powers. After being "asleep at the constitutional switch" for more than fifty years, the Court's decision to invalidate an Act of Congress on the ground that it exceeded the commerce power must be recognized as an extraordinary event. Even if Lopez produces no progeny and is soon overruled, the opinion has shattered forever the notion that, after fifty years of Commerce Clause precedent, we can never go back to the …

Enumerated Means And Unlimited Ends, H. Jefferson Powell

Michigan Law Review

United States v. Lopez can be read as a fairly mundane disagreement over the application of a long-settled test. The Government defended the statute under review in the case, the Gun-Free School Zones Act of 1990, along familiar lines as a permissible regulation of activity affecting interstate and foreign commerce.

In this essay, I do not address the question whether Lopez was an important decision. My concern instead is with the problem that underlies Lopez's particular issue of the scope of the commerce power: Given our commitment to limited national government, in what way is the national legislature actually limited? …

The Dormant Commerce Clause And State-Mandated Preference Laws In Public Contracting: Developing A More Substantive Application Of The Market-Participant Exception, Benjamin C. Bair

Michigan Law Review

This Note argues that the current focus on the relationship between states and their local governments as the key determinant of the constitutional validity of state-mandated preference laws is flawed. Instead, a court considering the validity of a state-mandated preference law should uphold such a law only if it distributes the benefits of state expenditures to state residents and does not excessively burden interstate commerce.

How To Think About The Federal Commerce Power And Incidentally Rewrite United States V. Lopez, Donald H. Regan

Articles

Almost sixty years after the "revolution" of 1937, we still do not have an adequate theory of the commerce power. The Court was right to abandon the theory of dual federalism epitomized by Carter v. Carter Coal Co.;' and it has got the right results in the major cases decided since then. But our post-1937 theory, whether before or after Lopez, is a mess. On the one hand, we have a collection of doctrinal rules that, if we take them seriously, allow Congress to do anything it wants under the commerce power. On the other hand, we continue to pay …

The Dormant Commerce Clause And State-Mandated Preference Laws In Public Contracting: Developing A More Substantive Application Of The Market-Participant Exception, Benjamin C. Bair

Michigan Law Review

This Note argues that the current focus on the relationship between states and their local governments as the key determinant of the constitutional validity of state-mandated preference laws is flawed. Instead, a court considering the validity of a state-mandated preference law should uphold such a law only if it distributes the benefits of state expenditures to state residents and does not excessively burden interstate commerce.

Untangling The Market-Participant Exemption To The Dormant Commerce Clause, Dan T. Coenen

Michigan Law Review

This article explores the market-participant rule. Part I traces the rule's evolution and shows how it has proven less rigid than some initially feared. Part II probes the roots of the rule by challenging justifications for it suggested by other observers. Part III offers an alternative theory of the market-participant doctrine, arguing in particular that it rests on a cluster of rationales that properly have led· the Court to uphold marketplace preferences as the "general rule." Part IV builds on Part III to advance a new, four-part framework for evaluating market-participant issues. Part V then uses that framework to apply …

Trademarks-Unfair Competition-Scope Of Federal Jurisdiction Under Section 43(A) Of The Lanham Act, Harry T. Edwards

Michigan Law Review

Plaintiff, a manufacturer and distributor of engine bearings and connecting rods for internal combustion engines, brought suit in a federal district court to enjoin the defendant from marketing and distributing the latter's products in containers which closely resembled those of the plaintiff, thereby falsely representing that the goods were produced by and originated with the plaintiff. The cause of action was based solely on section 43(a) of the Lanham Act. In dismissing the complaint, the district court ruled that any attempt to characterize the complaint as charging a "false description or representation" was without merit, and that "false designation of …

Securities Regulation-Applicability Of Exchange Act Section 10(B) To Transaction Effected By Means Of Intrastate Telephone Call, Michael A. Warner

