Table of Contents
A. Principles of Constitutional Interpretation ... 2
Section 51 of the Constitution ... 2
Federalism ... 2
Constitutional Interpretation ... 3
Starting points: ... 3
‘Trade and commerce’ ... 4
i) Interpretation of the Trade and Commerce Power ... 4
ii) Non-‐purposive power ... 5
iii) The incidental power ... 5
B. Inconsistency ... 11
1. Direct inconsistency ... 12
A) Impossibility of obedience ... 12
B) Direct denial of right ... 12
2. Indirect inconsistency ... 12
Cover the field test ... 12
How to determine indirect inconsistency? ... 13
3. Overlap between ‘denial of rights’ and ‘cover the field’ ... 16
Recent cases… ... 16
Mid-‐Term Revision ... 17
Question 1 ... 17
C. External Affairs Power s 51(xxix) ... 19
Geographical externalities (Points 4,5, and 6) ... 20
Point 4: Australia and other nations (relationship with other countries) ... 20
Point 5 Geographical externalities (matters outside Australia) ... 20
Point 2: Implementation of treaties ... 21
D. Corporations Power ... 24
The Corporation Power ... 24
Incidental Power ... 27
Definition of Constitutional Corporation ... 27
Incorporation ... 28
E. Freedom of Interstate trade (s. 92) ... 28
S 92 Prohibition ... 28
F. Taxation and Grants; Excise ... 31
1. Power of taxation ... 31
A) What is a tax? ... 32
B) Laws ‘with respect to’ Taxation ... 34
2. Grants Power ... 36
Limitations on Grant’s power (p 764) ... 37
G. The Defense Power (s 51(vi)) ... 38
H. Implied Freedom of Political Communication ... 41
Non-‐verbal political communication ... 44
Cases that would not breach freedom of political communication ... 45
I. Intergovernmental Immunities ... 46
Revision Problem ... 49
Question 1 ... 49
Question 2 ... 50
Question 3 ... 51
Question 4 ... 51
Question 5 ... 52
Question 6 ... 52
Question 7 ... 53
A. Principles of Constitutional Interpretation
Section 51 of the Constitution
− S 51: The Parliament shall subject to the constitution have power to make laws for the peace, order and good government of the Cth, with respect to…. (some examples)
o Trade and commerce with other countries and among the states o Taxation
o Borrowing money
o Telecommunication services o Military defense of Cth and states o Control armed forces
o External affairs
− S 51 of the Constitution contains the list of subject matters in respect of which the Cth government can make laws.
o Any law made by Parliament does not fall into the subject mattersà unconstitutional when court declares it (there has to be litigation)àinvalid
− ‘For the peace, order and good government’à Term of art to mean Parliament has full power. It is not a phrase of limitation. Citizens cannot challenge law based on this.
− ‘with respect to’à does not have to be specific, quite general.
− Even if the law falls within one of those subject matters but breaches other aspects of the Constitution (e.g. SOP), it will still be invalid.
Federalism
− S 51 powers are concurrent powers shared between the Cth and the states. S 109 states that if there is inconsistency, Cth laws prevail.
− Doctrine of immunity of instrumentalitiesàNo commonwealth laws could bind state governments. E.g.
Cth income tax/stamp duty on wages cannot be imposed on state government employees
− Principle of reserve state powersà when looking at 51 subject matters, interpret in such a way that you do not take away from the states legislative power that belongs to them
Amalgamated Society of Engineers v. Adelaide Steamship Co Ltd, (1920) 28 CLR 129.
-‐ P13-‐14 Engineer caseàCasebook.
-‐ Facts: The Engineers' Case arose out of a claim lodged by a union of engineers in the Commonwealth Court of Conciliation and Arbitration for an award relating to 843 employers across Australia. In Western Australia, the employers included three governmental employers. The question was whether a Commonwealth law made under the "conciliation and arbitration" power (section 51(xxxv)) could authorise the making of an award binding those three employers
-‐ Judgment:
o In this case the doctrine of implied intergovernmental immunities was overturned, although the High Court recognised that there were still implied limitations on the power of the Commonwealth over certain State employees. Under this doctrine, the general powers of the Commonwealth in s.51 of the Constitution could not be used to regulate governmental functions of the States, or the activities of state instrumentalities and statutory authorities. Therefore the power in s.51(xxxv) did not allow the Commonwealth Court of Conciliation and Arbitration to make an award to settle disputes between state instrumentalities and departments and their employees.
o The Court held that: ‘. . . the Parliament of the Commonwealth has power, under s.51(xxxv) of the Constitution, to make laws binding on the States with respect to conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of one State;(2) that a
dispute between an organization of employees and a Minister of the Crown for a State acting under the authority of a statute of that State as an employer . . . is such an “industrial dispute”.”
