In 1935 the FDR administration sought to regulate the poultry industry through the National Industrial Recovery Act procured by the executive branch. The relevant portion of the law regulated the price of chickens as well as the eventual sale of “unhealthy” chickens. Under this regulation, Plaintiff was accused of selling unhealthy chickens. The regulation itself was written by local and private trade groups (which was permitted under NIRA). Plaintiff was with charged with 18 separate counts of violating the act.
Whether Congress can delegate its authority to regulate to local and private trade groups for the purpose of regulating interstate commerce.
No, NIRA is unconstitutional and void. Delegation of the authority to regulate interstate commerce to local or private bodies is a violation of the separation of powers doctrine. It delegates too much authority to the executive; it effectively takes the power to legislate from Congress and gives it to the Executive Branch.
Moreover, the court reviewed the indirect versus direct nature of the regulation, finding that it was more indirect. Indirect regulations of interstate commerce are reserved for the states, while regulations with direct impact on interstate commerce are reserved for Congress. Plaintiff in this case almost exclusively bought chickens from in-state suppliers and sold to in-state customers. The impact of Plaintiff’s activities on interstate commerce, therefore, was indirect. Congress should not have the authority to regulate activities with indirect impact on inter-state commerce, as their power to regulate would be essentially limitless.