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A.L. Schechter Poultry Corp. v. United States

Supreme Court of the United States · 1935 · Constitutional Law

Constitutional LawNondelegationCommerce ClauseNational Industrial Recovery ActLive Poultry Codenondelegation doctrinecommerce among the several statesdirect vs indirect effects

Facts

The defendants operated wholesale poultry slaughterhouse markets in Brooklyn, New York, buying live poultry mostly from commission men in New York after the poultry had arrived from other states. They slaughtered the poultry and sold it locally to retail dealers and butchers, and they did not sell poultry in interstate commerce. They were convicted under the Live Poultry Code, promulgated under section 3 of the National Industrial Recovery Act, for wage-and-hour violations and for local sales practices such as allowing customers to select individual chickens, selling an unfit chicken, making sales without required local inspection compliance, failing to make reports, and selling to unlicensed dealers. The Code also fixed wages, hours, labor rules, reporting requirements, and trade practice rules for the live poultry industry in the New York metropolitan area.

Issue

Whether section 3 of the National Industrial Recovery Act unconstitutionally delegated legislative power to the President by authorizing approval or prescription of codes of fair competition without adequate standards, and whether the challenged Code provisions could constitutionally be applied to defendants' intrastate slaughterhouse employment and local sales on the ground that they were transactions in or affecting interstate commerce.

Rule

Congress cannot abdicate or transfer its essential legislative function by authorizing others to make laws without prescribing adequate standards. Under the Commerce Clause, Congress may regulate intrastate activities only when they are in interstate commerce or have a direct, close, and substantial relation to interstate commerce; activities whose effect on interstate commerce is merely indirect remain within state control.

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Congress enacts the Industrial Stabilization Act, authorizing the President to approve or write "codes of fair dealing" for any trade whenever the President finds the code will promote economic recovery, protect workers, and serve the public interest. The Act adds only that no code may authorize monopolies or discriminate against small firms. Under that authority, the President adopts a code for neighborhood furniture retailers in Ohio fixing store hours, minimum pay, and reporting duties.

If a retailer prosecuted under the code challenges the statute, the strongest argument under the majority's reasoning is that the statute is unconstitutional because it

Explanation. The majority held Congress may seek administrative assistance, but it must itself lay down policies and establish standards. A statute that supplies only broad aims like recovery and public interest, plus minimal limits such as an anti-monopoly proviso, leaves the President with virtually unfettered lawmaking discretion and is an unconstitutional delegation.