Carter v. Carter Coal Co. 298 U.S. 238 (1936)
CARTER v. CARTER COAL CO. 298 U.S. 238 (1936)
This was the new deal's strongest case yet to come before the Supreme Court, and it lost. At issue was the constitutionality of the bituminous coal act, which regulated the trade practices, prices, and labor relations of the nation's single most important source of energy, the bituminous industry in twenty-seven states. No industry was the subject of greater federal concern or of as many federal investigations. After the Court killed the national industrial recovery act (NIRA) and with it the bituminous code, Congress enacted a "Little NIRA" for bituminous coal. Although the statute contained no provision limiting the amount of bituminous that could be mined, the Court held it unconstitutional as a regulation of production.
The statute had two basic provisions, wholly separable and administered separately by independent administrative agencies. One agency supervised the price and trade-practices section of the statute; the other the labor section, dealing with maximum hours and minimum wages, and collective bargaining. In nebbia v. new york (1934) the Court had sustained against a due process attack the principle of price-fixing in the broadest language. The labor sections seemed constitutional, because strikes had crippled interstate commerce and the national economy on numerous occasions and four times required federal troops to quell disorders. The federal courts had often enjoined the activities of the United Mine Workers as restraining interstate commerce.
The Court voted 6–3 to invalidate the labor provisions and then voted 5–4 to invalidate the entire statute. Justice george sutherland for the majority did not decide on the merits of the price-fixing provisions. Had he attacked them, he might have lost Justice owen j. roberts, who had written the Nebbia opinion. The strategy was to hold the price provisions inseparable from the labor provisions, which were unconstitutional, thereby bringing down the whole act, despite the fact that its two sections were separable.
Sutherland relied mainly on the stunted version of the commerce clause that had dominated the Court's opinions in united states v. e. c. knight co. (1895) and more recently in the NIRA and agricultural adjustment act cases: production is local; labor is part of production; therefore the tenth amendment reserves all labor matters to the states. That the major coal-producing states, disavowing states ' rights, had supported the congressional enactment and emphasized the futility of state regulation of commerce meant nothing to the majority. Sutherland rejected the proposition that "the power of the federal government inherently extends to purposes affecting the nation as a whole with which the states severally cannot deal." In fact the government had relied on the commerce power, not inherent powers. But Sutherland stated that "the local character of mining, of manufacturing, and of crop growing is a fact, whatever may be done with the products." All labor matters—he enumerated them—were part of production. That labor disputes might catastrophically affect interstate commerce was undeniable but irrelevant, Sutherland reasoned, because their effect on interstate commerce must always be indirect and thus beyond congressional control. The effect was indirect because production intervened between a strike and interstate commerce. All the evils, he asserted, "are local evils over which the federal government has no legislative control." (See effects on commerce.)
Chief Justice charles evans hughes dissented on the question whether the price-fixing provisions of the statute were separable. Justice benjamin n. cardozo, supported by Justices louis d. brandeis and harlan f. stone, dissented on the same ground, adding a full argument as to the constitutionality of the price-fixing section. He contended too that the issue on the labor section was not ripe for decision, because Carter asked for a decree to restrain the statute's operation before it went into operation. Cardozo's broad view of the commerce power confirmed the Roosevelt administration's belief that the majority's anti-labor, anti-New Deal bias, rather than an unconstitutional taint on the statute, explained the decision.
Leonard W. Levy
Stern, Robert L. 1946 The Commerce Clause and the National Economy, 1933–1946. Harvard Law Review 49:664–674.