New Study Finds Administrative State Unconstitutional

By: Rob Natelson

The constitutional basis for most federal regulations is the Constitution’s Interstate Commerce Clause. A new historical study shows, however, that the Interstate Commerce Clause is nowhere near as broad as federal officials claim it is.

In other words, much of the federal “administrative state” is unconstitutional.

The Background

It is established law that the federal government has only the authority conferred by the Constitution. Within federal territories (such as Guam and Puerto Rico) and federal enclaves (such as Washington, D.C. and the Denver Federal Center), the central government enjoys a broad “police power” to govern for the general welfare. But within state lines, federal power is limited to the grants in the Constitution. The longest list of grants is in Article I, Section 8, but there are many others scattered throughout the document.

Despite the Constitution’s limits, the feds have been acting as if they did have a general police power: Congress has passed measures intruding into subjects as disconnected as land use, local tobacco sales, health care, and petty crime. In addition, Congress has created a multitude of unelected administrative agencies that micro-manage our lives without direct public accountability.

Apologists for federal power justify most of this by referring to the Constitution’s grant to Congress of authority “to regulate Commerce … among the several States.”

Of course, reasonable people might doubt whether local tobacco sales or petty theft really qualify as “Commerce … among the several States.” For the nation’s first 150 years, the courts and almost everyone else understood that the Interstate Commerce Clause gave Congress authority only over certain economic activities (particularly mercantile trade), and only when those activities extended across state lines.

Moreover, the Supreme Court actively enforced those limits, and voided congressional actions exceeding them.

However, as I related in my Epoch Times series “How the Supreme Court Rewrote the Constitution,” during the late 1930s and 1940s the justices began to look the other way when Congress extended its reach beyond the previously understood scope of the Commerce Clause.

The New Questioning

Law professors are overwhelmingly left-of-center, so there’s no shortage of pretexts to justify federal overreaching. Here are two: (1) “to regulate Commerce” means to superintend all economic activities, and (2) “Commerce” includes “social commerce,” which means all forms of human interaction. Of course, such claims would give Congress unrestricted power over almost everything.

Fortunately, some Supreme Court justices and scholars have questioned whether ignoring constitutional boundaries really is the right thing to do. Federal politicians’ and bureaucrats’ lust for control seems insatiable. And their forays outside traditional limits often haven’t worked well—resulting in high levels of dissatisfaction with the federal government.

In the 1990s and early 2000s, the Supreme Court voided a few of Congress’s more obvious cases of overreaching. More recently, a majority of the sitting justices have increased scrutiny over executive orders and agencies. And a few scholars have examined the history behind the Constitution to see what “regulate Commerce” really means.

Previous Studies

In addition to some shorter inquiries, there have been four comprehensive studies of the meaning of the Commerce Clause. The first was published in 2001 by professor Randy Barnett. It surveyed appearances of the word “commerce” in the constitutional debates of 1787–1790 and in other founding-era sources. It found that “commerce” almost always meant “mercantile trade.” Broader meanings were very rare.

In 2003, Barnett published a second survey, which showed similar results.

I published a third survey in 2006 (pdf). Because the Constitution is a legal document (“the supreme Law of the Land”), I examined how people employed the word “commerce” in English and American legal discourse. Using the Oxford University libraries and the Middle Temple library in London, I reviewed hundreds of legal documents, including every reported English and American court case issued over several centuries.

My findings substantially agreed with those of Barnett: “Commerce” almost always meant “trade.” However, I also learned that the synonyms “regulate Commerce” and “regulate trade” had a specialized meaning. More on that below.

The Latest Survey

The Federalist Society Review published my latest study on Dec. 16, 2022 (pdf). I fashioned this one to be more precise than its predecessors. Specifically:

Rather than focusing on the word “commerce” alone, I examined uses of the Constitution’s exact phrase “regulate Commerce,” as well as close variations, such as “Regulation of Commerce.” The latter phrase appears in the Constitution’s little-known Port Preference Clause (Article I, Section 9, Clause 6).

This study concentrated exclusively on how people employed those phrases in the constitutional debates of 1787 to 1790—not in other contexts or at other times.

The multi-volume “Documentary History of the Ratification of the Constitution” was recently completed. This enabled me to include in the survey virtually the entire historical record of the 1787–1790 constitutional debates, rather than merely selections as in prior studies.

The Results

The results broadly confirm previous findings: When the framers and ratifiers used the phrase “regulate Commerce” they meant “regulate trade.” Both “regulate commerce” and “regulate trade” meant to administer the body of jurisprudence known as the law merchant.

The law merchant (also called the lex mercatoria) was the law by which governments supervised certain transactions across political boundaries. The law merchant governed trade per se (exchange of goods), but it also governed conduct by merchants and other traders, navigation, commercial finance, bankruptcy, marine insurance, and a few other activities.

However, the law merchant didn’t include—and therefore the Commerce Clause didn’t grant—direct authority over other activities. Excluded from the Commerce Cause is most authority over land use, including agriculture and mining; manufacturing; land-based labor relations, insurance, health care; family law; and most crimes.

My article also includes some supplemental information. For example, it notes that the Port Preference Clause employs the phrase “Regulation of Commerce” in a purely mercantile/navigation sense. According to a rule of legal interpretation, this suggests that the similar phrase in the Interstate Commerce Clause should have a similarly restricted meaning.

My article also quotes language from Chief Justice Marshall’s famous opinion in Gibbons v. Odgen (1824). That language amply confirms the limited meaning of “regulate Commerce.”

I hope and expect that all four of these surveys will be used in litigation testing the limits of congressional power.