SCHECHTER POULTRY CORP. V. UNITED STATES

A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 55 S. Ct. 837, 79 L. Ed. 1570 (1935), is one of the most famous cases from the Great Depression era. The case tested the legality of certain methods used by Congress and President franklin d. roosevelt to combat the devastating economic effects of the depression. After the U.S. Supreme Court declared the methods unconstitutional, Roosevelt publicly scolded the Court and later used the decision as one justification for a controversial plan to stock the Court with justices more receptive of Roosevelt's programs.

At the heart of the Schechter case was legislation passed by Congress in 1933. The national industrial recovery act (NIRA) (48 Stat. 195) was passed in response to the unemployment and poverty that swept the nation in the early 1930s and provided for the establishment of local codes for fair competition in industry. The codes were written by private trade and industrial groups. If the president approved the codes, they became law. Businesses were required to display a Blue Eagle insignia from the national recovery administration to signify their compliance with the codes. Typical local codes set minimum wages and maximum hours for workers and gave workers the right to organize into unions and engage in collective bargaining with management. Codes also prescribed fair trade practices, and many codes set minimum prices for the sale of goods.

The Schechter Poultry Corporation, owned and operated by Joseph, Martin, Alex, and Aaron Schechter, was in the business of selling chickens at wholesale. The corporation purchased some of the poultry from outside the state of New York. It bought the poultry at markets and railroad terminals in New York City and sold the poultry to retailers in the city and surrounding environs. In April 1934 President Roosevelt approved the code of fair competition for the live poultry industry of the New York City metropolitan area (Live Poultry Code). In July 1934 the Schechters were arrested and indicted on 60 counts of violating the Live Poultry Code. The indictment included charges that Schechter Poultry had failed to observe the minimum wage and maximum hour provisions applicable to workers and that it had violated a provision of the Live Poultry Code prohibiting the sale of unfit chickens. The case became popularly known as the Sick Chicken case.

The Schechters pleaded not guilty to the charges. At trial, the Schechters were convicted on 18 counts of violating the Live Poultry Code and two counts of conspiring to violate the Live Poultry Code. An appeals court affirmed their convictions, but the U.S. Supreme Court agreed to hear their appeal.

The Schechters presented several arguments challenging the Live Poultry Code. According to the Schechters, the code system of the NIRA was an unconstitutional abdication of the legislative power vested in Congress by Article I, Section 1, of the U.S. Constitution. The Schechters argued further that their intrastate wholesale business was not subject to congressional authority under the commerce clause of Article I, Section 8, Clause 3, of the Constitution and that the procedures for enforcing the NIRA codes violated the due process clause of the fifth amendment.

In support of the Live Poultry Code, the federal government argued that the code was necessary for the good of the nation. According to the government, the Live Poultry Code ensured the free flow of chickens in interstate commerce. This arrangement kept chicken prices low and helped ease, however slightly, the financial burden on the general public. The government also argued that it was within the power of Congress to enact the NIRA regulatory scheme that gave rise to the Live Poultry Code because codes such as the Live Poultry Code applied only to businesses engaged in interstate commerce.

The Court unanimously disagreed with the federal government. Under the Commerce Clause, Congress had the power to regulate commerce between the states, not intrastate commerce. The power to enact legislation on intrastate commerce was reserved to the states under the tenth amendment to the Constitution. According to the Court, the business conducted by the Schechters was decidedly intrastate. Their business was licensed in New York, they bought their poultry in New York, and they sold it to retailers in New York. Because it was intended to reach intrastate businesses like Schechter Poultry, the Live Poultry Code regulated intrastate commerce, and it was therefore an unconstitutional exercise of congressional power. The Court reversed the Schechters' convictions and declared the Live Poultry Code unconstitutional.

The Schechter decision was decided around the same time as other, similar Supreme Court decisions striking down federal attempts to address the economic crises of the depression. However, the Schechter decision was a particularly troublesome setback for the Roosevelt administration. The NIRA was the centerpiece of Roosevelt's plan to stabilize the national economy (the new deal), and the government's loss in the Sick Chicken case marked the end of the NIRA and its fair trade codes. Less than one week after the Schechter decision was announced, Roosevelt publicly condemned the Court. Roosevelt declared that the Court's "horse-and-buggy definition of interstate commerce" was an obstacle to national health.

