469 U.S. 528 (1985), argued 19 Mar. 1984, reargued 1 Oct. 1984, decided 19 Feb. 1985 by vote of 5 to 4; Blackmun for the Court, joined by Brennan, White, Marshall, and Stevens; Powell in dissent, joined by Burger, Rehnquist, and O’Connor; Rehnquist filed a separate dissent; O’Connor filed a separate dissent, joined by Powell and Rehnquist.
Garcia reversed the Supreme Court's 1976 decision in National League of Cities v. Usery. That decision had restricted Congress's power to regulate the states “as states”; Garcia removed virtually all federalism-based constitutional limitations on congressional power under the Commerce Clause.
Garcia involved the application of the maximum hours and minimum wage provisions of the Fair Labor Standards Act to a city-owned and -operated public transportation system. Under the rule established in National League of Cities, as summarized by the Court in Hodel v. Virginia Surface Mining and Reclamation Association (1981), the economic activities of the states or of their political subdivisions could be regulated by Congress only if four tests were met. First, the statute at issue had to regulate the states “as States.” Second, the statute must address “matters that are indisputably attribute[s] of state sovereignty”; third, such regulation must “directly impair” the states’ ability to “structure integral operations in areas of traditional governmental functions.” Finally, “the nature of the federal interest” must be substantial enough to “justify state submission” (p. 264). Despite a number of attempts to clarify the meaning of these tests, no clear lines had been established at the time of Garcia.
On the surface, Garcia seemed to present the question of whether operating a municipal transportation system was a “traditional” or “essential” state function under the National League of Cities rule, and whether the federal regulation of such a system interfered with an attribute of state sovereignty. In previous cases, federal courts had held that licensing ambulance drivers, operating a municipal airport, and disposing of solid wastes were protected from federal regulation under National League of Cities, while regulating traffic on public roads, operating a mental health facility, and providing in-house domestic services for the aged and handicapped were not protected. Instead of making such a determination in Garcia, Justice Harry Blackmun gave up, and overruled National League of Cities altogether.
Blackmun's frustration with the Court's inability to arrive at meaningful and clear distinctions under the National League of Cities precedent is evident throughout his opinion. The distinctions drawn in prior cases, he declared, were “elusive at best”; such distinctions were “unworkable,” “illusory,” and not susceptible to “reasonably objective” measurement. The emphasis on traditional governmental functions, moreover, was unfairly biased against state activities that were innovative or unorthodox.
Rejecting all such attempts, Blackmun held that the protection of the states’ interests in the federal system was left not to the courts but to the other institutions of government, particularly Congress. “The structure of the Federal Government itself was relied on to insulate the interests of the States,” he wrote (p. 551). “The Framers chose to rely on a federal system in which special restraints on federal power over the States inhered principally in the workings of the National Government itself, rather than in discrete limitations on the objects of federal authority” (p. 552). Specifically, Blackmun cited the representation of the states in the Senate, and noted the many federal laws that operated to the benefit of the states.