Constitutional Interpretation
− HC may look at convention debates if terms in the Constitution are ambiguous.
o In 1988, the High Court looked at s 92 of Constitution: trade and commerce amongst the state shall be absolutely free. HC could not figure out what that meant. Finally, it decided to look at what the convention debate said when they were framing the section.
− HC can interpret constitution according to contemporary meaning (considering contemporary values) o Justice Dean and Justice Kirby
o ProblemàWhat are the contemporary values and who is to determine them? It should be up to the Parliament, not judges.
− Constitution can be interpreted with reference to international law. Not compulsory.
Starting points:
1. Interpretation: Look at the constitution. What is the Constitution saying?
2. Characterization: examination of an act of Parliament, testing whether it comes within s 51 powers.
What is the statute about?
3. Does the subject matter characterized comes within the trade and commerce power? If your characterization produces subject matter outside the heads of powerà statute becomes unconstitutional
4. Prohibitions
− If statute can be characterized in a couple of ways, and one of the ways can fall into the HOP, court will read it that wayà reading down
− 2 qualifications/conditions for severance/reading down
o If you read down/severe, it must not have the effect of altering the intent of the Parliament (still have to be consistent with the act)
o After severing, ask does the statute still make sense?
− Fairfax v Commissioner of Taxation (1965) 114 CLR 1 Justice Kitto: The test for characterization is one of determining the subject matter of the statute or the challenged/impugned provision. This subject matter is determined by reference to the rights, duties, powers, and privileges which the impugned law changes, regulates and abolishes.
o Facts: The Income Tax and Social Services Contribution Assessment Act 1964 dealt with income tax and social services. Section 11 of the Act exempted certain superannuation funds from income tax if they invested in government securities. Fairfax was subject to the tax but challenged it by arguing it was a law with respect to superannuation funds, not an exercise of the taxation power.
o Judgment (Kitto J)
§ The Commonwealth law was in substance a law with respect to taxation. A tax does not cease to be valid because it regulates, discourages, or even definitely deters the activities taxed.
§ The plaintiffs argued that if superannuation funds fully undertook the law, and invested in government securities, then the Section 11 provision would result in no taxation revenue for the government. The Court however thought the issue of raising revenue was a secondary concern. The law was still concerned with taxation because it imposed a taxation obligation. The fact that the purpose was to deter superannuation funds, did not preclude it from being a matter with respect to taxation. As s51(ii) was a non-‐purposive head of power, like all such powers, it operates on the subject matter.
o When statute is capable of 2/3/4 characterization, court has to determine which is the dominant one. In this case, the dominant characterization is really not about tax, but provision of incentives to invest in public securities. Prior to Fairfax, only the dominant characterization that can be used to test the validity of the statute. But in Fairfax, court rejected that principle and stated that you can have dual/multiple characterizations, and if one of them gets you into power, then the statute is valid.
− Confirmed in Grain Pool of WA v Cth (2000) 202 CLR 479
o The general principles to apply in determining whether a law is with respect to the HOP is:
1. The constitutional text is to be construed with all the generality which the words used admit (ask whether it answers the descriptionàdisregard purpose and object)
2. The character of the law in question must be determined by reference to the rights, powers, liabilities, duties and privileges which it creates
3. The practical as well as legal operation of the law must be examined to determine if there is a sufficient connection between the law and the head of power
4. In a case where a law fairly answers the description of being a law with respect to 2 subject matters, one of which is and the other of which is not a subject matter appearing in s 51, it will be valid notwithstanding that there is no independent connection between the 2 subject matters
‘Trade and commerce’
i) Interpretation of the Trade and Commerce Power
1. W& A McArthur Ltd v Queensland (440 casebook)
-‐ HC said the terms ‘trade, commerce and intercourse’ are not terms of art. They are expression of facts, terms of common knowledge as well known to laymen as to lawyers, and better understood in detail my traders and commercial men than by judges’ .
