By Professor Aaron Caplan
This post is part of the Strange Bedfellows series at Prawsblawg.
Those of us who also teach Civil Procedure are familiar with the “stream of commerce” concept within the constitutional law of personal jurisdiction. Under circumstances that the Supreme Court has notoriously failed to make clear, an entity that manufactures and sells a product in one state may be subject to personal jurisdiction to the courts of another if the product causes injury after traveling there through “the stream of commerce.” Less well remembered is that the “stream of commerce” once had a significant role to play in the law of the Commerce Clause.
These two streams of commerce are taught under different pedagogical silos, but may have something to say to each other.
During the Lochner era, SCOTUS cases involving the commerce power attempted to draw a line between transactions deemed to have “direct” impact on interstate commerce (which Congress could regulate) and those with only “indirect” interstate impact (which Congress could not regulate). Conversely, the federal government was allowed to impose regulations on interstate commerce that affected local commerce, so long as their impact was “indirect.” In appropriate cases, SCOTUS was willing to see “direct” impact when purely in-state activities took place within a stream of commerce that would predictably flow to other states.
The metaphor was introduced in Swift & Co. v. United States, 196 U.S. 375 (1905), which upheld an antitrust injunction against price-fixing in the meat industry. Even though the agreement to fix prices occurred within the boundaries of one state, that transaction had a significantly plain impact on the interstate flow of goods as to justify federal regulation. As Justice Holmes opinion said:
When cattle are sent for sale from a place in one state, with the expectation that they will end their transit, after purchase, in another, and when in effect they do so, with only the interruption necessary to find a purchaser at the stock yards, and when this is a typical, constantly recurring course, the current thus existing is a current of commerce among the states, and the purchase of the cattle is a part and incident of such commerce.
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