State Legislation

The justices turned their initial attention to state legislation because almost a year passed before the most important of the federal New Deal measures reached the Court.

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One of the earliest cases involved an Oklahoma statute that declared that the manufacture of ice was a public utility subject to state regulation. The statute required ice operators to obtain a certificate before they began business. The measure was intended to raise prices by limiting competition, and the state acted on the basis of its police powers and the view that ice making was effected with a public interest.

The Supreme Court in New State Ice Company v. Liebmann ( 1932) took exception to the Oklahoma statute. The majority held that ice manufacturing was not a public utility and that the legislation fostered monopoly. Justice Brandeis dissented vigorously, arguing that it was up to the Oklahoma legislature to decide whether a. business was effected with a public interest, and that under depression conditions the Court had no business second-guessing the legislature on these matters. Given the enormity of the economic crisis, Brandeis urged his colleagues to adopt a position of judicial restraint that would encourage the states to experiment.

Two years later, the Court went off in another direction. In Home Building & Loan Association v. Blaisdell ( 1934), the justices were asked to rule on the constitutionality of the Minnesota Mortgage Moratorium Law. This emergency measure sought to deal with the plight of farmers faced with losing their property through mortgage foreclosure. The act permitted courts to expand the interval from foreclosure to sale in order that farmers might have additional time to raise the money to pay their indebtedness. By a five-to-four majority, the Court sustained the law. Justice Hughes wrote that under emergency conditions the states had authority to ensure the well-being of their citizens. Because the measure only delayed rather than prevented foreclosure, Hughes argued that the contract clause of the federal Constitution had not been violated. Conservatives argued the opposite. Justice Sutherland concluded that the contract clause was most applicable under just such emergency circumstances, and that the Minnesota law violated the clause because it rearranged the terms on which the parties had originally agreed.

In Nebbia v. New York ( 1934), the Court upheld still another state emergency statute. In this instance, New York state had created a control board to regulate the entire milk industry. The board had power to set minimum wholesale and retail prices, a measure intended to diminish cutthroat competition. Leo Nebbia, a Rochester grocer, was convicted of selling milk below the legal price, and he argued on substantive due- process grounds that his Fourteenth Amendment rights had been violated and that the milk business was not effected with a public interest.

The Court split badly once again, with a five-to-four majority sustaining the New York law. Justice Roberts spoke for the Court in holding that the measure was a reasonable effort by the state to deal with an emergency. With the marketplace in upheaval, the state legislature was clearly within its police powers to try to restore order. Justice McReynolds, for the dissenters, argued that the public interest was not what the legislature said it was. At the same time, he gave a stirring endorsement to the concept of the Court as a superlegislature. The justices, McReynolds wrote, "must have regard to the wisdom of the enactment."²³ The modern expression of extensive and interventionist judicial power, ironically, lay with the conservatives on the Court, who wished to overturn on grounds of policy as well as constitutional law the actions of the states.

A year later, in Morehead v. New York ex rel. Tipaldo, the conservative wing prevailed. In that case, the justices, with Sutherland writing for the Court, overturned a

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1933 New York model minimum-wage law. In this instance, the Court relied on its earlier decision in Adkins v. Children's Hospital ( 1923). The Court's action stirred sharp criticism from proponents of the New Deal in the states, and even the Republican platform of 1936 approved of state regulation of hours and wages for women and children.

The Court gave a mixed reading to state New Deal legislation. The conservatives opposed any measures that either regulated market conditions or undermined principles of contract, but they were unable to command consistently a majority of the Court. The decisions were usually close, with Roberts and Hughes providing the swing votes. These same divisions appeared when the justices considered federal legislation, but they more frequently struck these measures down. Roosevelt grew disillusioned with the Court, and he orchestrated the most important confrontation between it and the political branches during the twentieth century.

