Caseflicks

Supreme Court of the United States • 1901

Charles F. Champion, Appt. v. John C. Ames, United States Marshal

188 U.S. 321

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Takeaway

In short, this case established that Congress's power to regulate interstate commerce can include prohibiting the interstate movement of articles Congress reasonably deems harmful, even though their underlying activity is ordinarily subject to state police regulation.

Background

Charles F. Champion was arrested in Chicago under a federal warrant and held for removal to Texas. A federal grand jury in the Northern District of Texas had indicted him for conspiring to cause Pan-American Lottery Company tickets to be shipped by Wells-Fargo Express from Dallas, Texas, to Fresno, California, for sale.

The indictment rested on the Lottery Act of 1895, which criminalized causing lottery tickets and related lottery matter to be carried from one state to another. Champion declined to post bond and sought habeas corpus, contending that Congress lacked constitutional authority to punish this conduct. The federal circuit court for the Northern District of Illinois dismissed the writ, and Champion appealed.

Issues

Issue #1

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

Holding

Yes. Lottery tickets are articles of traffic, and their interstate carriage by an express company is interstate commerce within Congress's commerce power.

Reasoning

The Commerce Clause reaches more than the purchase and sale of ordinary goods. Drawing from Gibbons v. Ogden and later cases, the Court explained that commerce includes commercial intercourse in its many forms: navigation, transportation of persons and property, communication, and traffic. Independent transportation for hire across state lines is itself commerce, regardless of what the owner ultimately intends to do with the transported item.

Lottery tickets were not valueless scraps of paper. They purported to entitle their holders to participate in drawings for cash prizes; before a drawing, they could be bought and sold in a market by persons willing to speculate on the chance of winning. The tickets therefore represented a marketable interest and were properly treated as subjects of traffic.

Because the tickets were shipped from Texas to California through an express company engaged in interstate transportation for hire, the shipment fell within commerce among the several states. Congress could therefore regulate that transportation under the Commerce Clause.

Issue #2

Whether Congress may prohibit, rather than merely prescribe conditions for, the interstate transportation of lottery tickets.

Holding

Yes. Congress may prohibit the interstate carriage of lottery tickets as an appropriate regulation of interstate commerce.

Reasoning

The power to regulate commerce is plenary within its constitutional sphere. Under McCulloch v. Maryland, Congress may select appropriate means to carry out an enumerated power so long as those means are consistent with the Constitution. Regulation need not be confined to setting the terms on which a form of commerce may continue; in appropriate circumstances, it may exclude a harmful article or activity from interstate commerce altogether.

Congress reasonably could conclude that lotteries posed serious threats to public morality. The Court relied on prior decisions describing lotteries as a widespread social evil that preyed especially on the poor and credulous. If states could suppress lotteries within their borders to protect their people, Congress could prevent interstate commerce from being used to defeat those state policies and spread the same perceived harm across state lines.

The Court found support for prohibitory regulation in other federal laws. Congress could bar diseased livestock from interstate transportation and could prohibit interstate restraints of trade under the Sherman Act. Likewise, Congress had used its commerce power to permit states to apply their liquor laws to interstate liquor shipments after arrival. These examples showed that regulation can validly have a prohibitory effect.

The statute did not create a general federal police power or govern lotteries conducted wholly within a state. It regulated only interstate transportation, a subject expressly committed to Congress. Nor did the Fifth or Tenth Amendments protect a claimed liberty to use interstate channels to distribute material Congress could reasonably regard as harmful to public morals. The Court therefore affirmed the dismissal of Champion's habeas petition.

Dissents

Chief Justice Fuller

Reasoning

Chief Justice Fuller argued that the statute's real purpose was the suppression of lotteries, an exercise of the general police power reserved to the states. Congress could exclude lottery material from the mails because its postal power allowed it to determine what the mails would carry. But the Commerce Clause, in his view, did not give Congress a general authority to suppress morally objectionable local activities by forbidding their interstate incidents.

He rejected the majority's conclusion that lottery tickets were articles of commerce. A ticket was, at most, evidence of a contingent contractual claim, much like an insurance policy. The Court had held insurance contracts outside interstate commerce because they were personal agreements rather than market commodities with independent existence and value. Transportation by an express company could not convert a noncommercial paper into an article of commerce.

Fuller also maintained that the commerce power was granted to secure free and equal intercourse among the states, not to authorize Congress to erect barriers to that intercourse. Treating every item sent across state lines as commerce would erase the line between national commercial authority and state police authority, opening the way to federal control over matters traditionally left to the states.

The dissent acknowledged that states could outlaw lotteries and that lottery tickets could be banned from the mails. But it argued that state anti-lottery laws did not alter the constitutional allocation of power. However serious the social evil, Congress could not use an asserted commerce rationale as a pretext for exercising a police power the Constitution had not delegated to it. Justices Brewer, Shiras, and Peckham joined this dissent.