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Carter v. Carter Coal Company (1936)

Last Updated: 2006

This Supreme Court case deals with two very different conceptions of federalism and the scope of Congress’s commerce powers. The first conception is dual federalism and assumes that the state and national governments are coequal and have sovereignty over distinct spheres. The second conception is national supremacy or cooperative federalism. In this latter conception, the national government is supreme and is not forbidden from using its powers to affect the constitutional space reserved to the states. In effect, the federal government and the states are junior partners in a cooperative effort to establish policies. The more broadly the commerce clause is read, the more the national government can affect the states. The Carter case is a good example of these competing views of federalism.

In 1935 Congress passed the Bituminous Coal Conservation Act in an attempt to bring stability in the coal industry, which was plagued by overproduction, poor wages, and unsafe working conditions. The act required that boards be established that would promulgate regulations on wages, hours, labor relations, and coal production. Producers were encouraged to participate in the program through a tax rebate incentive. A tax of 15 percent was assessed on the value of all coal produced. If a producer participated in the program, they received 90 percent of the tax back in the form of a rebate. Congress stated that it had the authority to pass the act pursuant to its power to regulate interstate commerce. The Carter Coal Company decided that it could not afford to opt out of the program. However, some of its shareholders felt differently and sued the company in an attempt to stop its participation.

Justice George Sutherland’s majority opinion in Carter advocated a strong dual federalism position. He emphasized that the states existed before the Constitution, and that the Constitution only conferred limited powers to the national government. Therefore, Congress’s powers must be interpreted narrowly; otherwise, the states could be reduced “to little more than geographical subdivisions of the national domain.” Sutherland interpreted interstate commerce very narrowly. He argued that coal mining is production, a purely local activity that precedes commerce. If coal mining affects interstate commerce, it is an indirect effect and therefore beyond the reach of the Commerce Clause. Federal regulatory power only attaches when the commodities are in transit; therefore, the Bituminous Coal Conservation Act was unconstitutional.

The Carter case marked the apex of the Court’s dual federalism jurisprudence and is credited with triggering Franklin Roosevelt’s court-packing scheme. The following year, 1937, the Court changed directions and supported the national supremacy view of federalism.

SEE ALSO: Commerce among the StatesHammer v. DagenhartHeart of Atlanta Motel v. United StatesNational Labor Relations Board v. Jones and Laughlin Steel CorporationSchechter Poultry Corporation v. United StatesTenth AmendmentUnited States v. E. C. Knight CompanyWickard v. Filburn


Lee Epstein and Thomas G. Walker, Constitutional Law for a Changing America: Institutional Powers and Constraints, 4th ed. (Washington, DC: CQ Press, 2001); and Kermit L. Hall, ed., The Oxford Companion to the Supreme Court of the United States (New York: Oxford University Press, 1992).