Michigan Law Review

Plaintiff alleged that he had been defrauded in a sale of securities to the defendant. Plaintiff attempted to invoke section 10(b) of the Securities Exchange Act of 1984, which prohibits various fraudulent practices in securities trading. In order to state a cause of action under 10(b), it was necessary for plaintiff to allege that a means or instrumentality of interstate commerce had been used directly or indirectly in connection with the sale. The sale in this case had been effected through telephone conversations over wires located within the city of Philadelphia. However, the wires carrying the calls could be used …

Constitutional Law - Commerce Clause - Local Smoke Control Ordinance Not An Undue Burden On Interstate Commerce, John M. Niehuss

Michigan Law Review

In accordance with a scheme of federal ship inspection, appellant possessed certificates which permitted its ships to operate on the Great Lakes and which specified the type of boiler which might be used. While two of its ships were docked in Detroit, smoke was emitted from their boilers in violation of the minimum density and duration requirements of the Detroit Smoke Abatement Code. The equipment which appellant was then using made compliance with the ordinance impossible. When criminal proceedings were instituted against appellant, it brought an action to enjoin the City of Detroit from enforcing the ordinance on the theory …

Constitutional Law - Commerce Clause - Power Of States To Levy Net Income Tax On Businesses Engaged In Soley Interstate Commerce, John C. Peters S.Ed.

Michigan Law Review

Appellant, an Iowa corporation, maintained a sales office in Minnesota and employed salesmen who solicited orders from dealers within that state, though all of its sales contracts were made at the corporation's home office in Iowa. In accordance with a Minnesota statute, a state net income tax, fairly apportioned to the state's share of the corporation's interstate business, was levied upon appellant. In a suit brought by the state to collect this tax, appellant contended that the statute as applied violated the commerce and due process clauses of the Federal Constitution because it taxed the net proceeds of a business …

Constitutional Law - Interstate Commerce - Power Of States To Recalculate Aircraft Operating In Interstate Commerce, Robert W. Steele

Michigan Law Review

Defendant village, located one mile from Idlewild Airport, passed an ordinance prohibiting air flight over the town at less than 1,000 feet. Plaintiffs brought suit to enjoin enforcement of the ordinance, with Civil Aeronautics Board intervening as· plaintiff. The Civil Aeronautics Act of 1938 gives the CAB the authority to regulate aircraft in navigable air space, and the authority to define navigable airspace by setting minimum altitudes for flight. The CAB minimum altitude rules provide that aircraft flying over congested areas shall not be operated below 1,000 feet above the highest obstacle within a horizontal radius of 2,000 feet, except …

Regulation Of Business - Fair Trade Laws - Application Of The Mcguire Act To Mail Order Sales Emanating In A Non-Fair Trade Jurisdiction, Lawrence W. Sperling S.Ed.

Michigan Law Review

Defendant's store was located in the District of Columbia, a jurisdiction which does not have a statute permitting resale price maintenance. The defendant sent advertising and made mail order sales of plaintiff's product to consumers in Maryland, at prices below the resale price established by the plaintiff in accordance with the Maryland Fair Trade Act. Plaintiff sued to enjoin such advertising and sales on the ground that they were violations of the Maryland statute. On defendant's motion to dismiss, held, overruled without prejudice. On the main point in issue, however, the court ruled that neither the Maryland Fair Trade …

Constitutional Law - Commerce Clause - Federal Jurisdiction In Trade-Mark Infringement Proceedings Under The Lanham Act, Richard R. Dailey

Michigan Law Review

Plaintiff's trade-mark, "Minute Maid," had been registered under the Lanham Act in 1952 and had been used in interstate commerce in connection with the sale of frozen fruit juice concentrates since that time. Defendant's trade-mark consisted in part of the words "Minute Made." Defendant used its mark wholly within the State of Florida in the processing and sale of frozen meat products. Both plaintiff and defendant were Florida corporations. In a suit for trade-mark infringement, jurisdiction of the federal district court depended. on the provisions of the Lanham Act. The complaint alleged damage to plaintiff's good will established in interstate …

Constitutional Law - Commerce Clause - State Statute Requiring Interstate Motor Carrier To Secure A Permit, Marvin O. Young S.Ed.

