HEART OF ATLANTA MOTEL, INC., v. UNITED STATES et al. No. 515.

1. Issue The issue is whether Congress exceeds its powers under the Commerce Clause by requiring the motel to serve customers without regard for race or color, to the degree that it deprives the motel’s owners’ the right to choose customers and operate its businesses as it wishes, which results in an improper taking of its liberty and property without due process under the Fifth Amendment, and subjects it to involuntary servitude, violating the Thirteenth Amendment.

2. Rule o Article 1, Section 8 of the Constitution, also known as the Commerce Clause, states that “The Congress shall have Power . . . To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” In analyzing whether a law violates the Commerce Clause, the Court considers “whether the activity sought to be regulated is ‘commerce which concerns more States than one’ and has a real and substantial relation to the national interest.” Specific to the 5th Amendment and the takings clause, the Court must determine (1) whether Congress had a rational basis for finding that racial discrimination by motels affected commerce, and (2) if it had such a basis, whether the means it selected to eliminate that evil are reasonable and appropriate. o Title II of the Civil Rights Act of 1964, sections 201(a), (b)(1), and (c)(1) prohibits discrimination on the basis of race or color in the availability of the goods, services, or facilities offered by a business to the general public.

3. Background and Facts o In 1964, Congress passed the Civil Rights Act (the “Act”), which aimed to prohibit discrimination based on race, religion, color, or national origin to goods and services. o That same year, the Heart of Atlanta Motel, an Atlanta, GA-based motel that was readily accessible to interstate highways 75 and 85 and state highways 23 and 41, filed a declaratory action attacking the constitutionality of the Act, claiming that, by requiring the Motel to rent rooms to African Americans (AAs) under the Commerce Clause (CC), the Act violated the Fifth and Thirteenth Amendments to the Constitution. o The District Court upheld the constitutionality of the Act, and the Motel appealed.

4. Influence o The practice of banking in legal cannabis o The sales of legal cannabis have been heavily influenced by the holding

5. Application & Analysis o The Motel argues that the operation of the motel was “purely local” and does not affect interstate commerce, ultimately contending that in passing the Act, Congress exceeds its powers to regulate commerce. o The US argues that the unavailability to AAs of adequate accommodations significantly interferes with interstate travel, and that Congress has the power to regulate commerce among the states under the Commerce Clause of the US constitution by removing such restraints. o The SCOTUS disagreed with the Motel’s claim, finding that the Motel’s activity fell squarely within Congress’ power to regulate under the CC. The Motel had admitted that: over 75% of its customers were from out of state, it was right next to several interstate highways, and that it advertised nationally. The Court found that these actions brought the Motel into the stream of commerce such that its actions have a “real and substantial relation to the national interest.” Racial discrimination by motels serving travelers, however “local” their operations may appear, have a substantial and harmful effect upon that commerce. The Court also summarily dismissed the Motel’s claim under the 13th Amendment as “frivolous.”

6. Conclusion o The regulation of the Motel who admittedly serves interstate travelers through commercial engagement, by Congress, is within the power granted by the CC of the Constitution. o Under the rule of Article 1, Section 8 of the Constitution, the Motel engaged in interstate commerce, thus falling within the scope of Congress’ regulatory authority. Since the Motel falls within the power granted to Congress, it did not have the right to discriminate on the basis of race or color in the availability of the goods, services, or facilities it offered to the general public due to the passing of the Act.

7. Importance This decision applies to any business professional who might think that their operations are considered “local” and out of the reach of Congress, when in fact they aren’t, subjecting them to the broad and powerful reach of Federal law. For example, a cannabis producer operating in a state where cannabis is legal should know the intricacies of the CC well, or at least have a lawyer that does, because the scope of their operation could have a significant effect on interstate commerce.

8. Impact o Gonzalez v. Raich (2005) - the court held that Congress could criminalize the production and use of cannabis even in states where it was legal for medicinal use. The court held that congress could regulate intrastate activity where the aggregate behavior could potentially impact interstate commerce. In Perez v. US, Congress held that Title II of the Consumer Credit Protection Act was within Congress’ power under the CC, and that loan sharks who use extortionate means to collect payments on loans have a significant effect on interstate commerce. o Perez v. US (1971) - Congress held that Title II of the Consumer Credit Protection Act was within Congress’ power under the CC, and that loan sharks who use extortionate means to collect payments on loans have a significant effect on interstate commerce.