United States v. Butler- AAA
Brief Fact Summary. Butler, the Respondent (Respondent), seeks judgment that the
Agricultural Adjustment Act of 1933 (the Act) is unconstitutional in its scope.
Synopsis of Rule of Law. Congress may tax and apportion for the general welfare, but
Congress may not use taxation as a means to exercise powers retained by the States.
Facts. The Act authorized the setting of limits on the production of certain crops and the
imposition of taxes on crops produced in excess of these limits. Respondent alleges that
this tax acts as a regulation of crop production, which is a local issue.
Issue. May Congress tax crop production in excess of preset limits?
Held. No. Appeals court ruling reversed and remanded.
The taxing and spending power is broad – that is, not limited to the enumerated list of
issues in Article I, Section: 8 of the United States Constitution (Constitution).
However, the tax in this case was levied to discourage production of crops beyond the
limits set by the Act. This is beyond the powers delegated to the Federal Government.
Specifically, the regulation of agriculture is, absent a nexus with interstate commerce,
delegated to the states.
Dissent. Justice Harlan Stone (J. Stone) argues that the Supreme Court of the United
States (Supreme Court) has overstepped judicial restraint in declaring the Act
unconstitutional.
Discussion. United States v. Butler’s holding that the taxing and spending power is
broad is still good law, however the Supreme Court’s view of the Tenth Amendment’s
intersection with the taxing and spending power has subsequently changed. In
particular, Butler views the Tenth Amendment as a mere tautology, a view which has
changed in subsequent cases.
West Coast Hotel Co. v. Parrish
Brief Fact Summary. Washington instituted a state wage minimum for women and
minors. The Appellant, West Coast Hotel (Appellant), paid the Appellee, Parrish
(Appellee), less than this minimum.
Synopsis of Rule of Law. Wage and hour laws generally do not violate the Due
Process Clause of the United States Constitution (Constitution).
Facts. The Appellee was a maid who worked for less than the state minimum of $14.50
per 48-hour week. She brought suit to recover the difference in pay from the Appellant.
Issue. Is the fixing of minimum wages for women and minors constitutional?
Held. Yes. This case overrules Adkins v. Children’s Hospital.
The exploitation of a class of workers who are at a disadvantaged bargaining position is
in the best interest of the health of the worker and economic health of the community.
Discussion. The Supreme Court of the United States (Supreme Court) reverts to
reasoning that women are in an inferior position and need to be protected from those
who might try to take advantage of the situation. Furthermore, the state is justified in
adopting such legislation to protect the rest of the community from the burden of
supporting economically disadvantaged workers. It is important to note that the
Depression colored the Supreme Court’s analysis
A.L.A. Schechter Poultry Corp. v. United States
Brief Fact Summary. A.L.A. Schechter Poultry Corporation (Petitioners) were convicted
in the District Court of the United States for the Eastern District of New York for violating
the Live Poultry Code, promulgated under Section:3 of the National Industrial Recovery
Act.
Synopsis of Rule of Law. Congress is not permitted to abdicate or transfer to others
the essential legislative functions with which it is vested by Article I of the Constitution of
the United States.
Facts. Section:3 of the Act authorized the President to approve “codes of unfair
competition” for trades and industries, and a violation of any code provision in any
transaction in or affecting interstate or foreign commerce was made a misdemeanor
punishable by a fine. The Live Poultry Code was approved by the President on April 13,
1934. Petitioners were convicted in the District Court for violating the Live Poultry Code,
and contended that the Code had been adopted pursuant to an unconstitutional
delegation by Congress of legislative power.
Issue. Did Congress, in authorizing the “codes of unfair competition” establish the
standards of legal obligation, thereby performing its essential legislative function?
Held. No. The code-making authority conferred was an unconstitutional delegation of
legislative power. Under Title 1, Section:1 of the Act there was a broad “Declaration of
Policy,” and the President’s approval of a code was simply conditioned on his finding
that it would “tend to effectuate the policy of this title.” The Act imposed no limitations on
the scope of the new laws, and there was a very wide field of legislative possibilities.
Dissent. None. Concurrence. The delegated power of legislation was unconfined and
vagrant.
Discussion. Section:3 of the Act was without precedent in that it supplied no standards
for any trade, industry or activity. Instead of prescribing rules of conduct, it authorized
the President to make the codes to prescribe them. Congress made an unconstitutional
delegation because it vested in the President a clearly legislative function without
imposing necessary standards and restrictions.
NLRB v. Jones & Laughlin Steel Corp
Brief Fact Summary. This case challenges the constitutionality of the National Labor
Relations Act of 1935 (the Act) when the Act regulates activity that occurs solely within
the boundaries of one state.
Synopsis of Rule of Law. Congress has the power to regulate intrastate activities that
potentially could have a significant impact on interstate commerce.
Facts. This case challenged the constitutionality of the Act. The National Labor
Relations Board (NLRB) found that Jones & Laughlin Steel Corp. (Jones & Laughlin)
engaged in unfair labor practices by firing employees involved in union activity. Jones &
Laughlin failed to comply with an order to end the discriminatory practices. The NLRB
sought enforcement of its order in the Court of Appeals. The Court of Appeals found the
order was outside of the range of federal power. The matter was appealed to the
Supreme Court of the United States (Supreme Court).
Issue. Does the federal government have the power to regulate local employment
practices in companies whose business effects interstate commerce?
Held. Yes. Judgment reversed.
The Supreme Court found that Jones & Laughlin does significant business outside of the
state of Pennsylvania. The majority of its products were sold outside of the state.
Congress retains the power to control and regulate interstate commerce. Although the
employee discharges may be an intrastate activity, the repercussions from such
discharges have the potential to significantly affect interstate commerce. Therefore,
Congress has the power of legislation over such activities.
Dissent. The employee discharges are too remote from interstate commerce to justify
Congressional regulation.
Discussion. Congress passed the Act under its commerce power. The commerce
power is a broad ranging power, which is the basis for a significant amount of
Congressional legislation
Steward Machine Co. v. Davis
Brief Fact Summary. The federal unemployment system provided a scheme whereby
employers paid a tax to the federal government, but they could deduct the same tax if
they made a contribution to a state employment fund.
Synopsis of Rule of Law. For a tax and credit scheme to be unconstitutional as against
the Fifth Amendment or of principles of federalism, there must be a showing that the tax
and credit used together are coercive and/or that they impair the autonomy of the States.
Facts. Under the federal unemployment compensation system employers were required
to pay a certain tax to the United States Treasury. But if they made a contribution to a
“certified” state unemployment fund, they could deduct up to 90 percent of the same tax
liability. The Plaintiff, the Steward Machine Company (Plaintiff), challenged the validity of
the tax system on constitutional grounds.
Issue. Was the federal unemployment tax system in violation of the Fifth Amendment or
of principles of federalism?
Held. No. The lower court’s decision is affirmed. The tax system was constitutional.
The tax system at issue is merely designed to assist the federal and state agencies to
work together. Neither the States nor the citizens are injured. The system does not
require the States to surrender powers essential to their quasi-sovereign status.
It is necessary to distinguish between coercion and temptation. Every tax is to some
degree coercive. Every rebate from taxes conditioned upon conduct is to some extent a
temptation. In the instant case, the tax system did not reach coercion.
Discussion. With respect to the federal government’s ability to enact federal regulation
pursuant to its power to spend, this case gives back to Congress a little of the power that
United States v. Butler took away. The Supreme Court here draws a distinction between
federal regulation that encourage (i.e., pressure) the States and those that coerce them.
The former is permissible, the latter is not. The precise point at which the line from
encouragement to coercion is crossed remains an open question.