California’s Food Fight
🐖

California’s Food Fight

Guest
Richard A. Epstein
Show Date
April 24, 2022
Categories
Californiacommerce clause
Org/Affiliations
Hoover InstitutionUniversity of ChicagoNew York University
Created time
Apr 19, 2022 4:49 PM

Show date: Sunday, 4/24, 8am PACIFIC

Guest: Richard A. Epstein,

Hoover Senior Fellow and host of the Defining Ideas podcast “The Libertarian”, Richard Epstein returns to the program to discuss a new case making it’s way to the Supreme Court:

This past week, the Supreme Court agreed to hear an appeal in an important case that could determine the structure of American interstate markets for years to come. National Pork Producers Council v. Ross involves a constitutional challenge to Proposition 12, a 2018 California referendum that requires all pork products sold in the state be prepared in facilities meeting California standards of animal health and safety, no matter where they are raised. As the plaintiffs explain in their brief, virtually all of the pork products (some 99.8 percent) sold in California come from out of state. On the flip-side, California represents 13 percent of the national consumer market for pork products.

In its unique and inverted version of federalism, California seems to always find a way to impose its own strict regulations on the rest of the country—using its economic might to foist “progressive values” on other states. Can California legislate outside its own borders? Well, it’s complicated.

As usual, when I’m faced with a complex hybrid legal/economic questions, I turn to the Libertarian himself. And as usual, we will try to pack a semester’s worth of economics into an hour of radio. Epstein holds positions as a law professor at NYU, a senior lecturer at the University of Chicago, and Senior fellowship at Stanford’s Hoover Institution.

Links:

Learn more

Overview

The Commerce Clause refers to Article 1, Section 8, Clause 3 of the U.S. Constitution, which gives Congress the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.

Congress has often used the Commerce Clause to justify exercising legislative power over the activities of states and their citizens, leading to significant and ongoing controversy regarding the balance of power between the federal government and the states. The Commerce Clause has historically been viewed as both a grant of congressional authority and as a restriction on the regulatory authority of the States.

"Dormant" Commerce Clause

The “Dormant Commerce Clause" refers to the prohibition, implicit in the Commerce Clause, against states passing legislation that discriminates against or excessively burdens interstate commerce. Of particular importance here, is the prevention of protectionist state policies that favor state citizens or businesses at the expense of non-citizens conducting business within that state. In West Lynn Creamery Inc. v. Healy, 512 U.S. 186 (1994), the Supreme Court struck down a Massachusetts state tax on milk products, as the tax impeded interstate commercial activity by discriminating against non-Massachusetts

In Gibbons v. Ogden, 22 U.S. 1 (1824), the Supreme Court held that intrastate activity could be regulated under the Commerce Clause, provided that the activity is part of a larger interstate commercial scheme. In Swift and Company v. United States, 196 U.S. 375 (1905), the Supreme Court held that Congress had the authority to regulate local commerce, as long as that activity could become part of a continuous “current” of commerce that involved the interstate movement of goods and services.

From about 1905 until about 1937, the Supreme Court used a narrow version of the Commerce Clause. However, beginning with NLRB v. Jones & Laughlin Steel Corp, 301 U.S. 1 (1937), the Court recognized broader grounds upon which the Commerce Clause could be used to regulate state activity. Most importantly, the Supreme Court held that activity was commerce if it had a “substantial economic effect” on interstate commerce or if the “cumulative effect” of one act could have an effect on such commerce. Decisions such as NLRB v. JonesUnited States v. Darby, 312 U.S. 100 (1941) and Wickard v. Filburn, 317 U.S. 111 (1942) demonstrated the Court's willingness to give an unequivocally broad interpretation of the Commerce Clause. Recognizing the development of a dynamic and integrated national economy, the Court employed a broad interpretation of the Commerce Clause, reasoning that even local activity will likely affect the larger interstate commercial economic scheme.

Shift To A Stricter Interpretation

From the NLRB decision in 1937 until 1995, the Supreme Court did not invalidate a single law on the basis of the Commerce Clause.

Recently, the Supreme Court addressed the Commerce Clause in NFIB v. Sebelius, 567 US. 519 (2012). In Sebelius, the Court addressed the individual mandate in the Affordable Care Act (AFA), which sought to require uninsured individuals to secure health insurance in an attempt to stabilize the health insurance market. Focusing on Lopez's requirement that Congress regulate only commercial activity, the Court held that the individual mandate could not be enacted under the Commerce Clause. The Court stated that requiring the purchase of health insurance under the AFA was not the regulation of commercial activity so much as inactivity and was, accordingly, impermissible under the Commerce Clause.