Roosevelt's remarks were controversial because they appeared to cross the line that separated the powers of the executive branch from those of the judicial branch. They sparked a national debate on the definition of interstate commerce, the role of the U.S. Supreme Court, and the limits of federal power. Several citizens and federal legislators began to propose laws and constitutional amendments in an effort to change the makeup of the Supreme Court. At first, Roosevelt refused to back any of the plans, preferring instead to wait and see if the Court would reconsider its stand and reverse the Schechter holding. After the Supreme Court delivered another series of opinions in 1936 that nullified New Deal legislation, Roosevelt began to push for legislation that would modify the makeup of the Court. In 1937 the Supreme Court began to issue decisions upholding New Deal legislation. Congress never enacted Roosevelt's so-called court-packing plan.

further readings

Burns, James M. 1990. Crosswinds of Freedom: American Experience. New York: Knopf.

Cohen, William, and Jonathan D. Varat. 2001. Constitutional Law: Cases and Materials. 8th ed. New York: Foundation Press.

Louchheim, Katie, ed. 1983. The Making of the New Deal: The Insiders Speak. Cambridge, Mass.: Harvard.

Schlesinger, Arthur M., Jr. 2003. The Age of Roosevelt: The Coming of the New Deal. Boston: Houghton Mifflin.

cross-references

Federalism.

Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935), argued 2–3 May 1935, decided 27 May 1935 by vote of 9 to 0; Chief Justice Hughes for the Court. The National Industrial Recovery Act (NIRA), adopted by Congress on 16 June 1933, was the Roosevelt administration's first and major instrument for dealing with the Great Depression. Intended to curb unemployment and stimulate business recovery, the statute was wide ranging. But its principal reliance was upon codes of fair competition, which all industry groups were directed to draw up. Within two years more than 750 NIRA codes had been adopted, covering some twenty‐three million people. The act declared a national emergency and justified congressional action under the Commerce and General Welfare Clauses of the Constitution.

The codes had some positive effects in raising wages, banning unfair practices, and encouraging business morale. But they were hastily drawn, favored big businesses, and encouraged cartels. The drafting of the codes was done by industry groups, and the role of the president was simply to sign them.

The Department of Justice had recognized from the beginning that the regulatory program's constitutionality might well be difficult to establish before the Supreme Court and made a considerable effort to find an appropriate case to take up to the Court for review. These efforts failed, however, and the commercial activity involved in Schechter, considering the issues at stake, was absurdly minor. Certain Brooklyn slaughterhouse operators had been found guilty of violating the wage and hour provisions of their industry's code and, among other offenses, selling an “unfit chicken.” While the poultry was brought in from outside the state, the Schechters were only local operators selling in their immediate area.

The Supreme Court was unanimous in rejecting the government's case for the program. First, Chief Justice Charles Evans Hughes disposed of the contention that the legislation was justified by the national economic emergency. Although the Court had recently accepted the claim that the agricultural emergency had justified mortgage relief for Minnesota farmers in Home Building & Loan Assn. v. Blaisdell (1934), Hughes now held that “extraordinary conditions do not create or enlarge constitutional power” (p. 398).

Hughes's most telling argument, however, was that the statute had unconstitutionally delegated legislative power to the president. Only a few months earlier, in Panama Refining Co. v. Ryan (1935), the Court had declared unconstitutional another section of the NIRA that authorized the president to ban shipment in interstate commerce of oil produced in excess of state quotas. That decision was by vote of 8 to 1; Justice Benjamin N. *Cardozo, dissenting, contended that the law was justified by the economic emergency. But here the statute had given industry groups, with the cooperation of the president, authority to draft regulations covering the entire economic life of the country. “This,” said Cardozo, “is delegation run riot” (p. 553).

Hughes's third count against the statute was that the poultry code involved regulation of local transactions, not interstate commerce properly subject to congressional control. The Court had agreed in earlier cases that local commerce could be regulated by Congress if it had a “direct” effect upon interstate commerce. Though the distinction between “direct” and “indirect” effects had always been difficult to draw. Hughes believed that the difference was “clear in principle” and that the effects here were clearly “indirect.” Cardozo thought that the distinction was less clear but agreed that the connection of Schechter's business with interstate commerce was remote. If a local poultry dealer could be regarded as engaged in interstate commerce, then all limitations on congressional control would disappear.

By 1988 the Schechter decision had been cited in more than seventy Supreme Court cases, nearly always along with Panama Refining on the now discredited delegation issue. As Justice Byron R. White noted in Immigration and Naturalization Service v. Chadha (1983), “restrictions on the scope of the power that could be delegated [have] diminished and all but disappeared” (p. 985). The decision has retained more relevance for its interpretation of the commerce power.

