295 U.S. 495 (1935), 854, A. L. A. Schechter Poultry Corp. v. United States

Docket NºNo. 854
Citation295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570
Party NameA. L. A. Schechter Poultry Corp. v. United States
Case DateMay 27, 1935
CourtUnited States Supreme Court

Page 495

295 U.S. 495 (1935)

55 S.Ct. 837, 79 L.Ed. 1570

A. L. A. Schechter Poultry Corp.

v.

United States

No. 854

United States Supreme Court

May 27, 1935

Argued May 2, 3, 1935

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE SECOND CIRCUIT

Syllabus

1. Extraordinary conditions, such as an economic crisis, may call for extraordinary remedies, but they cannot create or enlarge constitutional power. P. 528.

2. Congress is not permitted by the Constitution to abdicate, or to transfer to others, the essential legislative functions with which it is vested. Art. I, § 1; Art. I, § 8, par. 18. Panama Refining Co. v. Ryan, 293 U.S. 388. P. 529.

3. 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. P. 530.

4. 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 (pp. 529 et seq.), 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 (pp. 542 et seq.).

5. 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

Page 496

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.

Held:

(1) The statutory plan is not simply one of voluntary effort; the "codes of fair competition" are meant to be codes of laws. P. 529.

(2) The meaning of the term "fair competition" (not expressly defined in the Act) is clearly not the mere antithesis of "unfair competition," as known to the common law, or of "unfair methods of competition" under the Federal Trade Commission Act. P. 531.

(3) In authorizing the President to approve codes which "will tend to effectuate the policy of this title," § 3 of the Act refers to the Declaration of Policy in § 1. The purposes declared in § 1 are all directed to the rehabilitation of industry and the industrial recovery which was the major policy of Congress in adopting the Act. P. 534.

(4) That this is the controlling purpose of the code now before the Court appears both from its repeated declarations to that effect and from the scope of its requirements. P. 536.

(5) The authority sought to be conferred by § 3 was not merely to deal with "unfair competitive practices" which offend against existing law, or to create administrative machinery for the application of established principles of law to particular instances of violation. Rather, the purpose is clearly disclosed to authorize new and controlling prohibitions through codes of laws which would embrace what the formulators would propose, and what the President

Page 497

would approve or prescribe, as wise and beneficent measures for the government of trades and industries, in order to bring about their rehabilitation, correction and improvement, according to the general declaration of policy in § 1. Codes of laws of this sort are styled " codes of fair competition." P. 535.

(6) A delegation of its legislative authority to trade or industrial associations, empowering them to enact laws for the rehabilitation and expansion of their trades or industries, would be utterly inconsistent with the constitutional prerogatives and duties of Congress. P. 537.

(7) Congress cannot delegate legislative power to the President to exercise an unfettered discretion to make whatever laws he thinks may be needed or advisable for the rehabilitation and expansion of trade and industry. P. 537.

(8) The only limits set by the Act to the President's discretion are that he shall find, first, that the association or group proposing a code imposes no inequitable restrictions on admission to membership and is truly representative; second, that the code is not designed to promote monopolies or to eliminate or oppress small enterprises and will not operate to discriminate against them, and third, that it "will tend to effectuate the policy of this title" -- this last being a mere statement of opinion. These are the only findings which Congress has made essential in order to put into operation a legislative code having the aims described in the "Declaration of Policy." P. 538.

(9) Under the Act, the President, in approving a code, may impose his own conditions, adding to or taking from what is proposed, as "in his discretion" he thinks necessary "to effectuate the policy" declared by the Act. He has no less liberty when he prescribes a code on his own motion or on complaint, and he is free to prescribe one if a code has not been approved. P. 538.

(10) The acts and reports of the administrative agencies which the President may create under the Act have no sanction beyond his will. Their recommendations and findings in no way limit the authority which § 3 undertakes to vest in him. And this authority relates to a host of different trades and industries, thus extending the President's discretion to all the varieties of laws which he may deem to be beneficial in dealing with the vast array of commercial activities throughout the country. P. 539.

(11) Such a sweeping delegation of legislative power finds no support in decisions of this Court defining and sustaining the

Page 498

powers granted to the Interstate Commerce Commission, to the Radio Commission, and to the President when acting under the "flexible tariff" provisions of the Tariff Act of 1922. P. 539.

