Relevant Facts: In 1916, Congress passed the Keating-Owen Act seeking to regulate, among other things, the interstate transfer of goods produced by child labor under a variety of listed conditions. Roland Dagenhart worked in a cotton mill in North Carolina along with his two sons, and brought suit challenging Congressional authority under the Constitution to enact such a sweeping child labor law. Dagenhart argued that while Congress had the authority to regulate interstate commerce, their authority did not extend to regulating labor conducted wholly intrastate, even when- as here- the fruits of that labor eventually enter the stream of commerce and crossed State lines. Dagenhart successfully argued his case in district court, after which United States Attorney W.C. Hammer appealed to the Supreme Court. Hammer argued, consistent with growing public opinion at the time, that selected enforcement in various states created a national problem whereby some states benefited greatly from child labor. As a result, Hammer contended, Congressional action was necessary and constitutional to address a significant issue affecting interstate commerce.
Issue: Does Congress have the authority under the Commerce Clause to regulate intrastate labor standards concerning child labor where the goods produced, while legal, are ultimately involved in interstate commerce?
Holding: No, Congress does not have the authority to regulate intrastate child labor. Congress may regulate goods that are evil, directly regulate interstate commerce, and enact legislation consistent with their enumerated power; however, Congress exceeded its authority here by attempting to set a single national labor standard, inconsistent with the grant of power in the Commerce Clause and in violation of the Tenth Amendment reservation of rights- including police powers- to the States.
Reasoning: Justice Day, writing for the Court, began with a recitation of the history of interstate commerce regulations, the nature of Congressional authority, and past instances in which the Court upheld commercial legislation. Discussing lotteries, transportation of women, and interstate shipping of alcohol, the Court explained that in each case regulations were necessary to prevent the harm envisioned. In this case, however, the Court explained that the goods in question were themselves harmless, and that the evil complained of was wholly separate from the goods regulated or the interstate shipping that would invoke federal jurisdiction. The making of goods in this case is wholly intrastate in character, and the Framers did not envision all goods bound for interstate shipping coming under the powers of Congress. Next, the Court addressed the contention that child labor in some states created unfair trade conditions burdening interstate commerce. Here Justice Day explained that the power to regulate commerce did not extend to police powers even where unfair trade might result. Finally, while the Court admitted that regulation of child labor and conditions of that labor were indeed necessary, the authority to promulgate such regulations rested with the states. To allow Congress to act as it did here would be offensive to two separate constitutional provisions; first, it would exceed the enumerate powers of the Commerce Clause by extending to non-commercial, intrastate activities, and second, it would trample upon the rights reserved to the states as guaranteed by the Tenth Amendment.
Dissent: Justice Holmes, dissenting, took a completely different view of the nature of Congressional authority. He argued that goods bound for interstate transport were inherently within the meaning of interstate commerce, concluding just as the majority did that this would bring nearly the whole of manufacturing under federal purview, but failing to see anything troubling about that conclusion. Justice Holmes also parted company with his colleagues regarding the distinction allowed for goods regarded as evil and immoral. He suggested that the distinction between direct and indirect regulation of immoral goods and behaviors was illusory, and the power to reach regulating immoral behavior should include the means to legislate both direct and indirect instances of recognized immorality. Appealing to popular opinion, Justice Holmes also cited the growing consensus that limiting child labor and prolonging entry into the workforce was a valid public good, a reasonable object of Congressional attention within their power to regulate by the means selected here.
Conclusion: While later overturned as the Court’s view of Commerce Clause authority evolved with time and changed composition of the Court, here the Court limited the authority of Congress to regulate commerce when the goods in question were produced intrastate and the ultimate aim of the legislation in question was to regulate labor and not commerce.