Caseflicks

Supreme Court of the United States • 1903

Lottery Case

188 U.S. 321 | 23 S. Ct. 321 | 47 L. Ed. 492 | 1903 U.S. LEXIS 1283

Full access

Unlock the video and quiz

The written brief is free to read below. Subscribe to watch the video explainer and take the quiz.

Create an account Log in

Takeaway

In short, this case established that Congress may use its Commerce Clause power to prohibit the interstate movement of lottery tickets, because regulation of interstate commerce can include barring a harmful form of commerce altogether.

Background

Congress’s Act of March 2, 1895 made it a federal crime to cause lottery tickets to be carried from one state to another. Champion was prosecuted in the federal Circuit Court for the Northern District of Illinois for causing lottery tickets, purportedly issued by a Paraguayan lottery company, to be transported interstate by an express company.

The tickets had been printed in the United States and were intended for interstate distribution. Champion argued that lottery tickets were not articles of interstate commerce and that Congress could not use the Commerce Clause to prohibit their transportation. The circuit court sustained the federal statute and entered judgment against him. Champion appealed.

Issues

Issue #1

Whether lottery tickets carried by an independent carrier from one state to another are subjects of interstate commerce.

Holding

Yes. Lottery tickets are subjects of traffic, and their interstate carriage is interstate commerce.

Reasoning

The Court read “commerce” broadly in keeping with Gibbons v. Ogden and later precedents. Commerce includes more than buying and selling tangible goods; it encompasses commercial intercourse, navigation, transportation, the transit of people, and the transmission of messages. Interstate transportation by a carrier for hire is therefore commerce even if the item transported is unusual or intangible in character.

Lottery tickets had market value and were bought and sold by persons willing to participate in the lottery. They also represented the holder’s chance to receive a specified monetary prize, for which the lottery company had arranged funds in American banks. Even though the tickets might not be judicially enforceable where lotteries were illegal, they remained articles of traffic and thus subjects of commerce.

Because the federal statute concerned only transportation across state lines, it regulated commerce among the states rather than transactions that were wholly internal to a single state. The fact that an express company carried the tickets as part of its interstate transportation business reinforced the interstate-commercial character of the activity.

Issue #2

Whether Congress’s power to regulate interstate commerce permits it to prohibit, rather than merely prescribe the manner of, the interstate transportation of lottery tickets.

Holding

Yes. Congress may prohibit the interstate carriage of lottery tickets as an appropriate means of regulating that form of interstate commerce.

Reasoning

The Commerce Clause gives Congress plenary authority over interstate commerce, subject only to constitutional restrictions. The power to regulate includes substantial discretion to select means that are appropriate and plainly adapted to a legitimate constitutional end; regulation need not be limited to rules governing the manner in which a trade is conducted.

Congress could reasonably conclude that interstate lottery traffic threatened public morals and undermined state policies against lotteries. The Court treated lotteries as a particularly serious social harm, quoting earlier decisions that described them as a widespread form of gambling that preyed on the poor, ignorant, and vulnerable.

A prohibition may be a permissible form of commerce regulation. The Court pointed to federal restrictions on transporting diseased livestock and to the Sherman Act’s prohibition of certain restraints of trade. It also relied on Congress’s authority to let state liquor laws operate against imported liquor after arrival, even though that authority could effectively exclude liquor from interstate trade.

The Court declined to decide whether Congress could exclude any article whatever from interstate commerce. It held only that, given the harmful character Congress attributed to lotteries, forbidding the interstate shipment of lottery tickets was a constitutionally appropriate means of regulating that particular commerce.

Issue #3

Whether the statute violated the Due Process Clause or the Tenth Amendment by invading liberty interests or the states’ reserved police powers.

Holding

No. The statute did not violate due process or improperly displace state authority.

Reasoning

The liberty protected by due process includes the freedom to pursue lawful occupations and make lawful contracts, but it does not create a constitutional right to introduce into interstate commerce material Congress may validly determine is injurious to public morals. No person has a protected right to conduct interstate lottery traffic merely because it can be profitable.

The Tenth Amendment did not bar the statute because the Constitution expressly delegates to Congress the power to regulate commerce among the states. Congress did not purport to regulate lottery activity conducted entirely within one state; it addressed only the interstate movement of tickets.

The statute complemented rather than displaced the states’ efforts to suppress lotteries. A state could ban lottery sales within its borders to protect its own population, while Congress could prevent interstate channels from being used to frustrate those state policies and to spread the lottery business nationwide.

Dissents

Chief Justice Fuller

Reasoning

Chief Justice Fuller, joined by Justices Brewer, Shiras, and Peckham, viewed the statute as an attempt to suppress lotteries under a general federal police power that the Constitution did not grant. Suppression of gambling for reasons of public health, safety, order, and morality was, in his view, a core police-power function reserved to the states.

He rejected the premise that lottery tickets were articles of commerce. A ticket was instead a contingent contractual instrument, comparable to an insurance policy or other personal obligation, not a commodity with an independent commercial existence. The Court’s prior insurance cases, he argued, showed that the transmission of such contracts across state lines did not itself constitute interstate commerce.

The dissent warned that treating anything sent across a state line as commerce would erase the distinction between commercial and noncommercial intercourse. Under the majority’s logic, even personal notes or social invitations could become articles of commerce merely by being placed with an interstate carrier.

Fuller also argued that the interstate-commerce power was designed to secure freedom and equality of commercial intercourse among the states, not to authorize Congress to erect barriers to it. In his view, Congress’s broader power over foreign commerce could not simply be transferred to interstate commerce, where the Constitution preserved the states’ autonomy and protected interstate movement of persons and property.

Although lotteries were widely regarded as harmful, the dissent maintained that an acknowledged evil could not expand Congress’s enumerated powers. Constitutional limits, Fuller concluded, must be enforced even where federal legislation appears useful or morally attractive.