Brief Fact Summary. Congress delegated authority to an executive agency to regulate various industries. In turn, the President of the United States (the President) redelegated that power to business groups and boards of various industries, to create industry wide codes of conduct. The Defendant, A.L.A. Schechter Poultry Corporation (Defendant), was indicted for violating one of the codes.
Synopsis of Rule of Law. Congress may not delegate law-making authority to an executive agency without prescribing specific standards for the exercise of that authority.
But 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 the rehabilitation and expansion of trade or industry.View Full Point of Law
Issue. May Congress delegate unrestrained law making authority to the executive branch?
Held. No, the legislature may not delegate to the executive branch the unfettered authority to make law. Since there were no standards or guidelines for creating the codes, the Congress improperly delegated legislative power.
Discussion. To determine whether the passage of these codes was an improper delegation of legislative authority, two grounds should be examined. First, in determining what limits Congress set for the President, look to trade and industrial groups that propose the codes because they must be “truly representative” of the industry members. Second, the codes must not promote monopolies or be oppressive to small enterprises. In short, the NIRA sets up no specific standards for the President to apply in determining whether to accept or reject the proposed codes. This leaves the discretion to the President virtually unfettered. Thus, the code-making authority granted to the President is an unconstitutional delegation of power.