293 U.S. 388 (1935)
In June 1933 Congress enacted the National Industrial Recovery Act.1 Section 9(c) of Title I authorized the President to prohibit the transportation in interstate and foreign commerce of petroleum and its products.2 This prohibition applied when the petroleum was produced or withdrawn from storage in excess of amounts permitted by any state law or valid regulation.3
On July 11, 1933, the President issued an Executive Order prohibiting such transportation of excess petroleum.4 On July 14, 1933, he issued a further order authorizing the Secretary of the Interior to enforce the prohibition by designating agents, setting up boards, and promulgating rules and regulations.5
The Secretary of the Interior issued regulations on July 15, 1933, later amended on July 25 and August 21, 1933.6 These regulations required every producer, purchaser, shipper, and refiner of petroleum to file monthly sworn statements detailing residence, production locations, allowable and actual production, deliveries, and storage, and to maintain adequate books and records available for inspection.7
Panama Refining Company, a Delaware corporation engaged in refining crude oil and shipping it in interstate commerce, together with its Texas subsidiary and Amazon Petroleum Corporation along with other Texas oil producers, filed suits in federal district court in Texas against federal officials including the Administrator and Attorney General.8 The complaints alleged that the regulations restricted their interstate shipments of oil produced in compliance with Texas law.9
The District Court granted permanent injunctions against enforcement of the federal regulations and orders.10 The Circuit Court of Appeals reversed the decrees and directed that the bills be dismissed.11 The Supreme Court granted certiorari on October 8, 1934.12
Whether Section 9(c) of Title I of the National Industrial Recovery Act of June 16, 1933, constitutes an unconstitutional delegation of legislative power to the President?13
Congress is not permitted to abdicate or transfer to others the essential legislative functions with which it is vested.14 Legislation must often be adapted to complex conditions involving a host of details.15 Congress must lay down policies and establish standards while leaving to selected instrumentalities the making of subordinate rules within prescribed limits and the determination of facts to which the declared policy applies.16
Yes. Section 9(c) authorized the President to prohibit the transportation in interstate and foreign commerce of petroleum and its products produced or withdrawn from storage in excess of amounts permitted by state law.17 The section did so without declaring any policy, establishing any standard, or requiring any finding by the President as to the circumstances or conditions under which the prohibition should apply.18 The general declaration of policy in Section 1 of the Act addressed broad goals such as removing obstructions to commerce and conserving natural resources but supplied no criterion governing the transportation of excess production.19 The Executive Orders of July 11 and July 14, 1933, and the regulations issued by the Secretary of the Interior on July 15, 1933, and later amended, were promulgated without any presidential findings linking the prohibition to particular conditions in the industry.20
This grant conferred upon the President an unlimited authority to determine the policy and to lay down or withhold the prohibition as he saw fit, exceeding the constitutional limits on delegation.21
Section 9(c) constitutes an unconstitutional delegation of legislative power to the President.22
Related opinions on this issue
Joined by Justice Stone
Justice Cardozo dissented on the ground that Section 9(c) supplies a sufficient standard when read with the rest of the statute.23 He concluded that the President is to prohibit transportation of hot oil when satisfied that doing so will tend to effectuate the policies declared in Section 1, including elimination of unfair competitive practices, conservation of natural resources, and promotion of productive capacity.24 The discretion is thereby canalized within banks that keep it from overflowing, and the delegation therefore remains valid.25