A.L.A. Schechter Poultry Corp. v. United States
295 U.S. 495, 55 S.Ct. 837, 79 L.Ed.1570 (1935)
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Rule of Law:
Congress cannot delegate its legislative power to the executive branch without providing clear and intelligible principles to guide the executive's discretion. Additionally, the Commerce Clause does not grant Congress the authority to regulate intrastate activities that have only an indirect effect on interstate commerce.
Facts:
- A. L. A. Schechter Poultry Corporation and Schechter Live Poultry Market ('the Schechters') operated wholesale poultry slaughterhouse markets in Brooklyn, New York.
- The Schechters purchased live poultry for slaughter and resale, with almost all of their poultry originating from out-of-state and purchased from commission men at New York City markets and terminals.
- After purchasing the poultry, the Schechters trucked it to their Brooklyn slaughterhouses.
- The Schechters then slaughtered the poultry and sold it exclusively to local retail poultry dealers and butchers in Brooklyn.
- The Schechters did not sell or ship any poultry in interstate commerce; all their sales were local.
- The Schechters were charged with violating provisions of the 'Live Poultry Code,' including those regulating employee wages and hours.
- They were also charged with violating a 'straight killing' provision, which required purchasers to buy entire coops or half-coops of poultry as-is, rather than selecting individual chickens.
Procedural Posture:
- The Schechters were indicted in the U.S. District Court for the Eastern District of New York for violating the Live Poultry Code.
- The trial court convicted the Schechters on nineteen counts.
- The Schechters, as appellants, appealed their conviction to the U.S. Circuit Court of Appeals for the Second Circuit.
- The Circuit Court of Appeals affirmed the convictions on most counts but reversed the convictions related to the Code's minimum wage and maximum hour provisions.
- Both the Schechters and the U.S. Government petitioned the Supreme Court of the United States for a writ of certiorari, which was granted.
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Issue:
Does the National Industrial Recovery Act, by authorizing the President to approve 'codes of fair competition' for various industries, constitute an unconstitutional delegation of legislative power and exceed Congress's authority under the Commerce Clause by regulating purely intrastate activities?
Opinions:
Majority - Chief Justice Hughes
Yes. The National Industrial Recovery Act is unconstitutional because it improperly delegates legislative power to the President and seeks to regulate intrastate commerce beyond the scope of federal authority. First, the Act constitutes an unconstitutional delegation of legislative power. Congress, which holds all legislative power, cannot transfer its essential functions to others. The Act provides no standards for the codes of 'fair competition' beyond the vague policy goals in Section 1, giving the President virtually unfettered discretion to create law. This is a standardless delegation, unlike permissible delegations where Congress provides an 'intelligible principle' for an agency to follow. Second, the Act's application to the Schechters' business exceeds the power of Congress under the Commerce Clause. The Schechters' activities were not 'in' the stream of interstate commerce, as the poultry had come to a permanent rest within New York once purchased. Furthermore, their activities did not 'directly affect' interstate commerce. The wages and hours of their local employees, or their local sales practices, have only an indirect effect on interstate commerce. To permit federal regulation of such indirect effects would effectively erase the distinction between national and state authority, giving the federal government unlimited power.
Concurring - Justice Cardozo
Yes. The Act's delegation of power is unconstitutional and its regulation of local wages and hours is not authorized by the Commerce Clause. The power delegated to the President is 'unconfined and vagrant,' a 'roving commission' to correct any perceived evils in industry. This is 'delegation running riot' because it goes beyond simply identifying and stopping recognized 'unfair methods of competition' and allows the President to create comprehensive industrial plans, a legislative function. Regarding the Commerce Clause, the connection between the Schechters' local business and the national economy is too remote. Activities that are local in their immediacy do not become national because of distant repercussions. To find a direct effect here is to find it almost everywhere, which would mean an end to our federal system of government.
Analysis:
This decision was a landmark ruling that invalidated a key piece of President Franklin D. Roosevelt's New Deal legislation, the National Industrial Recovery Act. It set a strong, albeit temporary, precedent for a narrow interpretation of the Commerce Clause, establishing a strict distinction between direct and indirect effects on interstate commerce. This 'direct effects' doctrine was later abandoned in favor of a much broader interpretation of federal power in cases like NLRB v. Jones & Laughlin Steel Corp. and Wickard v. Filburn. The case also represents the high-water mark of the non-delegation doctrine; while the doctrine remains theoretically valid, the Supreme Court has rarely since invalidated a statute on these grounds, typically finding that even broad statutory language provides a sufficient 'intelligible principle'.
