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March 29, 2012

Wickard v. Filburn, the Supreme Court Case That Gave Unlimited Economic Power to the Federal Government

Roscoe Filburn is one of the most important names in American history that you've never heard of. Filburn, an Ohio farmer, took on the federal government over his rights as a farmer.

In 1938, the government passed the Agriculture Adjustment Act. This law was designed to bring price stability to the agriculture markets. As a part of that law, farmers were told to limit their production of crops. In the Filburn case, he was to keep his wheat production at a certain level.

Mr. Filburn violated the act by growing more than the allotted amount. He did so for private consumption on his farm. The federal government sued Mr. Filburn and the case made its way to the Supreme Court. In a unanimous decision the court found in favor of the federal government, thus paving the way for any economic activity to be regulated.

The entire decision from the case can be found here.

Some quotes from the decision that I found interesting:

Appellee (Filburn) says that this is a regulation of production and consumption of wheat. Such activities are, he urges, beyond the reach of Congressional power under the Commerce Clause, since they are local in character, and their effects upon interstate commerce are, at most, "indirect." In answer, the Government argues that the statute regulates neither production nor consumption, but only marketing, and, in the alternative, that, if the Act does go beyond the regulation of marketing, it is sustainable as a "necessary and proper" [Footnote 15] implementation of the power of Congress over interstate commerce.

"The maintenance by government regulation of a price for wheat undoubtedly can be accomplished as effectively by sustaining or increasing the demand as by limiting the supply. The effect of the statute before us is to restrict the amount which may be produced for market and the extent, as well, to which one may forestall resort to the market by producing to meet his own needs. That appellee's own contribution to the demand for wheat may be trivial by itself is not enough to remove him from the scope of federal regulation where, as here, his contribution, taken together with that of many others similarly situated, is far from trivial."

Therefore, any intrastate commerce that acts in mass volume, is now considered interstate commerce. Are there any economic actions you take that, if done in mass volume, wouldn't have a major impact or be considered interstate commerce?

"It is said, however, that this Act, forcing some farmers into the market to buy what they could provide for themselves, is an unfair promotion of the markets and prices of specializing wheat growers. It is of the essence of regulation that it lays a restraining hand on the self-interest of the regulated, and that advantages from the regulation commonly fall to others. The conflicts of economic interest between the regulated and those who advantage by it are wisely left under our system to resolution by the Congress under its more flexible and responsible legislative process. [Footnote 29] Such conflicts rarely lend themselves to judicial determination. And with the wisdom, workability, or fairness, of the plan of regulation, we have nothing to do."

Basically, the Supreme Court states that if you are disadvantaged as a result of regulation, it's your problem, not the courts. I wonder what happens when regulation means tortious interference?

There's enough justification in federal court precedence to side either way when it comes to Obamacare. We can only hope that there is some sensibility in the court to recognize that Americans have the right to conduct commerce without the federal government interfering or forcing a commercial transaction.

By the way, here's a link to the Filburn Farm.

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