Champion v. Ames

Champion argued that the carrying of lottery tickets from one state to another state by an express company engaged in carrying freight and packages from state to state, although the tickets may be contained in a box, did not constitute commerce among the states within the meaning of the Constitution. Article 1, section 8, clause 3 of the Constitution gives Congress the power "to regulate commerce with foreign nations, and among the several states, and with the Indian tribes."

The government argued that express companies, when in the business of transportation from one state to another, are instrumentalities of commerce among the states. The government also argued that carrying lottery tickets from one state to another is commerce which Congress may regulate and that Congress may make such an activity an offense.

Justice Harlan I, writing for the majority, defined commerce as "commercial intercourse between nations and parts of nations in all its branches." The word "among" in the Commerce Clause referred to those internal concerns that affect the states generally, but not to those which are completely within a particular state. The Court defined "power" as the power to regulate or to prescribe the rule by which commerce is to be governed. In Hanley v. Kansas City Southern R. Co. (1903) the Court said that transportation for others, as an independent business, is commerce, whether or not the goods are sold after delivery. Prior cases showed that commerce among the states embraced navigation, intercourse, communication, traffic, the transit of persons, and the transmission of messages by telegraph. The prior cases also showed that the power of Congress to regulate commerce was plenary, complete in itself, and could be exerted by Congress to its utmost extent, subject only to the limits the Constitution places on it. "In determining the character of the regulations to be adopted, Congress has a large discretion which is not to be controlled by the courts, simply because, in their opinion, such regulations may not be the best or most effective that could be employed."

It was argued that lottery tickets were not of any real value in themselves and therefore are not subjects of commerce. But the tickets had a monetary value in the market among those who chose to sell or buy lottery tickets. Therefore, because lottery tickets were subject to traffic, they were subjects of commerce. The regulation of the carriage of such tickets from state to state, at least by independent carriers, was a regulation of commerce among the several states.

Champion's counsel argued that the act did not in fact regulate the carrying of lottery tickets from state to state, but in effect prohibited such carrying, and Congress was given the authority to regulate, not to prohibit. The Court responded that the Constitution did not define a legitimate regulation of interstate commerce, but left to the discretion of Congress the means employed in executing that power. As long as the end was legitimate and within the scope of the Constitution, the means used were constitutional.

The Court noted that in determining whether regulation could sometimes take the form of prohibition, the nature of the interstate traffic could not be overlooked. In Phalen v. Virginia (1850) after observing that the suppression of nuisances injurious to public health or morality was among the most important duties of government, the Court said,

Experience has shown that the common forms of gambling are comparatively innocuous when placed in contrast with the widespread pestilence of lotteries . . . The latter infests the whole community; it enters every dwelling; it reaches every class; it preys upon the hard earnings of the poor; it plunders the ignorant and simple.

If a state considering suppressing lotteries could take into view the evils of lotteries, Congress, having the power to regulate commerce among the states, should be able to provide that such commerce is not polluted by the carrying of lottery tickets from one state to another. The only part of the Constitution that a person wanting to send lottery tickets from one state to another might invoke is that no person shall be deprived of liberty without due process of law. "But surely it will not be said to be a part of anyone's liberty . . . that he shall be allowed to introduce into commerce among the states an element that will be confessedly injurious to the public morals."

The Court noted that Congress, in passing the act, was only supplementing the action of states which, for the protection of the public morals, prohibit lotteries. The act said, in effect, that it would not permit the declared policy of the states, which sought to protect their people against the mischiefs of the lottery business, to be overthrown or disregarded by the agency of interstate commerce. "We should hesitate long before adjudging that an evil of such appalling character, carried on through interstate commerce, cannot be met and crushed by the only power competent to that end."

The Court stated that regulation may sometimes appropriately assume the form of prohibition. This had been illustrated by regulations regarding the transportation from one state to another of diseased cattle and liquor, and by the Sherman Anti-Trust Act, which prohibited unlawful restraints and monopolies. In Addyston Pipe & Steel Co. v. United States (1899), the Court said,

Under this grant of power to Congress that body . . . may enact such legislation as shall declare void and prohibit the performance of any contract between individuals or corporations where the natural and direct effect of such a contract will be . . . to directly . . . regulate to any substantial extent interstate commerce.

The Court did not agree that the constitutional guarantee of liberty to the individual to enter into private contracts limited the power of Congress and prevented it from legislating on the subject of such contracts. In fact, the Court felt the opposite was true, that the provision regarding the liberty of the citizen was to some extent limited by the Commerce Clause of the Constitution and that the power of Congress to regulate interstate commerce allowed Congress to prohibit citizens from entering into private contracts which regulate commerce among the states.