(12) Section 3 of the Recovery Act is without precedent. It supplies no standards for any trade, industry or activity. It does not undertake to prescribe rules of conduct to be applied to particular states of fact determined by appropriate administrative procedure. Instead, it authorizes the making of codes to prescribe them. For that legislative undertaking, it sets up no standards, aside from the statement of the general aims of rehabilitation, correction and expansion found in § 1. In view of the broad scope of that declaration, and of the nature of the few restrictions that are imposed, the discretion of the President in approving or prescribing codes, and thus enacting laws for the government of trade and industry throughout the country, is virtually unfettered. The code-making authority thus sought to be conferred is an unconstitutional delegation of legislative power. P. 541.

6. Defendants were engaged in the business of slaughtering chickens and selling them to retailers. They bought their fowls from commission men in a market where most of the supply was shipped in from other States, transported them to their slaugterhouses, and there held them for slaughter and local sale to retail dealers and butchers, who in turn sold directly to consumers. They were indicted for disobeying the requirements of a "Code of Fair Competition for the Live Poultry Industry of the Metropolitan Area in and about the City of New York," approved by the President under § 3 of the National Industrial Recovery Act. The alleged violations were: failure to observe in their place of business provisions fixing minimum wages and maximum hours for employees; permitting customers to select individual chickens from particular coops and half-coops; sale of an unfit chicken; sales without compliance with municipal inspection regulations and to slaughterers and dealers not licensed under such regulations; making false reports, and failure to make reports relating to range of daily prices and volume of sales.

Held:

(1) When the poultry had reached the defendants' slaughterhouses, the interstate commerce had ended, and subsequent transactions in their business, including the matters charged in the indictment, were transactions in intrastate commerce. P. 542.

(2) Decisions which deal with a stream of interstate commerce -- where goods come to rest within a State temporarily and are later to go forward in interstate commerce -- and with the regulation

Page 499

of transactions involved in that practical continuity of movement, are inapplicable in this case. P. 543.

(3) The distinction between intrastate acts that directly affect interstate commerce, and therefore are subject to federal regulation, and those that affect it only indirectly, and therefore remain subject to the power of the States exclusively, is clear in principle, though the precise line can be drawn only as individual cases arise. Pp. 544, 546.

(4) If the commerce clause were...

