Section 3 of the National Industrial Recovery Act was an unconstitutional delegation of legislative power to the Executive, and was not a valid exercise of congressional Commerce Clause power. United States Court of Appeals for the Second Circuit affirmed in part and reversed in part.
The regulations at issue were promulgated under the authority of the National Industrial Recovery Act (NIRA) of 1933. These included price and wage fixing, as well as requirements regarding the sale of whole chickens, including unhealthy ones. The government claimed the Schechter brothers sold sick poultry, which has led to the case becoming known as "the sick chicken case".[2] Also encompassed in the decision were NIRA provisions regarding maximum work hours and a right of unions to organize. The ruling was one of a series which overturned elements of President Franklin D. Roosevelt's New Deal legislation between January 1935 and January 1936, until the Court's intolerance of economic regulations shifted with West Coast Hotel Co. v. Parrish.[3] The National Industrial Recovery Act allowed local codes for trade to be written by private trade and industrial groups. The President could choose to give some codes the force of law. The Supreme Court's opposition to an active federal interference in the local economy caused Roosevelt to attempt to pack the Court with judges who were in favor of the New Deal.
There were originally 60 charges against Schechter Poultry, which were reduced to 18 charges plus charges of conspiracy by the time the case was heard by the U.S. Supreme Court.
Among the 18 charges against Schechter Poultry were "the sale to a butcher of an unfit chicken" and the sale of two uninspected chickens.
Ten charges were for violating codes requiring "straight killing". Straight killing prohibited customers from selecting the chickens they wanted; instead a customer had to place his hand in the coop and select the first chicken that came to hand. There was laughter during oral arguments when Justice George Sutherland asked, "Well suppose however that all the chickens have gone over to one end of the coop?"[4]
The Schechter brothers were Jewish (the surname Schechter means "slaughter" in Yiddish, and specifically refers to a ritual slaughterer[5]). According to the trial record, at least some of their customers preferred to select individual chickens, believing that this made it easier to have their rabbicertify the chicken as kosher, though this may not have been a universal belief. The Supreme Court decision did not address any issue of religious liberty, however.
The Court distinguished between direct effects on interstate commerce, which Congress could lawfully regulate, and indirect effects, which were purely matters of state law. Though the raising and sale of poultry was an interstate industry, the Court found that the "stream of interstate commerce" had stopped in this case–Schechter's slaughterhouse's chickens were sold exclusively to in-state buyers.[7] Any interstate effect of Schechter was indirect, and therefore beyond federal reach.
Though many considered the NIRA a "dead statute" at this point in the New Deal scheme, the Court used its invalidation as an opportunity to affirm constitutional limits on congressional power, for fear that it could otherwise reach virtually anything that could be said to "affect" interstate commerce and intrude on many areas of legitimate state power. The court ruled that the law violated the Tenth Amendment. According to Supreme Court historian David P. Currie, the court believed that "to permit Congress to regulate the wages and hours in a tiny slaughterhouse because of remote effects on interstate commerce would leave nothing for the tenth amendment to reserve." Currie added that "it can hardly have escaped the Justices that apart from its limitation to business there was little to distinguish what Congress had attempted from the 1933 legislation authorizing Adolf Hitler to govern Germany by decree ... the delegation decision in Schechter was a salutary reminder of the Framers' decision to vest legislative power in a representative assembly."[8]
Justice Benjamin Cardozo's concurring opinion clarified that a spectrum approach to direct and indirect effects is preferable to a strict dichotomy.[9] Cardozo felt that in this case, Schechter was simply too small a player to be relevant to interstate commerce.
This traditional reading of the Commerce Clause was later disavowed by the Court, which after threats from Roosevelt, began to read congressional power more expansively in this area, in cases such as NLRB v. Jones & Laughlin Steel Corp (1937).[10] However, more recent cases such as United States v. Lopez (1995)[11] perhaps signal a growing inclination in the Court to once again affirm limits on its scope. In a unanimous 2011 decision, Bond v. United States, the Supreme Court cited Schechter as a precedent.[12]
Significance
Speaking to aides of Roosevelt, Justice Louis Brandeis remarked that, "This is the end of this business of centralization, and I want you to go back and tell the president that we're not going to let this government centralize everything."[13]
In Hyde Park, New York, a few days after the decision, Roosevelt denounced the decision as an antiquated interpretation of the Commerce Clause.[14]
After the decision was announced, newspapers reported that 500 cases of NIRA code violations were going to be dropped.[15]
↑ Epstein, Lee J.; Walker, Thomas G. (February 20, 2019). Constitutional Law for a Changing America: Institutional Powers and Constraints (10thed.). Washington DC: CQ Press Sage Publications. p.434. ISBN978-1544317908. 96 percent of the poultry sold in New York came from out-of-state suppliers. The industry was riddled with graft and plagued by deplorable health and sanitation conditions. The Live Poultry Code approved by President Roosevelt set a maximum workweek of forty hours and a minimum hourly wage of fifty cents. In addition, the code established a health inspection system, regulations to govern slaughtering procedures, and compulsory record keeping. A. L. A. Schechter Poultry Corporation, owned by Joseph, Martin, Aaron, and Alex Schechter, was a poultry slaughtering business in Brooklyn. Slaughterhouse operators such as the Schechters purchased large numbers of live chickens from local poultry dealers who imported the fowl from out of state to be killed and dressed for sale. Government officials found the Schechters in violation of the Poultry Code on numerous counts: They ignored the code's wage and hour provisions, failed to comply with government record-keeping requirements, and did not conform to the slaughter regulations. Their worst offense, however, was selling unsanitary poultry that the government found unfit for human consumption. For this reason, Schechter Poultry became known as the sick chicken case. The government obtained indictments against the Schechter Poultry Corporation and the four brothers on sixty counts of violating the code, and the jury found them guilty of nineteen. Each of the brothers was sentenced to a short jail term. They appealed unsuccessfully to the court of appeals and then pressed their case to the U.S. Supreme Court, asserting that the NIRA was unconstitutional on improper delegation and commerce clause grounds
↑ In the 1960s, Prof. Harold Hyman told students in his Constitutional History course at U.C.L.A., "The Supreme Court was wrong!" As a child he had worked for the Schechter brothers, and among other tasks, took chickens from Brooklyn to Jersey City – interstate commerce.
↑ Currie, David P. The Constitution in the Supreme Court: The Second Century, 1888–1986. Chicago and London: The University of Chicago Press (1990), ISBN0-226-13112-2, pp. 210, 223.
↑ Schechter Poultry Corp., 295 U.S. at 551–552 (Cardozo, J., concurring).
↑ Harry Hopkins, "Statement to Me by Thomas Corcoran Giving His Recollections of the Genesis of the Supreme Court Fight," April 3, 1939, typescript in Harry Hopkins Papers
↑ Shlaes, Amity. The Forgotten Man. New York: HarperCollins (2007), ISBN978-0-06-621170-1, p. 245.
↑ Shlaes, Amity. The Forgotten Man. New York: HarperCollins (2007), ISBN978-0-06-621170-1, p. 244.
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