As the Great Depression ravaged the nation, President Franklin D. Roosevelt and Congress passed a sweeping set of measures called the New Deal that were designed to lift the country out of the economic crisis. A key component of the New Deal was the National Industrial Recovery Act, which contained a set of regulations regarding the processing of poultry. These regulations, called the Live Poultry Code, set the maximum number of hours that a poultry employee could work, imposed a minimum wage for poultry employees, and banned certain actions as unfair competition.
Schecter Poultry was convicted of violating the poultry code, and it appealed the conviction all the way to the Supreme Court. Calling the code an overreach of congressional power, the Court struck it down as unconstitutional.
This was just the first of many Supreme Court decisions declaring New Deal laws unconstitutional. These rulings, made by aging justices, prompted Roosevelt to threaten to pack the Supreme Court with justices more favorable to his New Deal by adding an additional justice for each one who would not retire at age 70. But Roosevelt never had to make good on his threat: Death and resignation soon gave Roosevelt the vacancies he needed, and the New Deal survived.
295 U.S. 495 (1935)
CERTIORARI TO THE CIRCUIT COURT OF APPEALS
FOR THE SECOND CIRCUIT
1. Extraordinary conditions, such as an economic crisis, may call for extraordinary remedies, but they cannot create or enlarge constitutional power. P. 295 U. S. 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. 295 U. S. 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. 295 U. S. 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. 295 U. S. 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. 295 U. S. 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 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.