-‐ T&C has never been confined merely to transportation of merchandise over the frontier. All the commercial arrangements of which transportation is the direct and necessary result form part of ‘T&C’.
E.g. the mutual communing, the negotiations, verbal and by correspondence, the bargain, the transport and delivery are all part of T&C
-‐ It is therefore impossible to limit the term T&C either ‘among the states’ or ‘with other countries’ to the mere act of transportation over the territorial frontier. All the commercial dealings and all the accessory methods in fact adopted by Australians to initiate, continue and effectuate the movement of persons and tings from State to State are also parts of the concept because they are essential for accomplishing the acknowledged end.
2. Australian National Airways Pty Ltd v Commonwealth (The Airlines Case) (1945) 71 CLR 29
-‐ Facts: Australian Airlines Act 1945 (Cth) set up government airline for interstate/territorial air transport services. ANA (competitor) argued that
o The government can regulate/make laws but could not engage in/undertake trade and commerce
o T&C does not include interstate transportation of persons who were not engaged in trading activities (transportation not for reward)
-‐ High Court:
o Trade and commerce power does permit the Cth to engage in T&C, not just regulate.
§ ‘A law authorizing the government to conduct a transport service for inter-‐State trade, whether as a monopoly or not, answers the descriptionà a law with respect to T&C S 51 (i)
The Parliament shall, subject to this Constitution, have power to make laws for the peace, order and good government of the Cth with respect to:
i. Trade and commerce with other countries and among the states
among the States. It is only by importing a limitation into the descriptive words for the power that such a law can be excluded’
o Transportation for profit itself is included in commerce (purchase of tickets)
o S92à whilst the statute was within 51(1) it breached the prohibition in s 92 (stops company from being given exclusive right to conduct service), therefore the act contained an invalid part.
ii) Non-‐purposive power
1. Murphyores Inc v Commonwealth (1976) 136 CLR 1
-‐ Facts: A regulation enacted pursuant to s 112 of the Customs Act 1901 (Cth) prohibited the exportation of mineral sands unless authorised by the Minister. The power was used here for environmental purposes.
The plaintiff challenged the validity of the prohibition.
-‐ Court: Upheld. The power conferred by s 51(i) enables the Parliament to prohibit, regulate and control the importation and exportation of goods, matter which lie at the heart of T&C with other countries.
o This power necessarily comprehends the power to select and identify the persons who engage in, and the goods which may become the subject of import/exportation. Does not have to follow trading policy
o Once the legislative power is established, it becomes irrelevant how, or upon what grounds, or for what motives it is exercised
-‐ Non-‐purposive power: Cth can enact laws with respect to T&C, but they don’t need to do it for a specific purpose. So long as they are regulating T&C, that’s enough.
iii) The incidental power
− The implied incidental power in the context of s51(i) raises 2 fundamental issues:
o Question 1: Can the Cth regulate intrastate T&C?
o Question 2: Can the Cth regulate matters antecedent or subsequent to interstate or overseas T&C?
− Classic statement in the US SC court decision of McCullough v Maryland. See D’Emden v Peder: ‘where any power or control is expressly granted, there is included in the grant, to the full extent of the capacity of the grantor, and without special mention, every power and every control the denial of which would render the grant itself ineffective
− Every legislative power carries with it authority to legislate in relation to acts, matters or things the control of which is found necessary (appropriate and adapted) to effectuate its main purpose and therefore carries with it power to make laws governing or affecting many matters that are incidental or ancillary to the subject matter directly in power (Mason J in Nationwide News P/L v Wills)
a) Intrastate/Interstate Trade and Commerce
1. R v Burgess; Ex parte Henry (1936) 55 CLR 608
-‐ Facts: An unlicensed pilot was prosecuted for flying (within NSW) in contravention of reg 6 of the Air Navigation Regulations 1921 (Cth), which prohibited and unlicensed person form flying an aircraft within the limits of the Cth. He challenged the constitutional validity of the regulation.
