A. L. A. Schechter Poultry Corp. v. United States

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In A. L. A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 550 (1935), the U.S. Supreme Court unanimously struck down regulations that fixed the hours and wages of individuals employed by an intrastate business because the activity being regulated related to interstate commerce only indirectly. Justices Benjamin Cardozo concurred, as joined by Justice Harlan Fiske Stone.

In doing so, the Court characterized the distinction between direct and indirect effects of intrastate transactions upon interstate commerce as "a fundamental one, essential to the maintenance of our constitutional system." Id. at 548. Activities that affected interstate commerce directly were within Congress' power; activities that affected interstate commerce indirectly were beyond Congress' reach. Id. at 546.

The justification for this formal distinction was rooted in the fear that otherwise "there would be virtually no limit to the federal power and for all practical purposes we should have a completely centralized government." Id. at 548.

Court Packing Scheme

This was the decision that prompted President Franklin Delano Roosevelt's ill-fated court packing scheme:

Roosevelt was particularly upset by the Court’s 1935 decision in Schechter Poultry Corp. v. United States. The unanimous decision invalidated a key part of the National Industrial Recovery Act, one of the projects passed during FDR's 100-day program in 1933. President Roosevelt did not mince words a week later when he talked to the press. “You see the implications of the decision. That is why I say it is one of the most important decisions ever rendered in this country,” Roosevelt told reporters on May 31, 1935. “We have been relegated to the horse-and-buggy definition of interstate commerce.”[1]