The Foreign Commerce Clause
Virginia Law Review, Vol. 96, p, 949, 2010
93 Pages Posted: 18 Jan 2010 Last revised: 20 Mar 2012
Date Written: January 17, 2010
This Article comprehensively addresses Congress’s powers under the Constitution’s Foreign Commerce Clause. Congress has increasingly used the Clause to pass laws of unprecedented and aggressive reach over both domestic and foreign activity. Yet despite the Clause’s mounting significance for modern U.S. regulatory regimes at home and abroad, it remains an incredibly under-analyzed source of constitutional power. Moreover, faced with an increasing number of challenges under the Clause lower courts have been unable to coherently articulate the contours of Congress’s legislative authority. When courts have tried, their efforts have largely been wrong. The Article explains why they have been wrong and offers a doctrinally and conceptually sound approach to the Clause based on the text, structure and history of the Constitution. It also engages broader legal and policy questions triggered by the Clause. As I show, the Clause is crucial to how Congress constitutionally may project U.S. law around the world.
The Article advances two key limits on Congress’s foreign commerce power and reformats the Supreme Court’s three-category commerce framework for the Clause in light of these limits. The first is the nexus requirement, which derives from the Constitution’s grant of power only to regulate commerce “with foreign Nations,” not a general, global power to regulate commerce “among foreign Nations.” Foreign commerce that is the subject of federal regulation therefore not only must be “with” foreign nations, but also “with” the United States. That is, there must be a U.S. nexus. The second limit I refer to as the foreign sovereignty concern. It holds that Congress has no more power and, in some contexts, has less power to regulate inside foreign nations under the Foreign Commerce Clause than it has inside the several U.S. states under the Interstate Commerce Clause. For example, Congress cannot create comprehensive global regulatory schemes over international markets or prevent races to the bottom among the world’s nations the same way it can create comprehensive national regulatory schemes over domestic markets and prevent races to the bottom among the states. Because Congress lacks primary authority to create such global schemes, it cannot claim a derivative authority to reach local foreign conduct that threatens to undercut those schemes the same way it can reach local intrastate conduct in order to effectuate regulation “among the several States.”
Keywords: Commerce Clause, extraterritorial jurisdiction
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