McCulloch v Maryland
What happened? Gibbons v Ogden
A New York state law gave Robert R. Livingston and Robert Fulton a 20-year monopoly over navigation on waters within state jurisdiction. Aaron Ogden and other competitors tried to forestall the monopoly, but Livingston and Fulton largely succeeded in selling franchise or buying competitors' boats. Ogden filed suit against Gibbons in New York state court, and received a permanent injunction The New York state court rejected Gibbons' argument asserting that U.S. Congress controlled interstate commerce.
Reasoning Watters v Wachovia Bank
A national bank has the power to engage in real estate lending through an operating subsidiary, subject to the same terms and conditions that govern the national bank itself; that power cannot be significantly impaired or impeded by state law.
SCOTUS Ruling Wickard v. Filburn
Congress may use its Commerce Power to regulate or prohibit activities provided the economic effects of such activities are substantial
What happened? Wickard v. Filburn
Filburn was a small farmer in Ohio who harvested nearly 12 acres of wheat above his allotment under the Agricultural Adjustment Act of 1938. Filburn was penalized under the Act. He argued that the extra wheat that he had produced in violation of the law had been used for his own use and thus had no effect on interstate commerce, since it never had been on the market.
What happened? McCulloch v Maryland
In 1816, Congress chartered The Second Bank of the United States. In 1818, the state of Maryland passed legislation to impose taxes on the bank. James W. McCulloch, the cashier of the Baltimore branch of the bank, refused to pay the tax.
Reasoning Gibbons v Ogden
In a concurring opinion, Justice William Johnson argued that the national government had exclusive power over interstate commerce, negating state laws interfering with the exercise of that power.
SCOTUS decision McCulloch v Maryland
In a unanimous decision, the Court held that Congress had the power to incorporate the bank and that Maryland could not tax instruments of the national government employed in the execution of constitutional powers.
Reasoning McCulloch v Maryland
Marshall also held that while the states retained the power of taxation, the Constitution and the laws made in pursuance thereof are supreme and cannot be controlled by the states. Chief Justice Marshall noted that Congress possessed powers not explicitly outlined in the U.S. Constitution. Marshall redefined "necessary" to mean "appropriate and legitimate," covering all methods for furthering objectives covered by the enumerated powers.
Reasoning Wickard v. Filburn
The Court found that the Commerce Clause gives Congress the power to regulate prices in the industry, and this law was rationally related to that legitimate goal. The Court reasoned that Congress could regulate activity within a single state under the Commerce Clause, even if each individual activity had a trivial effect on interstate commerce, as long as the intrastate activity viewed in the aggregate would have a substantial effect on interstate commerce.
What did the state courts decide?McCulloch v Maryland
The state appeals court held that the Second Bank was unconstitutional because the Constitution did not provide a textual commitment for the federal government to charter a bank.
SCOTUS Ruling Watters v Wachovia Bank
Unanswered and no. The Court ruled 5-3 that state-chartered operating subsidiaries of national banks are subject to regulation by the federal Office of the Comptroller of Currency and not by the states in which they are located.
SCOTUS Ruling Gibbons v Ogden
Under the Constitution's Supremacy Clause, the New York monopoly was void because it conflicted with federal law
What happened? Watters v Wachovia Bank
When Michigan attempted to exercise its regulatory powers over Wachovia Mortgage, Wachovia Bank sued Watters, a Michigan official, seeking a judgment that Michigan's laws on operating subsidies of national banks were superceded by 12 U.S.C Section 484(a). Michigan argued that the OCC had exceeded the authority given it by Congress by extending the definition of "national bank" to cover state-registered operating subsidiaries. Michigan also argued that the extension of federal authority over state entities like Wachovia Mortgage violates the Tenth Amendment, which reserves to states all powers not delegated to the federal government. The District Court rejected these arguments and ruled for Wachovia, and the U.S. Court of Appeals for the Sixth Circuit affirmed. The Circuit Court found that the decision of the OCC to apply rules for national banks to their operating subsidiaries was a reasonable interpretation of Congress's intent, and therefore entitled to deference under Chevron U.S.A. v. Natural Resources Defense Council. The Sixth Circuit also held that Congress had the power to regulate operating subsidiaries of national banks under the Commerce Clause, so the Tenth Amendment did not reserve that power to the states.