Schechter Poultry Corp. v. United States (1935)

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Schechter Poultry Corp. v. United States, 295 U.S. 495, is a Supreme Court case that invalidated a provision of the National Industrial Recovery Act (NIRA) that authorized the President to approve “codes of fair competition” for the poultry industry and other industries, and deemed it as unconstitutional. These codes regulated schedules of minimum wages, prices, maximum work hours, collective bargaining, and other rules that would be binding upon entire industries.

Drawing upon the Nondelegation Doctrine and the Commerce Clause of the Constitution, the Court struck down this piece of President Franklin Roosevelt’s New Deal legislation. First, the Court characterized this activity as intrastate transactions with effects that were only indirect in the sphere of interstate commerceTherefore, Congress had overstepped its bounds by regulating local commercial activity. Second, by giving the Agency for Industrial Recovery a broad mandate to ensure “fair competition” Congress had effectively delegated legislative power to the Executive. The Court held that “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 rehabilitation and expansion of trade or industry.” The Court found an absence of standards and procedures in the statute to guide the President in deciding which regulations to impose upon various industries.

[Last updated in March of 2022 by the Wex Definitions Team]