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1438 practice notes
  • Representation-Case Procedures
    • United States
    • Federal Register December 15, 2014
    • December 15, 2014
    ...\649\ The phrase is best known for its articulation in A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 553 (1935) (Cardozo, J., (f) Due Process--Collectively, the Final Rule's revisions constitute an impermissible deprivation of what has traditionally been regarded as necessa......
  • Modernization of the Labeling and Advertising Regulations for Wine, Distilled Spirits, and Malt Beverages
    • United States
    • Federal Register November 26, 2018
    • November 26, 2018
    ...struck down the provisions of the National Industrial Recovery Act as unconstitutional. See Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935). After that decision, in order to provide for the orderly regulation of the alcohol beverage industry, Congress enacted the FAA Act in Au......
  • 635 F.Supp.2d 138 (N.D.N.Y. 2009), 1:09-CR-005 (NAM), United States v. Barner
    • United States
    • Federal Cases United States District Courts 2nd Circuit United States District Court of Northern District of New York
    • March 27, 2009
    ...the essential legislative functions with which it is vested. U.S. Const., Art. I, §§ 1, 8; see also Schechter Poultry Corp. v. U.S., 295 U.S. 495, 529, 55 S.Ct. 837, 79 L.Ed. 1570 (1935). However, " [t]he non-delegation doctrine does not keep Congress from obtaining the assistance of i......
  • Brackeen v. Haaland, 040621 FED5, 18-11479
    • United States
    • Federal Cases United States Courts of Appeals United States Court of Appeals (5th Circuit)
    • April 6, 2021
    ...v. Southard, 23 U.S. (10 Wheat.) 1, 42 (1825) (Marshall, C.J.)); see also A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 529 (1935) ("The Congress is not permitted to abdicate or to transfer to others the essential legislative functions with whi......
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1107 cases
  • 635 F.Supp.2d 138 (N.D.N.Y. 2009), 1:09-CR-005 (NAM), United States v. Barner
    • United States
    • Federal Cases United States District Courts 2nd Circuit United States District Court of Northern District of New York
    • March 27, 2009
    ...the essential legislative functions with which it is vested. U.S. Const., Art. I, §§ 1, 8; see also Schechter Poultry Corp. v. U.S., 295 U.S. 495, 529, 55 S.Ct. 837, 79 L.Ed. 1570 (1935). However, " [t]he non-delegation doctrine does not keep Congress from obtaining the assistance of i......
  • Brackeen v. Haaland, 040621 FED5, 18-11479
    • United States
    • Federal Cases United States Courts of Appeals United States Court of Appeals (5th Circuit)
    • April 6, 2021
    ...v. Southard, 23 U.S. (10 Wheat.) 1, 42 (1825) (Marshall, C.J.)); see also A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 529 (1935) ("The Congress is not permitted to abdicate or to transfer to others the essential legislative functions with whi......
  • Gun Owners of America, Inc. v. Garland, 032521 FED6, 19-1298
    • United States
    • Federal Cases United States Courts of Appeals United States Court of Appeals (6th Circuit)
    • March 25, 2021
    ...it is thus vested . . . if our constitutional system is to be maintained." A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 529-30 (1935) (quoting Pan. Ref. Co. v. Ryan, 293 U.S. 388, 421 Therefore, a court's deferring to an executive-branch agenc......
  • 425 P.2d 289 (Colo. 1967), 22244, Asphalt Paving Co. v. County Com'rs of Jefferson County
    • United States
    • Colorado Supreme Court of Colorado
    • March 27, 1967
    ...the Congress to delegate powers to the executive branch of government seem to exist. See A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570 (1935) and Panama Refining Co. v. Ryan, 293 U.S. 388, 55 S.Ct. 241, 79 L.Ed. 446 (1934). II. Does C.R.S.1963, 1......
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5 firm's commentaries
  • Supreme Court ruling confirming the constitutionality of the Patient Protection and Affordable Care Act
    • United States
    • JD Supra United States
    • June 28, 2010
    ...an “indirect” effect, and therefore not amenable tofederal control. See, e.g., A. L. A. Schechter Poultry Corp. v. United States, 295 U. S. 495, 548 (1935) (“[T]he dis-tinction between direct and indirect effects of intrastate transactions upon interstate commerce must be recognized as a fu......
  • The Employee Free Choice Act: A Critical Analysis
    • United States
    • JD Supra United States
    • July 1, 2008
    ...U.S. 394, 409 (1928)). 205 Id. (citing Panama Refining Co. v. Ryan, 293 U.S. 388 (1935); A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935)). 206 293 U.S. 388 (1935). 207 Id. at 406. Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=2f3f3f07-78e7-4e72-......
  • Second Circuit Affirms Constitutionality of Arms Export Control Act
    • United States
    • JD Supra United States
    • May 8, 2018
    ...as lacking an “intelligible principle” only twice throughout history. Slip Op. 12; see A.L.A Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935) (striking down delegation to industry associations comprised of private individuals to create legally binding codes of “fair competition......
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    • September 22, 2014
    ...Codes an unconstitutional delegation of legislative power in the “Sick Chicken Case.” See ALA Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935). But the securities industry worked to retain its self-regulatory regime, which resurfaced in the 1938 Maloney Act, creating ’34 Act § ......
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308 books & journal articles
4 provisions
  • Representation-Case Procedures
    • United States
    • Federal Register December 15, 2014
    • December 15, 2014
    ...\649\ The phrase is best known for its articulation in A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 553 (1935) (Cardozo, J., (f) Due Process--Collectively, the Final Rule's revisions constitute an impermissible deprivation of what has traditionally been regarded as necessa......
  • Modernization of the Labeling and Advertising Regulations for Wine, Distilled Spirits, and Malt Beverages
    • United States
    • Federal Register November 26, 2018
    • November 26, 2018
    ...struck down the provisions of the National Industrial Recovery Act as unconstitutional. See Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935). After that decision, in order to provide for the orderly regulation of the alcohol beverage industry, Congress enacted the FAA Act in Au......
  • Verification of Statements of Account Submitted by Cable Operators and Satellite Carriers
    • United States
    • Federal Register May 09, 2013
    • May 9, 2013
    ...AT&T cited two cases from the Great Depression, which are clearly distinguishable. In Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935) the Supreme Court held the National Industrial Recovery Act of 1933 to be unconstitutional, because it allowed poultry producers--rather th......
  • System for Regulating Market Dominant Rates and Classifications
    • United States
    • Federal Register December 11, 2017
    • December 11, 2017
    ...States, 488 U.S. 361, 371-79 (1989); Panama Ref. Co. v. Ryan, 293 U.S. 388, 430 (1935); A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 529-31 (1935)). --------------------------------------------------------------------------- MMA et al. assert that a broad interpretation of......

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