-‐ Held: The HC held that it fell beyond the Cth’s power under s 51 (i)à intrastate
o Latham CJ: rejected that it was practically essential to control both interstate and intrastate maritime trade and commerce. Constitution must be recognised and power over interstate does not involve incidental power for intrastate
o Evatt and McTiernan JJ:
§ It is impossible to accept the argument based on the reason of possible ‘commingling’ in air routes and airports, of the aircraft proceeding intra-‐State with the aircraft proceeding inter-‐State (rejected commingling theory)
§ However, this does not deny that there may be occasions when parts of intra-‐State aviation will be seen to occupy so direct and proximate a relationship to inter-‐State aviation that the agents and instruments of the former will be drawn within the ambit of the Federal power, for otherwise the particular Cth legislation of inter-‐ State commerce would be entirely frustrated.
o Dixon J: The express limitation of the subject matter of the power to commerce with other countries and among the states compels a distinction however artificial it may appear and whatever independence may be discovered between the branches into which the Constitution divides T&C
If this was a tutorial question…
-‐ Look at relevant regulation. SUBJECT MATTER: Seems to affect the right to fly across the Cth
-‐ What does T&C mean in the Constitution? YES IT INCLUDES TRANSPORT, but doesn’t include intrastate flight.
-‐ However, can we rely on incidental power?
o Question to ask: Is it necessary or appropriate to regulate intrastate flight in order to be able to make effective my regulation of interstate flight which is within the Constitution? HC said in R v Burgess said NO.
-‐ Can you read down the statute? Court said no. Undistributed expressions cant be read down.
o LISTEN TO THE LECTURE AGAIN!
2. Airlines of New South Wales Pty Ltd v New South Wales (No. 2) (1965) 113 CLR 54. (Casebook 450)
-‐ Main getaway: Although the Commonwealth has the power to regulate interstate air navigation under s 51(i) of the Constitution, it can only regulate intrastate air navigation under the implied incidental power attached to that head of power. It was held that intrastate air navigation can be regulated to the extent that it provides for the safety of, or prevention of physical interference with, interstate or foreign air navigation
-‐ An unsuccessful advocate of intrastate flight challenged the validity of the regulation.
-‐ Disputed sections:
o Regulation 198 prohibited the use of an aircraft in regular public transport operations except pursuant to a licence issued by the Director-‐General of Civil Aviation, who, according to regulation 199(4), will have regard to the "safety, regularity and efficiency of air navigation and to no other matters".
§ The Court rejected the American doctrine of iling that has found favour in the Supreme Court of the United States. Commonwealth legislative power cannot be enlarged to cover intrastate air navigation regardless of the integration of intrastate and interstate activities. Kitto J stated that "the Australian union is one of dual federalism", and it is the Court's role to preserve such distinctions, however arbitrary;
§ However, Commonwealth laws can include intrastate activities within its ambit if for the Commonwealth law to be effective, it must operate indifferently to all activities, whether intrastate or interstate, in the relevant area
§ Section 51(i) permits the Commonwealth to make laws, for interstate and foreign air operations, about safety, regularity and efficiency, as this would protect, foster and encourage interstate and foreign trade and commerce. Barwick CJ stated that this would then serve to extend to include intrastate air navigation, due to intrinsic factors related to flight, and the factual situation in this case. Similarly, the Commonwealth licensing regime, which Barwick CJ held to be a "substantial safety procedure", can apply to intrastate air operations or operators because of the impact of unsafe, inefficient or irregular air operations by intrastate airline operators. Kitto J stated that the law is within power if it protects against physical interference by having regard to safety, regularity and efficiency; this is in contrast to matters merely consequential to interstate or foreign air navigation (financial considerations) which would not suffice.
§ Taylor J: test of extent of power whethr its exercise was necessary to the safety and efficiency of interstate air navigation. Menzies J: Was regulation of intrastate air navigation ‘necessary to make effectual’ interstate air navigation regulation.
o Regulation 200B stated that "an airline licence authorizes the conduct of operations in accordance with the provisions of the licence".
§ Barwick CJ contrasted regulations 198 and 199(4) to regulation 200B. In the former, regulation of intrastate navigation was found to be in the Commonwealth's power in order to safeguard the safety of interstate and foreign air navigation. However, in the latter, the regulation purports to authorise the air operations themselves, as opposed to
regulating the use of specified aircraft in those operations. The stimulation or authorisation of those operations that the regulation provides goes beyond the regulation being a safety measure.
3. Minister for Justice (W.A.) (ex rel Ansett Transport Industries (Operations) Pty Ltd v Australian National Airlines Commission (1976) 138 CLR 492. (Casebook 456)
-‐ Facts: S19 ANA Act permitted interstate routes but in 1973, act was amended and in s19 B was introduced. Commission can operate air services intrastate where this is done for ‘the efficient, competitive, and profitable conduct of the business’
-‐ Argument: Need to have stopover at Port Hedland in WA to make interstate flight to Darwin more economically viable
-‐ Held: NO. It is not necessary/appropriate for Cth to regulate intrastate flight in order for it to be able to regulate interstate/international flight on the grounds of economic efficiency.
