Opinion ID: 1833239
Heading Depth: 1
Heading Rank: 2

Heading: The Aggregation Doctrine

Text: In addition to promulgating the substantial-effects test, the Wickard Court analyzed whether Mr. Filburn's activities were interstate or intrastate in nature, by estimating the impact that would occur on interstate commerce if a substantial number of people grew wheat for their own consumption. As discussed above, Congress, in the AAA, designated a class and found that the activities of this class had a substantial effect on interstate commerce. 7 U.S.C. § 1331. In the 1940s, that class was substantial, perhaps numbering in the millions. Because it was clear that the activities of Mr. Filburn alone were not sufficient to substantially affect interstate commerce, the Court reviewed Congress's quotas in the AAA and found that Congress had considered the aggregate effect of wheat production by all persons in Mr. Filburn's class to have a substantial effect on interstate commerce. The Court specifically stated: This record leaves us in no doubt that Congress may properly have considered that wheat consumed on the farm where grown if wholly outside the scheme of regulation would have a substantial effect in defeating and obstructing its purpose to stimulate trade therein at increased prices. Wickard v. Filburn, 317 U.S. 111, 128-29, 63 S.Ct. 82, 87 L.Ed. 122. Although the Wickard Court merely deferred to Congress's findings when it considered Mr. Filburn's intrastate activities in the aggregate, courts today exacerbate this error of aggregation and apply it in the context of the FAA. In the FAA, Congress did not identify a class that, in the aggregate, could have a substantial effect on interstate commerce, because Congress had no intent to regulate interstate commerce. [22] Rather, Congress stated very clearly that the FAA was a regulation of procedure in federal courts for cases concerning contracts involving interstate commerce. Therefore, in applying the FAA, courts attempt to determine on a case-bycase basis the class involved in the activity at issue, and to hypothesize as to whether this activity, if performed in some determinable aggregate, would have a substantial effect on interstate commerce. In applying the FAA, where Congress has made no findings and has delineated no class, such a procedure leads to inconsistent results among the courts. Courts today act as legislative bodies in applying federal regulation to an area that Congress never intended to regulate. Consider Mr. Filburn's situation in Wickard. Congress had made the legislative determination that certain activities in the aggregate affect interstate commerce. Once Congress passed the law establishing quotas, the courts were to apply that rule of law to the facts of particular cases. The courts only had to determine the amount of wheat a farmer had produced and then apply the AAA to his case. If he planted more than the law allowed, then he was guilty. The AAA did not leave trial courts in the position of attempting to determine on a case-by-case basis whether a farmer's conduct substantially affected interstate commerce. That was a question for Congress. A court could not possibly determine on its own whether a particular farmer's production substantially affected interstate commerce. A court is not designed, funded, or empowered to make that kind of legislative judgment. If the trial courts following the AAA had been placed in a position of deciding the effect on interstate commerce each case had, they could not have utilized the aggregate-effect doctrine, because no class would have been identified by Congress. They would have been trying to determine, case by case, the effect one farmer's activities had on interstate commercewhether it was substantial or not. Because Congress did not make findings when it enacted the FAA, in each case a court must now decide prospectively whether the transaction under consideration will substantially affect interstate commerce. Even Justice Breyer, in Lopez, recognized that Congress must make such an aggregate-effect determination because only by finding a significant factual connection, which he referred to as a rational basis, between the regulated activity and interstate commerce, could a substantial effect exist: [T]he Constitution requires us to judge the connection between a regulated activity and interstate commerce, not directly, but at one remove. Courts must give Congress a degree of leeway in determining the existence of a significant factual connection between the regulated activity and interstate commerce both because the Constitution delegates the commerce power directly to Congress and because the determination requires an empirical judgment of a kind that a legislature is more likely than a court to make with accuracy. The traditional words `rational basis' capture this leeway. Thus, the specific question before us, as the Court recognizes, is not whether the `regulated activities sufficiently affected interstate commerce' but, rather, whether Congress could have had `a rational basis ' for so concluding. Lopez, 514 U.S. at 616-17, 115 S.Ct. 1624 (Breyer, J., dissenting) (citations omitted). Although it erred in eliminating the distinctions between interstate and intrastate commerce, the United States Supreme Court in Wickard did exactly what Justice Breyer said was required in Lopez. It made a significant factual connection between the regulated activity and interstate commerce and formulated a rule therefrom. The United States Supreme Court recognized in Wickard the rationale used by Congress to regulate the activity in question. A court's role in cases arising under the FAA, however, is vastly different. Under the FAA, courts must make legislative-type judgments on a case-bycase basis. A review of the FAA and its legislative history makes it apparent that Congress never attempted to demonstrate a rational basis, as Justice Breyer in Lopez suggested was required, between interstate commerce and the regulation of contracts involving arbitration, nor did Congress determine a substantial effect such contracts have on interstate commerce. This is so, because Congress never intended to regulate interstate commerce at all. Although it is true that Congress made the observation that arbitration was an attractive alternative to some parties, it left open the choice whether to enter an agreement to arbitrate. The provisions of the FAA affect only those who would choose arbitration, and such a class is impossible to ascertain judicially. Each time a case arises under the FAA, a court attempts to determine if the individual contract or the transaction evidenced by a contract substantially affects interstate commerce. Such an analysis is an improper application of the aggregate-effects analysis. The Supreme Court in Lopez, Morrison, and Wickard was exercising its power to interpret statutes and to decide whether Congress's regulation of interstate commerce under Art. I, § 8, Cl. 3, was constitutional. In each case, the Court proceeded