Michigan Law Review

Petitioner brought an action in an Arkansas state court to enjoin enforcement of a state statute which required all contract carriers using the highways of the state to secure a permit from the state Public Service Commission. The Arkansas Supreme Court found that five driver-owners who had been arrested while transporting petitioner's product in interstate commerce without such a permit were "contract carriers" within the meaning of the statute. Neither petitioner nor any of the drivers had applied for a state permit. Under the terms of the statute, granting of the permit was contingent on certain factors, such as the …

Constitutional Law-A Federal Commercial Code-Some Possibilities Under The Constitution, Merrill N. Johnson

Michigan Law Review

It is the purpose of this comment to examine various possibilities of federal action which would help to bring about unification, simplification and clarification in the field of commercial law. The term "commercial law" has no commonly accepted connotation; it is taken here to ·include the law of transfers of personal property by commercial methods, of negotiable instruments, of chattel securities, of agency and of business associations; in short, all those fields of law which a Continental lawyer would term "private commercial law."

Constitutional Law - Commerce Clause - Power To Regulate Intrastate Transactions - Milk Prices, Michigan Law Review

Michigan Law Review

Pursuant to the Agricultural Marketing Agreement Act of 1937, conferring on the Secretary of Agriculture the power to regulate the handling of milk which is "in the current of interstate or foreign commerce, or which directly burdens, obstructs or affects interstate or foreign commerce in such commodity or product thereof," the secretary issued marketing orders fixing minimum prices to be paid to producers of milk in the Chicago area. Respondent, who purchased and sold milk only within the state of Illinois, refused to comply with the order. The United States sought enforcement of the order, but the complaint was dismissed. …

Constitutional Law - Validity Of State Use Tax On Mail Order Sales Of Foreign Corporation, Michigan Law Review

Michigan Law Review

The respondent, a New York corporation licensed to do retail business in Iowa, did a large mail order business there also. Iowa customers sent orders by mail to the company's warehouses located outside that state, and the merchandise was shipped directly to the purchaser. On these mail order sales the company neither collected from its customers, nor paid to the state, the Iowa use tax. The petitioner, chairman of the state tax commission, threatened to cancel the respondent's license as a retailer and its permit to do business in Iowa unless such use tax were paid. Respondent obtained an injunction …

Constitutional Law - Due Process - Federal Price Control Under Commerce Clause For Milk And Coal Industries, Stark Ritchie

Michigan Law Review

As a natural concomitant of the prevailing laissez-faire economic philosophy, a strong feeling against any governmental regulation of business prevailed in American legislatures until well into the second half of the nineteenth century. Prices were considered to be especially immune to governmental tampering. The first step in the breakdown of the notion that government had no power over prices was the case of Munn v. Illinois. This decision introduced the doctrine that the legislature had the right to regulate prices in any business which the courts should find to be "affected with a public interest." Posed as a deceivingly …

Taxation - Commerce Clause - Tax By Seller State On Contract To Sell Interstate, Walter B. Connolly

Michigan Law Review

Appellants were partners in the securities business with offices in New York City. In the course of their business they agreed to sell shares of stock to two firms, one engaged in business in Philadelphia, the other in Washington, D. C. The securities were mailed to banks in Philadelphia and Washington for delivery upon payment of sight drafts attached. Under the tax law of the state of New York, a tax was levied on the sale of this stock. Appellants sought a refund of the tax on the ground that the statute imposed an unconstitutional burden on interstate commerce. Held …

Taxation - Privilege Tax On Foreign Corporations - Due Process And Commerce Clauses - Validity Of Formula, James W. Deer

