Reference no: EM133856601

Question

The Loan Protection Act (LPA) is a federal law passed by Congress in 1975 using its Commerce Clause power. The LPA states: "It is a federal crime to use violence against a person to collect payments on a loan." The LPA does not make any reference to loans made or violence used in interstate commerce. In passing the law, members of Congress explained that the law is intended to prohibit "loan-sharking," which is loaning money to someone at very high interest rates and often using violence to collect those debts, which is primarily committed by organized crime groups who operate in many states. Congress could not provide evidence that most loan-sharking is done by organized crime groups as opposed to local criminals. However, Congress did have hearings where experts testified that loan-sharking is a $6 billion a year industry, which has a significant effect on national productivity. Congress also used a "cost of crime" argument, claiming that violence in the collection of debts, even at a local level, is part of a "class of activities" that has a significant effect on interstate commerce.

Danny Davis is a member of a local gang in Los Angeles, CA. He loaned $1,000 to Paul Peters, a local restaurant owner, to help with his business expenses at a predatory 300% interest rate. When Peters told Davis that he could not afford to pay him back, Davis violently assaulted Peters, leaving him with significant injuries. Federal prosecutors charged Danny Davis with a violation of the LPA and he faces 20 years in federal prison. In federal court, Davis argues that Congress does not have the power under the Commerce Clause to pass the LPA and claims that the court should declare it unconstitutional.

What are Davis's strongest legal and factual arguments that Congress does not have the power under the Commerce Clause to pass the LPA?