to examine the basis for the regulation at issue and to determine whether interstate commerce was affected. Courts cannot examine any rational basis for regulation under the FAA, because none was ever intended or stated by Congress, nor was a basis necessary, because Congress has the exclusive right to regulate procedure in federal courts, under Article III. To use a substantial-effects test to determine whether an activity is interstate in nature is meaningless and is an attempt by courts to legislate on a case-by-case basis in an area where Congress never intended to legislate. III. Application In the case now before this Court, Selma Medical Center, Inc., d/b/a Columbia Four Rivers Medical Center v. Dr. Wilfred Fontenot et al., the appellants argue that the contracts executed between the Hospital and the Physicians substantially affect interstate commerce. I have discussed at length the reasons why the FAA is a rule of procedure and the reasons why I find the substantial-effects test an inappropriate standard for a court to use to analyze the nature of one transaction. However, even if I evaluated the transactions now before us using the prevailing standards, I would find that these contracts do not require specific performance of the arbitration clause. The Hospital entered into contracts with the Physicians and with Selma Anesthesia and Pain Management; these contracts were executed in Alabama. The contracts, as drafted by the Hospital, contained provisions stipulating that the contracts would not become legally effective and binding until the Hospital had reviewed them. When the contracts became legally effective and binding, the Physicians were Alabama residents, Selma Anesthesia and Pain Management was an Alabama corporation, and the Hospital was an Alabama corporation. The contracts stipulated that the Physicians would provide anesthesiology services to the community, which was defined as Selma, Alabama. There is simply no evidence indicating that this transaction could have any substantial effect on interstate commerce. Because no evidence indicates that the transactions before us affect interstate commerce in any way, the prevailing standards would require this Court to consider those transactions in the aggregate. Because Congress has not designated a class or determined an effect of such contracts on the flow of commerce, such a consideration is inappropriate. Is there another group of doctors who have entered contracts with hospitals with which we can aggregate those contracts before us to show a substantial effect on interstate commerce? Perhaps all other doctors would choose contracts without arbitration. Could a court possibly determine a class to aggregate? Have goods crossed state lines to such a degree as to affect commerce with another state or other states? Have interstate carriers lost substantial business? The answer is obvious. There is no such evidence here. In fact, it is nearly impossible for any party to meet that burden. The real issue in this case is not whether the contracts substantially affect interstate commerce, because, as explained above, they do not; the real issue is how in our jurisprudence we have reached a point at which we could even believe that they ever could. Congress expanded its power beyond the bounds of the Commerce Clause, and the courts acquiesced to or approved of that usurpation of power. Now, the courts use the expanded Commerce Clause to enlarge their own power. The reality is that we have redefined words, ignored legislative intent, and contradicted reason and logicall to reach a desired result. I fear the precedent that we have established has resulted in a permanent confusion in law and a near elimination of any separation of federal and state powers. IV. Conclusion What Congress did not do in 1925, the courts of our land have done today. The courts have determined that the FAA is now a substantive rule which preempts state laws. This determination is explicitly contradicted by the plain language of the FAA and the language of its legislative history. Likewise, the courts now use the broadly redefined substantial-effects test to justify applying the FAA to contracts arising solely in intrastate commerce. The courts once applied the term substantial effect to determine the legitimacy of Congress's power to regulate intrastate activities that in the aggregate had a detrimental effect on interstate commerce. Today, courts misuse that term to classify intrastate activities as interstate commerce if any connection, no matter how remote, with another state exists. Courts make these decisions on a case-by-case basis, in the complete absence of any Congressional direction to do so. An aggregate effect on interstate commerce can never be shown by a single transaction, and the drafters of the FAA never intended for courts to go through the process of making case-by-case decisions regarding the effect of a single transaction on interstate commerce in the complete absence of supporting or relevant evidence. Words have meaning and should be construed by courts in the context in which they were used. When we change the meaning of words in our laws, we are the masters of intent and ours becomes a nation ruled by men instead of a nation ruled by laws. `I don't know what you mean by glory,' Alice said. Humpty Dumpty smiled contemptuously. `Of course you don'ttill I tell you. I meant there's a nice knock-down argument for you!' `But glory doesn't mean a nice knock-down argument,' Alice objected. `When I use a word,' Humpty Dumpty said in a rather scornful tone, `it means just what I choose it to meanneither more nor less.' `The question is,' said Alice, `whether you can make words mean different things.' `The question is,' said Humpty Dumpty, `which is to be masterthat's all.' Through the Looking-Glass and What Alice Found There by Lewis Carroll. Commerce Clause jurisprudence has expanded far beyond its intended boundaries. Courts have now assumed a role designated in our Constitution for Congress and have breached the fundamental separation of powers our forefathers intended to preserve. The necessity of reciprocal checks in the exercise of political power, by dividing and distributing it into different depositories and constituting each the guardian of the public weal against invasion by the other, has been evinced by experiments ancient and modern, some of them in our country and under our own eyes. To preserve them must be as necessary as to institute them. George Washington, Farewell Address, September 17, 1796. We have forgotten the glory of our law, and, as a judiciary, should be ashamed for our participation in the destruction of one of the basic premises upon which our Constitution was written, the federal separation of state and national powers. We have misused words, as Humpty Dumpty did, to have them mean only what we choose to have them mean, not what they were originally intended to mean. By doing so, we have become the master over the very Constitution we were sworn to uphold.