Michigan Law Review

The state of Texas levied an annual franchise tax on all corporations, both foreign and domestic, authorized to do business within the state. The tax was assessed on the basis of the amount of the total capital stock which was allocable to Texas, the allocation being based on the proportion that Texas gross receipts bore to total gross receipts. This formula, as applied to the Ford Motor Company, gave the statutory base of $23,000,000 on which Ford paid the tax under protest. The evidence showed that the Ford Motor Company had only an assembly plant in Texas worth $3,000,000, that …

Carriers - State Taxation Of Interstate Motor Carriers, Thomas K. Fisher

Michigan Law Review

Appellant, an Ohio corporation, was engaged exclusively in interstate commerce as a common carrier of property for hire by motor vehicle. In 1937 the Georgia legislature passed a Maintenance Tax Act which provided, inter alia, for a tax, graduated according to manufacturer's rated capacity, on each motor common carrier for hire, and a tax, substantially smaller in the respective rated capacities, on each motor vehicle not used as a common carrier for hire. Appellant contested the validity of the tax on the grounds that it was repugnant to the commerce clause of the Constitution and that it violated the equal …

Constitutional Law -Validity Of Registration Provisions Of Public Utility Holding Company Act Of 1935, Gerald L. Stoetzer

Michigan Law Review

In recognition of the abuses that arise from the monopolistic tendencies of holding companies in the public utility field and of the inability of the respective states to exert the necessary control thereof, Congress has attempted to draw certain of the public utility holding companies within the inquisitorial and regulatory control of the federal Securities and Exchange Commission. The Public Utility Holding Company Act of 1935, reciting in great detail facts showing the necessity for control of holding companies having as subsidiaries electric and gas operating utilities, indicates that Congress regarded the uncontrolled utility holding company as "an agency which, …

Carriers - Federal Regulation Of Motor Transportation Brokers, Charles E. Nadeau

Michigan Law Review

A broker is, in general, an intermediary or "go-between" in the business of negotiating contracts for others. His economic function is that of bringing buyer and seller together. A motor transportation broker is engaged in the business of arranging for contracts dealing with motor transportation service. His function is to bring together a prospective passenger or shipper seeking service and a carrier willing to provide the service demanded. "Tourist agency," "travel bureau," and "share-the-expense agency" are familiar terms used to designate the passenger transportation broker. There is a larger, but not so wellknown, group of brokers dealing in the hauling …

Carriers Distinction Between Common Carriers And Contract Carriers, Marcus L. Plant

Michigan Law Review

In the recent case of Ace-High Dresses, Inc. v. J.C. Trucking Co., the defendant was a corporation organized for the purpose of doing a general trucking business. At the time of the suit it was operating under separate contracts with five dressmaking establishments, one of which was the plaintiff. Under these contracts the defendant trucked dress goods every day except Sunday. The goods were taken on in New York, carried to New Haven, Hartford or Bridgeport, left there until processed, and then taken back to New York. The defendant's drivers had keys to the factories of the processors, entered …

Police Power - Validity Of A State Statute Fixing Maximum Charges For Tobacco Warehousemen, Peter S. Boter

Michigan Law Review

A statute of the state of Georgia prescribed maximum charges for handling and selling leaf tobacco. In this action, warehousemen sought to restrain the enforcement of the act, attacking it as an arbitrary exercise of state power contrary to the Fourteenth Amendment of the Federal Constitution and also as placing a substantial burden on interstate commerce in violation of the commerce clause. Held, that the statute was a constitutional exercise of the state's police power. Townsend v. Yeomans, (U.S. 1937) 81 L. Ed. 840.

State Taxation Of Interstate Motor Carriers, Paul G. Kauper

Michigan Law Review

Motor transportation for hire, as indicated earlier in the article, has become a business of large proportions and, like every other business, should be subject to the ordinary business taxes. More particularly, since it is a form of public transportation, it should be subject to the same kinds of taxes that are exacted from other businesses of the public utilities type.