President Franklin D. Roosevelt attacked the Court after the Schechter decision for its “horse and buggy” interpretation of the Constitution, but in fact the National Recovery Administration (NRA) program was collapsing, and the Supreme Court's unanimous ruling rescued the administration from an embarrassing failure. However, the lessons of the NRA were of value in the drafting of later New Deal measures such as the National Labor Relations Act and the Fair Labor Standards Act.

See also Administrative State; Capitalism.

C. Herman Pritchett

Schechter Poultry Corp. v. United States (1935). The National Industrial Recovery Act (NIRA), passed in 1933, was President Franklin Delano Roosevelt's major effort to combat the Great Depression. Among other things, the act authorized industry groups, operating through the National Recovery Administration (NRA), to establish codes of fair competition. These codes, subject to presidential approval, affected such matters as wages, hours, working conditions, and methods of competition.

The Schechter brothers, owners of a small Brooklyn slaughterhouse, were convicted of violating the Live Poultry Code on several counts, including selling diseased chicken and filing false sales and price reports. They appealed, and in a unanimous 1935 ruling, the Supreme Court declared the NIRA unconstitutional. Speaking for the Court, Chief Justice Charles Evans Hughes said that the law failed to provide adequate guidance concerning what matters the codes would cover. As a result, the NIRA unconstitutionally delegated legislative power to the executive branch. Hughes further argued that the poultry code violated the commerce clause of the Constitution (art. I, sec. 8). According to past cases, Congress could only regulate intrastate activity having a “direct” impact on interstate commerce. The Schechters' local commercial activity, Hughes noted, was clearly “indirect.” While Roosevelt accused the Supreme Court of possessing an anachronistic view of the Constitution, he was not sorry to see the unwieldy and unworkable NRA dismantled. Indeed, the Schechter decision prompted more careful drafting of New Deal legislation in the future. While this decision has not been explicitly overruled, later justices abandoned the nondelegation doctrine and the distinction between direct and indirect effects enunciated therein. Some scholars regarded this development as a necessary jurisprudential response to an increasingly complicated world. Others argued, however, that the Court has merely encouraged Congress to renounce its legislative duties.
See also Economic Regulation; New Deal Era, The.

Bibliography

Robert G. McCloskey , The American Supreme Court, 2d ed., 1994.

Jeffrey D. Hockett

SCHECHTER POULTRY CORPORATION V. UNITED STATES

SCHECHTER POULTRY CORPORATION V. UNITED STATES, 295 U.S. 495 (1935), unanimously held the National Industrial Recovery Act (NIRA) unconstitutional. With the NIRA, one of the two pillars of the early New Deal, Congress authorized codes of fair competition, cartel-like agreements among industrywide trade groups that set prices, regulated wages, controlled production, and apportioned markets under presidential authority.

Chief Justice Charles Evans Hughes, writing for the Court, rejected arguments based on Home Building and Loan Association v. Blaisdell (1934) that the Great Depression authorized emergency measures: "Extraordinary conditions do not create or enlarge constitutional power." Hughes held that the regulations involved in this case, the poultry code, involved local matters, not interstate commerce, relying on the direct and indirect impact distinction that supposedly apportioned the authority in the commerce clause and the Tenth Amendment. Finally, he wrote that Congress had excessively delegated its authority to the president and through him to private groups. "This is delegation running riot," wrote Justice Benjamin N. Cardozo, concurring.

Although the NIRA was collapsing under its own flaws, President Franklin D. Roosevelt denounced the result as throwing industrial America back into "the horse and buggy age." Within two years, the Court abandoned the direct and indirect criterion for measuring the regulatory authority of Congress. Similarly, the delegation issue seemed aberrational until it was revived in arguments in Browner v. American Trucking Association (2001).

BIBLIOGRAPHY

Cushman, Barry. Rethinking the New Deal Court: The Structure of a Constitutional Revolution. New York: Oxford University Press, 1998.

William M.Wiecek

See alsoGreat Depression ; Interstate Commerce Laws ; New Deal .

poultry Collective term for domestic fowl reared as a source of meat and eggs. Chickens are the most important domesticated bird in the world. They are the major source of eggs and an important meat source. These light-skeletoned birds have short, weak wings, strong legs, chin wattles and a head comb. Males are known as cocks; females as hens; and castrated males as capons. Some breeds, such as Rhode Island, Wyandotte and Plymouth Rock, are raised for meat and eggs. Others, such as White Plymouth Rock, Cornish and Rock Cornish, mainly supply meat. Species Gallus domesticus. Other forms of poultry are duck, goose, guinea fowl, and turkey.