-‐ Dissenting: Mason J (IMPORTANT): He could not see any constitutional basis in the distinction between protecting the interstate trade from physical interference and factors relating to economic efficiency of the trade. Whilst safety questions would affect the trade significantly, so may economic factors. The end is the same. Therefore, why cannot the economic factors be taken into account?
-‐ WHEN ANSWERING EXAM…Under existing state of law, no (give authorities). However, in light of the closeness of the decision, compelling nature of Mason’s dissent, there is a possibility that the HC today would hold that economic factors could be taken into account.
4. United States v Wrightwood Dairy Co (1942) 315 US 110 (Casebook 464)
-‐ Facts: During the 2nd world war, Congress is concerned given the situation of war in the 20th century, the price of milk. IT wanted to ensure the price was kept so that it didn’t become overly expensive. In order to put a cap on milk (make it effective), clearly you have to be able to put a cap on milk that is made within the state (intrastate). Reasonàmost sellers selling intrastate, if prices are too high, it will affect interstate sales.
-‐ In Australia it would be an economic factor which will not be accepted. Yet, in US it was not a problem.
-‐ Held: The commerce power extends to those activities intrastate which so affect interstate commerce, or the exertion of the power of Congress over it, as to make regulation of them appropriate means to the attainment of a legitimate end, the effective execution of granted power to regulate interstate commerce.
-‐ Conclusion: It is very difficult/artificial to limit the question to only ‘physical interference’
b) Events subsequent to/before T&C (Production)
Matters Antecedent to Trade à ‘Production’
1. O’Sullivan v Noarlunga Meat Ltd (1954) 92 CLR 565. (Casebook 466) IMPORTANT FOR ASSIGNMENT (Whatever’s in the assignment will not be examined in the final exam)
-‐ Facts: Noarlunga Meat Ltd was charged with contravening the Metropolitan and Export Abattoirs Act 1936 (SA), s 52a, because it did not hold a State licence for slaughtering stock. All premises outside the metropolitan area "for the purpose of slaughtering stock for export as fresh meat in a chilled or frozen condition" were required to obtain a licence from the State Agriculture Minister. However, the defendant company was registered under the Commerce (Meat Export) Regulations (Cth). Regulation 4B prohibited the exportation of meat unless an export permit had been granted, and regulation 5 required that all premises used for the slaughter of meat to be registered. The defendant company argued that the State act was invalid by virtue of inconsistency with the Commonwealth regulations, which is dealt with in s 109 of the Constitution.
-‐ Regulation 4b (cth)
o Characterize: What are the rights, duties, powers, and privileges which the impugned law changes, regulates and abolishes?
§ Right to export is being affected o Interpret: Does that fall into T&C?
§ Yes it does.
§ Don’t need to worry about incidental power
o It’s a non-‐purposive power. Whatever the reason they are doing this is irrelevant because they are regulating exportà T&C
-‐ Regulation 5
o Characterize: right to produce the meat o Interpret: T&C
§ Does not include power to regulate production that is antecedent to T&C.
§ So does it fall into incidental power?
o The 3 judges that found that inconsistency existed had also established as a prerequisite that the Cth laws were valid. If they were invalid, there wouldn’t be any inconsistency.
o Justice Fullagar: In order for me to find Reg 5 valid, the incidental power in certain circumstances reaches into production. IT is undeniable that the power in respect of T&C with other countries includes a power to make provision for the condition and quality of meat or of any other commodity to be exported. By virtue of that power, all matters may affect beneficially/adversely the export trade of Australia (Test 1) in any commodity produced/manufactured in Australia must be the legitimate concern of the Cth.
§ Such matters include not only grade and quality of goods, but packing, description, labeling, handling, and anything that might affect the export market by developing it or impairing it.
§ (Test 2)The only time you can apply this principle is if you can identify in a particular trade/industry objectively (recognized in the industry) a process of production for export (different from production for local consumption).
