Hammer v. Dagenhart

• In 1916, Congress enacted the Keating-Owen Act (aka Child Labor Laws).  This prohibited the transportation in interstate commerce of goods produced in factories that violated the law.
• Congress justified the Act on the basis of Article I, Section 8, Clause 3 of the Constitution, aka the Interstate Commerce Clause.
• The father of two children employed in a cotton mill in North Carolina secured an injunction against enforcement of the act on the grounds that it was unconstitutional.
• The US Supreme Court sustained the injunction by 5-4.
• The Supreme Court argued that the purpose of the act was not to regulate interstate commerce, but to standardize child labor laws.
• The point of the law was to effect the circulation of such goods in other States with strict child labor laws.
• This prevents producers in States that exploit kids to make cheap products from having an unfair advantage over producers in States that have strict laws.
• The act transcends the authority delegated to Congress over commerce but also exerts a power as to a purely local matter to which Federal authority does not extend.
• "The commerce clause was not intended to give to Congress a general authority to equalize such conditions."
• In a dissent, Justice Holmes argues that if an act is within the powers specifically conferred upon Congress, it is not made any less constitutional because of the indirect effects that it may have, however obvious it may be that it will have those effects.
• Holmes argued that the power to ban the interstate transport of goods was wholly within Congress's power, and they could ban it for any reason they like, even one who's purpose is to regulate State laws which Congress has no direct power over.
• "States may regulate their internal affairs and their domestic commerce as they like.  But when they seek to send their products across State lines they are no longer within their rights."
• The ruling of the Court was later overturned and repudiated in a series of decisions handed down in the late 1930s. Specifically, Hammer v. Dagenhart was overruled in 1941 in the case of United States v. Darby Lumber Co. The Court in the Darby case sided strongly with Holmes' dissent.  They also recast the reading of the 10th Amendment, regarding it as a "truism" that merely restates what the Constitution had already provided for, rather than offering a substantive protection to the States, as the Hammer ruling had contended.
• One reason to have Federal laws for things like this is that if there isn't, there will be a "race to the bottom," where companies will move from States with restrictive labor laws to States without restrictive labor laws.  Only the Federal government can harmonize different State laws.