Federal Legislation

The early New Deal legislation was fraught with problems. Much of it had been drafted hastily. For example, the committee that wrote the NIRA overhauled the nation's business structure in one week. Members of Congress and the lawyers who aided them were often cavalier in their attitudes about the basis of constitutional authority upon which the measures rested. The commerce clause, the general welfare clause, and the taxing power were invoked in pell-mell fashion. There was a national crisis under way and the national government had to do something about it, and quickly. The breadth of many of the statutes and the fulsome claims made for constitutional authority by the New Deal raised real problems for all of the justices because, whatever their political sympathies, they had shown great resistance to state statutes that were vague and overly broad. Even the liberal members of the Court, who preached judicial restraint when state statutes were involved, balked at the centralizing tendencies of the New Deal. Finally, the New Deal lawyers who filled the new administrative agencies often disagreed with one another, and the administration's legal representation before the federal courts was often unsympathetic or, even worse, unfamiliar with the programs. ²⁴

The Court exploded whatever hope the New Deal had for the constitutional integrity of its program. The entire Court was convinced that Congress had violated the separation-of-powers standards by indiscriminately delegating legislative power to executive agencies. The NIRA was the subject of special scrutiny. The lawyers who administered it through the NRA believed that economic nationalism based on an expansive concept of the commerce clause had made such broad delegation "constitutionally . . . unassailable," but they quickly learned that "the Legal Realists of the 1930s had more perceptively plumbed the judicial mind."²⁵

The delegation question surfaced in the two cases in which the Court struck down the NIRA. The New Deal first appeared before the Court in Panama Refining Company v. Ryan ( 1935). The Court considered section 9(c) of the NIRA, which permitted the president to ban the interstate shipment of petroleum produced in excess of quotas set by the states. In 1933 the price of wholesale gasoline had fallen to two and a half cents per gallon, of crude oil to ten cents per barrel. National controls seemed a plausible solution. Eight of the nine justices disagreed, and for the first time in U.S.

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history, the Court held unconstitutional an act of Congress because it improperly delegated legislative powers to the president without specifying adequate guidelines. The decision removed the oil industry from national controls.

The delegation issue also surfaced in Schechter Poultry Corp. v. United States, which the Court decided on "Black Monday," May 27, 1935. On that day, the justices not only struck down the entire NIRA in Schechter, but they also held unconstitutional the Frazier-Lemke Mortgage Act, on grounds that it deprived creditors of property without due process of law. Schechter involved the New York City kosher poultry business, the largest in the country. This $90 million industry employed some sixteen hundred workers in over five hundred small shops. Some 96 percent of all chickens were imported from other states. The Schechter brothers were wholesale slaughterers of chickens, and they were bound under the Live Poultry Code of the NIRA to abide by certain business practices involving minimum wages, maximum hours, sanitary working conditions, and the sale of only healthy fowl. The Schechters openly violated the codes in an effort to boost their profits. They sold diseased and uninspected poultry at cut-rate prices, causing "Brooklyn to become the dumping ground of sick chickens for the whole United States."²⁶

The Schechter case presented the Court with two questions. First, was Congress's delegation of codemaking power to the president constitutional? The justices answered unanimously that it was not. Because Congress had provided no guidelines for the content or operation of the codes, the NIRA had put the president in the position of being able to create a governmentally sanctioned system of industrial cartels. Justice Cardozo, in an opinion concurring with that of the Court by Chief Justice Hughes, concluded that the absences of standards in the law amounted to "delegation run riot." ²⁷

The second question before the justices was whether the commerce power granted Congress authority to regulate manufacturing activities? Chief Justice Hughes concluded that it did not. Hughes returned to the traditional distinction, first articulated in E. C. Knight ( 1895), that the commerce power did not reach to manufacturing activities. Because the chicken-processing business in which the Schechter brothers engaged was outside of the commerce power, then Congress could not regulate it. This view of the commerce clause made no substitute constitutionally feasible, and it effectively ended efforts by the New Deal to develop a broad-scale national program of centralized industrial regulation and planning.

These two cases were important not only for striking down a vital piece of New Deal legislation, but for putting Congress on notice about the manner in which it delegated legislative power. Since these two cases, the Court has not invalidated a congressional delegation of power, suggesting that later acts delegating power were better written. After the New Deal years, the Court ceased to express doubt about the place of administrative agencies in the divided federal system of government. The Panama Refining and Schechter decisions also induced Congress to indicate clearly the goals, means, and processes it intends for an agency to follow.

