On May 27, 1935, the U.S. Supreme Court struck down an important part of President Franklin Roosevelt’s NIRA plan, when the Court invalidated poultry industry regulations. Show  The Court’s decision in Schechter Poultry Corp. v. United States invalidated a key part of the National Industrial Recovery Act, or NIRA, one of the projects passed during FDR’s 100-day program in 1933. The NIRA had two key components: an industrial recovery program that included a wave of regulations seeking to foster “fair competition,” and a huge public works program. The National Recovery Agency, or NRA, was created to implement the NIRA, and it established a series of codes and rules for businesses as part of the “fair competition” experiment. The administration asked businesses to display the blue eagle logo, an emblem signifying NRA participation, as an act of patriotism. But to many people, the program was more like an albatross. The NIRA and NRA weren’t expected to be renewed by Congress, which received many complaints about the excessively detailed program. One problem was that the NIRA didn’t have widespread support in the Senate, even though it passed the NIRA as part of a recovery effort during the Great Depression. (Among the act’s critics in the Senate was Hugo Black, who Roosevelt would nominate to the Supreme Court two years later.) The overly ambitious NIRA had something to anger most business and societal interests. It allowed for the suspension of antitrust laws and forced certain industries to align. Its fair-competition codes allowed for price and wage fixing. The NIRA also called for industries to regulate themselves even as it required those industries to agree to follow many codes which were to be vetted at public hearings. And even though the NIRA encouraged the unionization of workers to seek better conditions, the efforts to form unions became disorganized. The NRA as an agency had the power to push for voluntary agreements about work conditions and fixed prices, drawing up more than 500 fair practice codes for industries. In 1934, one of these codes established competitive rules for the live poultry industry in New York City. The Schechter brothers faced 60 charges of violating the “Live Poultry Code,” including offering unfit chickens for sale and not offering a minimum wage to workers. The brothers were found guilty on 20 counts in what became known as the “Sick Chicken” case. The brothers lost their first appeal but pursued the case to the Supreme Court, where the Justices ruled in favor of the Schechters and invalidated the part of the NIRA that allowed the executive branch to establish codes to regulate industries. Writing for a unanimous court in Schechter Poultry Corp. v. United States, Chief Justice Charles Evans Hughes invalidated the poultry industry regulations as an unconstitutional use of Congress’s Commerce Clause powers, because the chickens at issue were only being sold to intra-state buyers. The Court also struck down the NIRA as an unconstitutional delegation of Congress’s powers to the executive branch, under what is known as the “non-delegation doctrine.” The Court said the NIRA gave the Roosevelt administration too much power to control the economy through the use of the fair practice codes. Within a week, President Roosevelt criticized the justices at a press conference, starting a very public feud with the Court that lasted for several years. “You see the implications of the decision. That is why I say it is one of the most important decisions ever rendered in this country,” Roosevelt told reporters on May 31, 1935. “We have been relegated to the horse-and-buggy definition of interstate commerce.”
After the fights between Roosevelt and the Court simmered down, key labor protections that came out of the NIRA survived as laws passed later in the decade, including the Fair Labor Standards Act of 1938.
A.L.A. Schechter Poultry Corp. v. United States is a case decided on May 27, 1935, by the United States Supreme Court in which the court invalidated Section 3 of the National Industrial Recovery Act of 1933 (NIRA) in violation of the nondelegation doctrine. Schechter—along with Panama Refining Co. v. Ryan— is one of two cases in which the United States Supreme Court has struck down legislation on nondelegation grounds. The case concerned Congress' delegation of legislative power to the executive branch to administer NIRA as well as the federal government's power to oversee intrastate commerce.[1]
HIGHLIGHTS Why it matters: The Supreme Court struck down Section 3 of NIRA, a major component of the New Deal. The decision also clarified the boundaries governing the delegation of Congressional power, reiterating the intelligible principle requirement from J.W. Hampton Jr. & Company v. United States (1928) and the further limits set by Panama Refining Co. v. Ryan (1935).[2] It also set a narrower definition of interstate commerce, holding that if any business using components shipped in from other states qualified as interstate, then "there would be virtually no limit to the federal power," so the concept applied only to the actual flow of goods between states. The internal policies and practices of local companies using components from other states thus fell under intrastate commerce and outside the jurisdiction of the federal government.