-‐ Inconsistency? It was held that there was inconsistency (held by statutory majorityà no precedential value. No ratio to refer to in subsequent cases). i.e. cover the field
-‐ Critique:
o Is this a good test-‐objective test (Test 2)? It is artificial. Surely if you are going to apply the incidental power, isn’t the initial test the point (beneficial/adversely affect export).
o Note 2 on p469: Questionà can Cth regulate industrial relations? Court said no. Incidental to an incidental power and too remote
§ Not sure if this is right. Because back to the beneficial/adverse testà industrial relations can affect the trade if there’s too many strikes/ hygiene purposes etc.
SUMMARY:
To be able to regulate production for export, you must determine
1. Whether the regulation of the production beneficially/adversely affect the trade 2. Limit: Objectively identify in the trade a process of production for export?
Matters Antecedent to TradeàMixed Production
1. Swift Australian Co (Pty) Ltd v Boyd Parkinson (1962) 108 CLR 189 (Casebook 470)
-‐ Facts: Swift ran a poultry farm. He failed to obtain license for slaughter of poultry. A small proportion of his produce were exported. The company did not know which ones of the creatures were to be exported and which were to be consumed. Swift claimed that the Queensland act was inconsistent with the Cth legislation (same law in NM case).
-‐ Issue: But the question in this case was not whether in fact reg 5 was valid, but rather it was did reg 5 cover these mixed production scenarios.
-‐ Held: The majority held NO. Reg 5 was only applicable to export premises (Exclusively, does not cover mixed production). If that was the case, it did not cover Swift’s production. Therefore, the Queensland act will operate on Swift (no inconsistency). Conclusionà Swift had to obtain both Cth and state license in order to operate.
-‐ Dissenting view: In order for the Cth to make effective it’s regulations which did beneficially affect the export trade in meat, it had to be able to regulate abattoirs with mixed production. Reasonà producing stuff in the same premises, and there is no way of knowing which of the stuff will go overseas/home consumption. Need to make sure my regulation covers that.
o Only Owen had to consider whether s51(1) apply because he believed that reg 5 applied to mixed production.
2. Redfern v Dunlop Rubber Australia Ltd (1964) 110 CLR 194. (Casebook 471)à T&C
-‐ Facts: Australian Industries Preservation Act 1906 (Cth) made it an offence for any person to enter into a k in relation to T&C with other countries or among the states which was in restraint of trade (e.g.
monopoly).
-‐ Issue: Could s 4 validly apply to a k in restraint of trade which dealt with intrastate trade as well as interstate trade? Mixed k
-‐ Held: Could not avoid Cth legislation by simply inserting an intrastate element in it. If a k or combination is ‘in relation to T&C with other countries or among the States’, the sub-‐section can validly apply to participation in it, notwithstanding that it is in relation to other matter as well. Thus, participation in on the combination in restraint of overseas, inter-‐state, and intra-‐state trade is validly within the scope of the section
-‐ Is Redfern an application/affirmation of Owen’s judgment in Swift? NO. Redfern case deals with scenario (c) inter/intra state, not antecedent subject matter. The court is taking into account practical matters, and comingling approach in both (c) and (d) scenarios.
Matters subsequent to trade
− How far down the track can the Cth regulate goods once they have been imported?
o E.g, Prohibit sale and distribution of goods after importation. This is subsequent to import, can the Cth regulate it.
o General Principle: Only to the extent, using incidental power, that it is necessary or appropriate to give effect to the power to prohibit the import in the first place
In Australia
− Some s 92 cases suggests that at some point in their post-‐importation distribution, they cease to be within interstate or foreign commerce.
− There is one rare case on s 51(i)…
1. R v Smithers, ex parte McMillan (1982) 152 CLR 477, 485. (Casebook 471)
-‐ Facts: Customs Act authorized Cth officials to institute proceedings to recover as a pecuniary penalty the value of dealings in narcotics after they have been imported in contravention of the Act.
-‐ Argument: The importation had ended at the point of importation, and the goods were beyond Cth power.
-‐ Held: The entire court rejected the argument. Cth can also impose other regulations necessary (recovering proceeds of crime in this case).
In United States
− US suggests no line to be drawn once goods are imported. Congress may even go so far as to criminalize activity using a good which, at some point, has crossed interstate boundaries.
o In the US Scarborough v US case: Attempt to regulate possession of firearm which was in intrastate possession, but it had been moved across borders. Court held that transport of weapon in interstate commerce however remote in the distant past gives its present intrastate possession sufficient nexus.
