Carter v. Carter Coal Co.
|Carter v. Carter Coal Company|
|Argued March 11, 1936
Decided May 18, 1936
|Full case name||Carter v. Carter Coal Company|
|Citations||298 U.S. 238 (more)
56 S.Ct. 855; 80 L.Ed. 1160
|The court found that the Coal Conservation Act is not within Congress’ power according to the Commerce Clause. Just because a commodity will, in the future, be sold in interstate commerce does not give Congress the right to regulate it before the event occurs.|
|Majority||Sutherland, joined by Butler, McReynolds, Roberts, Van Devanter|
|Dissent||Cardozo, joined by Brandeis, Stone|
|U.S. Const. art. I, § 8, cl. 3, U.S. Const. amend. X|
Carter v. Carter Coal Company, 298 U.S. 238 (1936), is a United States Supreme Court decision interpreting the Commerce Clause of the United States Constitution, which permits the United States Congress to "regulate Commerce... among the several States." Specifically, it analyzes the extent of Congress’ power, according to the Commerce Clause, looking at whether or not they have the right to regulate manufacturing.
The Bituminous Coal Conservation Act was passed in 1935 and replaced the previous codes set forth by the National Industry Recovery Act (NIRA). The new act established a commission, made up of coal miners, coal producers, and the public, to establish fair competition standards, production standards, wages, hours, and labor relations. All mines were required to pay a 15% tax on coal produced. The act was not mandatory, but mines that complied would be refunded 90% of the 15% tax.
James W. Carter was a shareholder of the Carter Coal Company and did not feel that the company should join the government program. The board of directors for the company thought that the company could not afford to pay the tax and not receive anything back. Carter sued the Federal Government, claiming that coal mining was not interstate commerce and therefore could not be regulated by Congress.
The Supreme Court ruled the Bituminous Coal Conservation Act unconstitutional by a 5-4 margin. The majority reasoned as follows:
a) Just because a commodity is manufactured or produced within a state and is intended for interstate commerce, does not mean that its “production or manufacturing is subject to federal regulation under the commerce clause.”
b) A commodity that is meant to be sold in interstate commerce is not considered to be part of interstate commerce “before the commencement of its movement from the state.”
c) “Mining is not interstate commerce.” It is a local business and is subject to local control and taxation.
d) “The word 'commerce' is equivalent to the phrase 'intercourse for the purposes of trade'”: the process of mining coal does not fit within this definition.
e) The labor board has powers over production, not commerce. This confirms the idea that production is a purely local activity.
f) If the production of coal by a single person does not have a direct effect on interstate commerce, then the production of coal by many people can also not have a direct effect on interstate commerce.
g) The evils that Congress sought to control are “all local evils over which the federal government has no legislative control.”
h) “The federal regulatory power ceases when interstate commerce ends; and, the power does not attach until interstate commercial intercourse begins.”
Justice Cardozo, dissenting, reasoned that the price-fixing provision of the Coal Conservation Act was within Congress’s power because it had a direct effect on interstate trade. Associate Justices Stone and Brandeis agreed with this opinion
Chief Justice Hughes also wrote a separate opinion, agreeing with the other five justices that the act's labor provision was unconstitutional because it was poorly drafted and did not fall within Congress' jurisdiction to regulate interstate commerce but mainly sided with Cardozo's opinion and noted that the act's labor and marketing provisions were not dependent on one another. On April 12, 1937 however, Hughes, who wrote the majority opinion, would find the pro-labor Wagner Act constitutional in five separate cases and noted that it was skillfully drafted and specified interstate commerce regulations.
Main points of the case
The court points out that the activity that Congress is trying to regulate, according to the Bituminous Coal Conservation Act, is the production of coal, not commerce. Also, they make it clear that the flow of goods has not begun when coal is still being produced. Therefore, there is not a current of commerce. Third, the direct versus indirect test was used and the court found that the production of coal does not have a direct effect on interstate commerce. Lastly, the issue of whether or not the production of coal could be categorized as an “evil” was discussed. It was determined that, in this case, the production of coal is a local evil. Congress doesn’t have the right to regulate all evils, just national ones.
Epstein, Lee, and Thomas G. Walker. Constitutional Law for a Changing America: Institutional Powers and Constraints. 6th ed. Washington D.C.: CQ P, 2007. 448-450.
- 298 U.S. 238 (Text of the opinion on Findlaw.com)
- Text of the opinion from Cornell University's Legal Information Institute
- short overview of the case and facts
- Summary of Carter v. Carter Coal Company