[1] BackgroundNational Industrial Recovery ActThe National Industrial Recovery Act of 1933 (NIRA) aimed to alter the government's approach to regulating business. NIRA authorized the National Recovery Administration to create industry-wide "codes of fair competition," with input from both businesses and labor unions, to replace existing antitrust laws.[3] Schechter challenge to NIRAUnder NIRA, the National Recovery Administration formulated the "Code of Fair Competition for the Live Poultry Industry of the Metropolitan Area in and about the City of New York" (the Live Poultry Code), which set rules for the poultry industry regarding hours, wages, health and safety, and other practices. Schechter Poultry Corporation was charged and convicted of 19 code violations by the United States District Court for the Eastern District of New York. Schechter appealed the district court's decision, but the United States Court of Appeals for the 2nd Circuit sustained all but two of the convictions.[1] Schechter petitioned the United States Supreme Court, arguing that NIRA violated the nondelegation doctrine by unlawfully delegating legislative authority to the National Recovery Administration. Schechter also claimed that the Live Poultry Code was unconstitutional in violation of the Tenth Amendment because the federal government had no authority to regulate intrastate commerce. Lastly, Schechter contended that NIRA violated the due process clause of the Fifth Amendment.[1] Oral argumentOral arguments were held on May 2 & 3, 1935. The case was decided on May 27, 1935.[4] DecisionThe Supreme Court ruled 9-0 that Section 3 of NIRA violated Article I and the Tenth Amendment. Chief Justice Charles E. Hughes wrote the majority opinion, and he was joined by Justices Willis Van Devanter, James Clark McReynolds, George Sutherland, Louis Brandeis, Pierce Butler, and Owen Roberts. Justice Benjamin Cardozo wrote a concurring opinion and was joined by Justice Harlan Fiske Stone. OpinionsOpinion of the courtThe United States Supreme Court ruled unanimously in favor of Schechter, holding that Section 3 of NIRA violated Article I of the U.S. Constitution by delegating legislative power to the executive branch without first establishing an intelligent principle—effectively allowing the president "to exercise an unfettered discretion to make whatever laws he thinks may be needed." In particular, NIRA authorized the National Recovery Administration to create industry-wide codes of fair competition but failed to define the parameters of fair and unfair competition. The absence of these definitions played a significant part in the majority opinion's argument that NIRA represented an unconstitutional delegation of congressional power.[1][3] The court also held that Section 3 of NIRA violated the Tenth Amendment, though it declined to rule on the Fifth Amendment question. In the case opinion, Chief Justice Charles E. Hughes stated that although NIRA claimed the authority to regulate such wide-ranging issues as hours, wages, and sales procedures as part of the federal government's authority over interstate commerce, many of these practices took place within states outside of federal jurisdiction. Panama Refining Company v. RyanThe Schechter decision cited precedent from Panama Refining Co. v. Ryan (1935), an earlier case that also challenged provisions of NIRA on nondelegation grounds. In Panama, the United States Supreme Court struck down section 9(c) of NIRA, which authorized the president to ban the interstate sale of excess petroleum and delegated rulemaking authority to administer the provision to the secretary of the Department of the Interior.[5] The court held that while Article I of the U.S. Constitution did not prevent Congress from delegating rulemaking authority to administrative agencies, there were clear constitutional limitations on that authority.[1][3] Concurring opinionsJustice Benjamin Cardozo concurred with the court's judgment but argued that because of its attempt to regulate intrastate matters such as hours and wages, even Congress did not have sufficient authority to enforce the Live Poultry Code:
Text of the opinionImpactSchechter Poultry v. United States was one of the major cases in the development of the nondelegation doctrine, the body of jurisprudence governing when and how Congress may delegate its power to other parts of the government. The New Deal involved significant changes to the structure and operation of the Executive Branch, so the court cases of the late 1930s did much to clarify how these changes would be implemented. In his majority opinion, Chief Justice Hughes set forth a comparatively narrow vision of interstate commerce:
The federal government's power to regulate interstate commerce stems from the Commerce Clause in Article I, Section 8 of the U.S. Constitution and has been used to justify many legislative and regulatory actions.[7] The Schechter ruling was part of a series of judicial setbacks to Franklin Roosevelt's New Deal agenda that may have inspired his attempt to pass the Judicial Procedures Reform Bill of 1937. The bill would have empowered the president to appoint a new Supreme Court justice for every existing one over the age of 70, which would have given Roosevelt six new appointments upon its passing.[8] The bill did not pass, though some scholars, including Douglas Linder of the University of Missouri-Kansas City, argue that it influenced the behavior of the court in subsequent cases related to other New Deal programs.[7]
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What was the result of Schechter v United States?
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