t Modern trend in SCt’s Commerce Clauseanalysis began in 1937 decision NLRB v. Jones & Laughlin Steel Corp. Beginning with that case, SCt showed vastly greater willingness to defer to legislative decisions. Under present doctrines, SCt will uphold commerce-based laws if SCt is convinced that the activity being regulated “substantially affects” interstate commerce. In fact, in only one case since 1937 has SCt found that Congress went beyond its Commerce Clause powers (Lopez). SCt expanded reach of Commerce power by recognizing three theories upon which a commerce-based regulation may be premised: (1) an expanded “substantial economic effect” theory; (2) a “cumulative effect” theory; and (3) an expanded “commerce-prohibiting” protective technique.
NLRB v. Jones & Laughlin Steel Corp. - Expanded “substantial economic effect”
t Hughes1937. In pre-1937 cases, SCt had insisted upon a “direct” and “logical” relationship between the intrastate activity being regulated and interstate commerce. However, beginning in NLRB v. Jones, the SCt substantially relaxed the nexus required between intrastate activity being regulated and interstate commerce.
t Facts. This case tested the constitutionality of the National Labor Relations Actof 1935 (NLRA). The case involved the NLRB’s attempt to prevent Jones & Laughlin (a large integrated steel producer) from engaging in “unfair labor practices” by the discriminatory firing of employees for union activity.
t NLRA upheld. Majority held that NLRA, as applied to Jones & Laughlin, lay within the commerce power. The SCt noted that while Jones & Laughlin manufactured iron and steel only in Pennsylvania, it owned mines in two other states, operated steamships on the Great Lakes, held warehouses in four states, and sent 75% of its product out of Pennsylvania.
n Conclusion. Because of this multi-state network of operations, the SCt concluded, a labor stoppage of the Pennsylvania intrastate manufacturing operations would have a substantial effect on interstate commerce. Therefore, labor relations at the Pennsylvania plants could constitutionally be regulated by Congress. [this was essentially Cardozo’s dissent in Carter]
n “Current of commerce” rationale not needed: SCt expressly declined to rely on the “current of commerce” theory. SCt indicated that “current of commerce” cases were merely particular, not exclusive, illustrations of the commerce power.
n 10th Amendmentrejected as limitation. SCt also rejected the “manufacture” vs. “commerce” distinction (previously made in Knight). SCt implied, though it did not expressly state, that the 10th Amendmentwould no longer act as an independent limitation on federal commerce-clause powers.
t Koppelman. SCt did not abandon doctrinal notion that CC imposed limits, but argued that industrial-labor relations have “such a close and substantial relation to interstate commerce that their control is essential or appropriate to protect that commerce from burdens and obstructions.”
t This case was decided two weeks after West Coast Hotel v. Parrish(and two months after FDR announced court-packing plan), reversing itself and upholding minimum wage laws.
t Good confusion. How broad is Congressional power? Was it labor industrial relations generally, or steel industry in particular, that prompted decision?