− US has reached the ‘substantial affects’ doctrine, ie intrastate commerce, and indeed subject matters antecedent to commerce may be regulated if the activity being regulated has a substantial effect on interstate/foreign commerce (Wickard v Filburn)
o In applying the substantial affects test, the court had consideration to the following:
1. Did Congress have a rational basis or finding that the regulated activity affects interstate or foreign commerce?
2. If so, were the means chosen to regulate the activity reasonable and appropriate.
o Hodel v. Virginia Surface Mining, 452 U.S. 264 (1981)
§ Test: Did Congress have a rational basis for finding that the regulated activity affects interstate/foreign commerce (margin of appreciation test). If Yes, court will ask, if so were the means chosen to regulate the activity reasonable and appropriate in light of its affect on interstate/foreign trade
§ Held: Regulation of surface mining can be regulated. Not on effects of commodities produced but because the environmental effect of surface mining. Federal leg which
sought to deregulate all hotels in the country. All hotels served interstate travellers. Had effect in interstate trade. Congress power being used for matters beyond environmental, racial equality, civil rights issues beyond its core purpose-‐commerce/trade
− This was supplemented by the doctrine of aggregation
o In Wickard, in relation to a farmer’s wheat quota set by a federal law, that quota could include the wheat which was grown wholly for consumption on the individual farm, because, if one were to aggregate throughout all farms, the amount of wheat which was so reserved for consumption on the individual farm-‐even though trivial in respect of the one single farm-‐the impact on the price of wheat in the individual farmer’s quota, to be able to make the effective its power to regulate the price of interstate sales in wheat, which it was able to do by establishing the quota regime, because such wheat would otherwise have been purchased on the market
LIMIT given in United States v Lopez (Casebook 476).
Limited the scope of the Commerce Clause to exclude activity that was not directly economic in nature, even if there were indirect economic consequences. The known possession of a firearms has nothing to do with T&C.
Even if you can show meet test, it will only be within Fed power if subject matter being regulated is itself an economic activity. Known possession of firearm is not an economic activity.
-‐ Facts: The Gun-‐Free School Zones Act (the Act) of 1990 made possessing a gun within a school zone a federal offense. A 12th grade student (Lopez) was convicted of violating the Act when he brought a handgun to his high school. The Court of Appeals reversed the lower court on the grounds that the law was outside the scope of the commerce power.
-‐ Issue: Does the commerce power of Congress extend to activities that have no apparent connection to interstate commerce?
-‐ Held: NO. While maintaining the substantial affects doctrine they also held that the legislation, to come within the commerce power, had itself to be dealing, with activity of an economic kind, i.e. a commercial activity, i.e. some economic enterprise, some commercial activity, however broadly one might define those words
-‐ Compelling minority: Congress could have had a rational basis for finding a significant or substantial connection between gun related school violence and interstate commerce; because the literature established that school violence significantly interferes with the quality of education which in turn substantially affects interstate and foreign commerce
-‐ Majority (4/5): Rejected this view because it lacked any real limits, as any activity could be capable of being regarded as ‘commercial’ if one were to adopt this view.
United States v Morrison (2000) 529 US 598. (Casebook 480)
-‐ Facts: Federal statute that provided civil remedy for gender motivated violence. Unlike Lopez, there were lots of congressional evidence which showed not just the effect of rape/sexual assault have on individuals but also generally in society. The report also shows how widespread the problem was. It’s not enough to just have the criminals convicted, the victims need to be compensated. A group of students who were going to be sued sought to challenge the validity of the law.
-‐ 5/4 majority: Applying Lopez, the subject matter (gender motivated violence) is not itself an economic activity even though it can be shown that without some further deterrence to it, it is a major problem which has a substantial effect on interstate commerce. They also expressed the concern that unless some line is drawn, there will be an obliteration of the constitutionally mandated distinction between inter/intra state T&C.
-‐ Souter J dissent: Did not see any basis for the federal law itself to be an economic measure, or one relating to commercial activity. There was nothing in precedents to suggest this, which emphasized only the substantial effects doctrine. Also here the substantial congressional findings establishing substantial affect on interstate commerce.
-‐ Note: Where can the line be drawn then? Everything has a substantial effect on interstate commerce.
Despite the consistency of the dissent with precedent, it does still leave unresolved where the line is to be drawn, if one can be. When does the requisite nexus with interstate commerce become too remote?
