National Labor Relations Board v. Jones and Laughlin Steel Corporation

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During the first term of Franklin D. Roosevelt’s presidency, the Supreme Court invalidated many of his New Deal programs on the grounds that they exceeded Congress’s control over interstate commerce and invaded the powers reserved to the states by the Tenth Amendment. According to the Court, such crucial economic activities as agriculture, manufacturing, and mining had only an “indirect” effect upon interstate commerce and were therefore immune from federal regulation.

After Roosevelt’s overwhelming reelection victory in 1936, he proposed to Congress that he be allowed to appoint an additional justice to the U.S. Supreme Court for every Justice then over 70 years of age. Roosevelt’s justification for the proposal was that the Court was behind in its work and that he wanted only to help it. His real reason, of course, was to “pack” the Court with new justices who would be more sympathetic to his New Deal. Despite Roosevelt’s great popularity, Congress was skeptical about his court-packing plan and hesitant to tamper with the Court for political reasons. In the midst of the debate over the proposal, the issue suddenly became moot when, in 1937, the Court decided National Labor Relations Board v. Jones and Laughlin Steel Corp., upholding the application of the federal Wagner Act to labor relations within the steel industry.

Speaking for a five-member majority, Chief Justice Charles Evans Hughes rejected the old “direct-indirect” distinction that had exempted agriculture, manufacture, and mining from federal regulation, recognizing instead that whether or not a particular economic activity affected “commerce among the states” within the meaning of the Constitution is an empirical question. Speaking of the Jones and Laughlin Steel Corporation, as well as other large, national companies, Hughes asked rhetorically, “When industries organize themselves on a national scale, making their relation to interstate commerce the dominant factor in their activities, how can it be maintained that their industrial labor relations constitute a forbidden field which Congress may not enter when it is necessary to protect interstate commerce from the paralyzing consequences of industrial war?” While Hughes recognized that the commerce power “must be considered in the light of our dual [federal] system of government so as not to obliterate the distinction between what is national and what is local,” he concluded that when economic activities “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, Congress cannot be denied the power to exercise that control.”

National Labor Relations Board v. Jones and Laughlin Steel Corporation is a watershed in American constitutional development. First, it ended consideration of Roosevelt’s court-packing plan and the proposal was sent back to committee, never to be even voted on by Congress. Second, Hughes’s evolving, empirical view of the scope of federal power under the Commerce Clause opened the door to an expansion of federal authority into almost all areas of American economic and even social life. For forty years after the decision, there was only a single case of a federal law invalidated as beyond the reach of Congress’s commerce power (National League of Cities v. Usery 1976), and even that decision was reversed nine years later (Garcia v. San Antonio Metropolitan Transit Authority 1985). Third, the decision marks the Court’s abandonment of “dual federalism” and its acceptance of “cooperative federalism” as the new paradigm for understanding American federalism.

Ellis Katz

Last Updated: 2006

SEE ALSO: Carter v. Carter Coal Company; Commerce among the States; Garcia v. San Antonio Metropolitan Transit Authority; Heart of Atlanta Motel v. United States; National League of Cities v. Usery; Tenth Amendment; United States v. E. C. Knight Company; United States v. Lopez; Wickard v. Filburn