Today in 1935: Schechter v. U.S. rules another New Deal law unconstitutional

May 27, 2011

Today in Legal HistoryOn May 20, 1935, the U.S. Supreme Court decided A.L.A. Schechter Poultry Corp. v. United States, which held the National Industrial Recovery Act (NIRA), a major piece of President Franklin Roosevelt’s New Deal, unconstitutional.

The case began as a criminal conviction against several owners of Schechter Poultry Corporation, a business that purchases poultry for slaughter and resale.

They were convicted under the “Live Poultry Code,” which was written by the Roosevelt Administration pursuant to authority granted by the NIRA.

The Code set maximum weekly working hours of a poultry employee along with their minimum wage.

It also banned certain methods of “unfair competition,” which Schechter’s owners were convicted of violating (selling “unfit chickens,” avoiding inspections by local regulators, falsifying sales records, etc).

The Supreme Court unanimously ruled for Schechter, holding that the Executive didn’t have the constitutional authority to write the Code to begin with, and that in passing the Act, Congress overstepped its authority under the Commerce Clause.

By itself, the ruling is fairly insignificant, since the NIRA was written to expire the next year anyhow.

However, in the larger scope of American legal history, the case is fairly significant.

In response to the Court’s ruling, Congress passed the National Labor Relations Act (NLRA), a significant labor regulatory law, the same year.

In the context of Commerce Clause jurisprudence, this case was one of the last that narrowly interpreted Congress’s authority there under.

In fact, two years later, the Court ruled the NLRA constitutional in National Labor Relations Board v. Jones & Laughlin Steel Corporation.

In doing so, it effectively ruled in the opposite way than it did in Schechter.  It ruled that Congress had broad regulatory powers under the Commerce Clause, such that it could regulate the same labor issues that Schechter said it couldn’t.

What happened in two years to dramatically change the opinion of the Court?

Roosevelt announced in 1937 a plan to expand the size of the Court, thereby tipping the scales in his favor.

However, despite the common belief that Roosevelt’s announcement caused Justice Owen J. Roberts to change his voting patterns, this is not the case.

Roberts had made the decision to switch before the announcement, and support on the Court for Roosevelt’s policies grew with every justice that retired or died and was replaced by one selected by him.

NLRB was only the beginning.

The Court had expanded Congress’s authority under the Commerce Clause regularly since then, only ceasing the expansion with 1995’s U.S. v. Lopez.

Since Lopez, the Court has checked, but not reduced, Congress’s Commerce Clause authority (except for 2005’s Gonzales v. Raich, which was more the result of an ideological opposition to marijuana legalization).

Within the next year or two, we’ll get to see another major Commerce Clause decision from the Court with 2010’s federal healthcare reforms (if the Court decides against a Taxing and Spending Clause analysis).

No matter how the Court rules, though, it will not limit Congress’s power as much as Schechter did.