Legal Definitions - Schechter Poultry Corp. v. United States (1935)

The Supreme Court case of Schechter Poultry Corp. v. United States (1935) was a pivotal decision that significantly limited the power of the federal government, particularly in the context of President Franklin D. Roosevelt's New Deal legislation during the Great Depression. The case is often referred to as the "Sick Chicken Case."

At its core, the Court invalidated a key provision of the National Industrial Recovery Act (NIRA). This law authorized the President to approve "codes of fair competition" for various industries, including the poultry industry. These codes set rules for things like minimum wages, maximum work hours, prices, and collective bargaining, making them binding across entire industries.

The Supreme Court unanimously ruled that this provision was unconstitutional for two main reasons:

• Limits on the Commerce Clause: The Court found that the activities regulated by the NIRA codes, such as the local sale of poultry, were primarily intrastate (occurring entirely within a single state) and had only an indirect effect on interstate commerce (trade between states). The Constitution grants Congress the power to regulate interstate commerce, but the Court determined that NIRA overstepped this authority by attempting to control purely local business activities.
• The Nondelegation Doctrine: The Court also held that Congress had improperly delegated its legislative power to the President. By giving the President broad authority to approve "codes of fair competition" without providing clear standards or guidelines, Congress essentially allowed the Executive branch to create laws. The Court emphasized that Congress cannot give the President "unfettered discretion" to make whatever laws he thinks are necessary, as law-making power is reserved for the Legislative branch.

This decision was a significant check on federal power and intervention in the economy, reinforcing the separation of powers and defining the boundaries of Congress's authority under the Commerce Clause.

Examples Illustrating Schechter Poultry Corp. v. United States:

• Example 1 (Commerce Clause Limitation): Imagine a federal law passed today that attempts to regulate the specific pricing of coffee sold by small, independent coffee shops that operate in only one town within a single state. The law might argue that local coffee prices indirectly affect the national market for coffee beans or related products. However, similar to the Schechter ruling, a court could strike down this law. The Court would likely find that the pricing of coffee at a purely local shop is an intrastate activity with only an indirect effect on interstate commerce, thus exceeding Congress's power under the Commerce Clause, which is meant for regulating trade between states.

• Example 2 (Nondelegation Doctrine): Consider a hypothetical scenario where Congress passes a new "National Economic Revitalization Act" during a recession. A clause in this act states, "The Secretary of Commerce is hereby authorized to issue any regulations deemed necessary to promote economic growth and stability across all sectors of the economy." This provision would likely be challenged and struck down based on the Nondelegation Doctrine, as articulated in Schechter. Congress has given the Secretary of Commerce vast, "unfettered discretion" to create regulations without providing any specific standards, criteria, or guidelines for what constitutes "economic growth and stability" or how to achieve it. This effectively delegates Congress's law-making power to the Executive branch, which the Supreme Court found unconstitutional in Schechter.