Stafford v. Wallace

The federal Packers and Stockyards Act of 1921 sought to regulate meat packing and livestock dealing to prevent unfair, discriminatory, or deceptive practices that would burden the flow of livestock in interstate commerce and risk monopolies. The act authorized the secretary of agriculture, then Henry Wallace (defendant), to enact rules and regulations ensuring, among other things, that the charges in stockyards and all practices in connection with livestock passing through stockyards were reasonable, nondiscriminatory, and nondeceptive. Acting under that authority, Wallace proposed regulations that included rate schedules; mandatory reporting of daily receipts, sales, and shipments; and minimum standards for livestock care. Members of the Chicago Live Stock Exchange (plaintiffs) filed suit against Wallace in federal district court, challenging the act’s constitutionality to the extent it imposed federal regulation on stockyards and their dealers. They argued the act was not authorized under Congress’s Commerce Clause authority because the transactions at stockyards occurred wholly within the state in which the stockyard was located. Wallace countered that the act was a valid enactment under the Commerce Clause because the transactions at any given stockyard were part of a larger stream of interstate commerce. Specifically, they were an integral component in moving livestock from farms in the West and Southwest of the country to consumers or fattening farms in the Midwest or East of the country. The district court held in Wallace’s favor, and the United States Supreme Court granted review.