The year following these cases the justices struck down another pillar of the New Deal, the Agricultural Adjustment Act. In United States v. Butler, the Court, by a six- to-three vote, concluded that a tax applied to agricultural producers was not for the purpose of raising revenues, but of purchasing compliance with a program that paid farmers not to produce. Justice Roberts, writing for the majority, found that the

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general welfare clause did not invest the Congress with authority to do whatever it wanted. Roberts asserted that in making these judgments he had not allowed personal or policy considerations to enter. "[T]he judicial branch of the Government," he explained, "has only one duty,--to lay the article of the Constitution which is invoked beside the statute which is challenged and to decide whether the latter squares with the former."²⁸

Both the opinion and Roberts's formalistic view of the judicial process struck a sore nerve. Proponents of legal realism condemned the opinion as further evidence of the intrusion of judicial values into the decision-making process, and the administration took it to be a condemnation of much of the constitutional authority on which its response to the Depression rested. Justice Stone, moreover, in his dissenting opinion, in which Brandeis and Cardozo joined, chided Roberts for his narrow view of the taxing power and attacked the notion that judging was simply a matter of squaring the law and the constitution in a mechanical fashion.

The Court in mid- 1936 had not pronounced the constitutional fate of the most important of the laws passed in the early phases of the second New Deal. Still waiting consideration were the Wagner Act, the Tennessee Valley Authority, and Social Security. Roosevelt was upset with the Court's actions and he began to consider plans by which to reverse its decisions. But in the 1936 presidential campaign he avoided directly assaulting the Court, running instead on a platform of economic improvements that he attributed to the success of the New Deal. The public gave him a thundering round of approval, and, based on this mandate, he launched a direct assault on the Court and the formalistic values with which it had been identified.

The Court Packing Plan

Throughout U.S. legal history, presidents have sought to mold the federal courts in their political image. On balance, they have fitted political considerations to professional needs, and the federal courts have had an impressive record of judges with high quality and character. From time to time, however, presidents have also become frustrated with the federal bench, especially the Supreme Court. But never had any president attempted to do what Franklin Roosevelt sought to do: remake the Supreme Court by changing the rules of the game by which vacancies became available. Neither death nor resignation by early 1937 had created any vacancies for Roosevelt to fill. The president, frustrated by his inability to appoint new justices, proposed to change the political cast of the federal courts by adding new judgeships.

The president clothed his plan with an apparent concern about the judicial workload. "The simple fact is that today," Roosevelt informed Congress in a message accompanying his proposed bill in February 1937, "a new need for legislative action arises because the personnel of the Federal judiciary is insufficient to meet the business before them."²⁹ He quite inaccurately claimed that the Supreme Court had a congested docket. As he later admitted publicly, he was much more concerned about the reactionary nature of the justices' opinions, a problem he attributed to their age. "Modern complexities call . . . for a constant infusion of new blood in the courts," he observed. "Little by little new facts become blurred through old glasses fitted, as it were, for the needs of another generation; older men, assuming that the scene is the same as it was in the past, cease to explore or inquire into the present or the future."³⁰ He went

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on to accuse the Court, composed of "nine old men," of "acting not as a judicial body, but as a policy-making body" that had "thwart[ed] the will of the people."³¹ The argument about age was a canard that Roosevelt invoked to mask his ideological motivation. The eighty-year-old Brandeis was not only vigorous but the source, through Felix Frankfurter (a friend of Roosevelt), of suggestions for the course of New Deal policy.

Roosevelt's plan, which was greeted with mixed enthusiasm in a Congress dominated by members of his own party, called for appointment of additional judges in all federal courts where there were incumbent judges of retirement age who did not choose to resign. With regard to the Supreme Court, Roosevelt proposed that once a justice reached age seventy, he would be given six months to retire. If he failed to do so, the president would be permitted to appoint an additional justice, up to a maximum of six new appointees. At the time the bill was proposed six justices would have qualified: the "Four Horsemen," Brandeis, and Hughes. Congress held hearings on the plan during the spring of 1937, but even ardent New Dealers recoiled at the president's willingness to bend judicial authority to political necessity. The measure therefore languished in Congress.

The Court-packing plan was a vivid demonstration of what the legal realists had been arguing about and what Holmes had said in Lochner. Law was clearly related to the political interests of the judges who passed on it. The measure broke the myth that judges were merely mechanics whose oracular decisions revealed some enduring truths. Even those supporters of the president who objected to the Court's decisions, found in the Court-packing plan a dangerous assault on the idea that law was a neutral. body of principles that could be impartially administered.

Date: 2015-01-29; view: 638