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  • ALA Schechter Poultry Corporation V US

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    The Supreme Court held that the Live Poultry Code promulgated under the National Industrial Recovery Act was an unconstitutional delegation of legislative power. Specifically, the Court found that: 1) the Act delegated lawmaking authority to private groups rather than the President; 2) the delegation covered every sector of the economy without limitation; and 3) the Act lacked standards to guide the President's approval of codes. The Court concluded that Congress cannot abdicate or transfer its essential legislative functions and must establish policies and standards to guide any delegation of power.

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    The Supreme Court held that the Live Poultry Code promulgated under the National Industrial Recovery Act was an unconstitutional delegation of legislative power. Specifically, the Court found that: 1) the Act delegated lawmaking authority to private groups rather than the President; 2) the delegation covered every sector of the economy without limitation; and 3) the Act lacked standards to guide the President's approval of codes. The Court concluded that Congress cannot abdicate or transfer its essential legislative functions and must establish policies and standards to guide any delegation of power.

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    194 views1 page

    ALA Schechter Poultry Corporation V US

    Uploaded by

    CJ Millena
    The Supreme Court held that the Live Poultry Code promulgated under the National Industrial Recovery Act was an unconstitutional delegation of legislative power. Specifically, the Court found that: 1) the Act delegated lawmaking authority to private groups rather than the President; 2) the delegation covered every sector of the economy without limitation; and 3) the Act lacked standards to guide the President's approval of codes. The Court concluded that Congress cannot abdicate or transfer its essential legislative functions and must establish policies and standards to guide any delegation of power.

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    of 1

    A. L. A. SCHECHTER POULTRY CORP.

    V UNITED STATES
    295 U.S. 495
    SUPREME COURT OF THE UNITED STATES ; May 27, 1935

    FACTS
    - Schechter was found to have violated the “Live Poultry Code” promulgated under NIRA (National Industrial
    Recovery Act) but written by industry groups then approved by the President through the Ag Sec’y. NIRA gave
    President the authority to approve “codes of fair competition” applied by a trade or industrial group.
    - Section 3 of the National Industrial Recovery Act provides that "codes of fair competition," which shall be the "
    standards of fair competition" for the trades and industries to which they relate, may be approved by the President
    upon application of representative associations of the trades or industries to be affected, or may be prescribed by him
    on his own motion. Their provisions [p496] are to be enforced by injunctions from the federal courts, and "any
    violation of any of their provisions in any transaction in or affecting interstate commerce" is to be deemed an unfair
    method of competition within the meaning of the Federal Trade Commission Act, and is to be punished as a crime
    against the United States. Before approving, the President is to make certain findings as to the character of the
    association presenting the code and absence of design to promote monopoly or oppress small enterprises, and must
    find that it will "tend to effectuate the policy of this title." Codes permitting monopolies or monopolistic practices are
    forbidden. The President may "impose such conditions (including requirements for the making of reports and the
    keeping of accounts) for the protection of consumers, competitors, employees and others, and in the furtherance of
    the public interest, and may provide such exceptions and exemptions from the provisions of such code," as he, in his
    discretion, deems necessary "to effectuate the policy herein declared." A code prescribed by him is to have the same
    effect as one approved on application.
    ISSUE
    WON the Live Poultry Code is unconstitutional for being an undue delegation of legislative powers. (YES.)

    HELD
    RATIO: Congress is not permitted by the Constitution to abdicate, or to transfer to others, the essential legislative
    functions with which it is vested. Congress may leave to selected instrumentalities the making of subordinate rules
    within prescribed limits, and the determination of facts to which the policy, as declared by Congress, is to apply; but it
    must itself lay down the policies and establish standards.
    REASONING:
    - The delegation of legislative power sought to be made to the President by § 3 of the National Industrial Recovery
    Act of June 16, 1933, is unconstitutional and the Act is also unconstitutional, as applied in this case, because it
    exceeds the power of Congress to regulate interstate commerce and invades the power reserved exclusively to the
    States
    - This code was found to be an unconstitutional delegation of legislative power because:
    1) private groups were given lawmaking function and discretion to make the policies. Authority wasn’t really
    delegated to the President.
    2) It covered every sector of the economy (not like the FCC, which just deals with communications). It was an
    overbroad delegation of authority. There was no limitation on things that could be subject to the “codes of fair
    competition.”
    3) no formal procedures constraining the President when he decides to approve/disapprove the codes. No
    deliberation was required in acting to promulgate the codes.
    - Furthermore, there were no statutory standards or procedural safeguards for promulgating the codes.
    + Cardozo wrote a strong concurrence saying that this was a situation of “delegation run riot”, that although Congress
    delegating power to executive can sometimes be ok, congress delegating power to industrial or trade associations
    was out of the question.

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