Sick Chickens, Oil Wells, and One Email

"All of the justices, Cardozo foremost among them, were incensed to learn that the Government was seeking to enforce a rule that existed in writing only on a single piece of paper inside a single bureaucrat's desk."

Yesterday afternoon, Ari Shapiro of NPR radio tried to explain how it is that Minerals Management Service (MMS) could issue "at least 17 drilling permits" after President Obama's supposed "freeze on offshore drilling." Incredibly, it turns out, "the freeze on offshore drilling was only "a verbal order."

Shades of Schechter Poultry Corp. v. United States (1935) and Panama Refining Co. v. Ryan (1935). These are two famous Depression-era Supreme Court cases decided by the "nine old men" of the Supreme Court. So famous, each has earned nicknames: the "Sick Chicken Case" and the "Hot Oil Case."

Each court decision struck down as unconstitutional key parts of Franklin Roosevelt's "New Deal" legislation known as the National Industrial Recovery Act (NIRA). More to the point, the two cases also spurred the development of the Federal Register, that daily publication which publicly prints new laws enacted by Congress, executive orders of the president, and administrative agency regulations.

In Panama City Refining, the Hot Oil Case, the supreme court was reviewing two oil company challenges to the federal government's retroactive enforcement of state quotas limiting sales and prices of petroleum products. As the official "50th anniversary" history of the Federal Register explains:

[T]wo Texas oil companies, had been charged with violating a provision of [NIRA] regulations that technically did not exist at the time the companies were charged. The defects in the case highlighted a fundamental problem facing a democratic government that was exploding with new agencies and new regulations. Amidst the ferment of orders and codes issuing from agencies, even individuals working at the highest levels of government found it difficult or impossible to keep track of all of them. And for the regulated public, this new body of “executive legislation” was inaccessible and virtually hidden.

The court majority essentially nullified one section of the NIRA as delegating excessive presidential powers. One justice, the brilliant Benjamin Cardozo, dissented. He wrote:

I am unable to assent to the conclusion that section 9(c) of the National Recovery Act, 15 USCA § 709(c), a section delegating to the President a very different power from any that is involved in the regulation of production or in the promulgation of a code, is to be nullified upon the ground that his discretion is too broad or for any other reason. My point of difference with the majority of the court is narrow. I concede that to uphold the delegation there is need to discover in the terms of the act a standard reasonably clear whereby discretion must be governed. I deny that such a standard is lacking in respect of the prohibitions permitted by this section when the act with all its reasonable implications is considered as a whole. What the standard is becomes the pivotal inquiry.

Cardozo in general supported the New Deal. So it is not surprising that he would find no constitutional impediment to congressional delegations of power to the president or one of the new administrative agencies created to handle the desperate emergency of the Great Depression. Cardozo convincingly said as much in his dissenting opinion.

Schechter (the "Sick Chicken Case") involved an analogous issue: whether the National Industrial Recovery Administration could constitutionally enforce against two New Jersey chicken producers a "Poultry Code" that required health inspections of the chickens before being sold in interstate commerce. (Also at stake under the Act was the federal power to regulate wages, benefits, and working conditions of poultry producer employees.)

Importantly, in this case the supreme court justices were unanimous. Even Justice Cardozo agreed. The interesting question is 'Why would Cardozo agree?'

Therein lies our story. The common professional synopsis of the "Sick Chicken Case" is that the congressional enactment known as the NIRA did not itself include specific cleanliness standards for poultry. Instead, Congress had merely empowered the President (or Executive office) to do so. A unanimous Supreme Court found this to be an unconstitutional delegation of legislative authority.

Of course, it is today a standard practice for Congress to delegate broad administrative powers to the executive or an administrative agency. No one expects, and today it is almost universally recognized that the Constitution does not require, Congress to explicitly enact every detailed jot and tittle of a regulatory requirement. Yet, Schechter has never been explicitly overruled.

The textbooks don't mention this and the court certainly did not, but in our era many law students learned a bit of background history to the Sick Chicken Case that helps to explain the court's sweeping ruling, Cardozo's surprising decision to go along with it, and why even today the court won't explicitly reject the Schechter decision. This is how we remember hearing about it from an aging Harvard Law School professor who in his youth had clerked for one of the unanimous "nine old men" --

On the day of oral argument one justice interrupted the lawyerly arguments to ask, 'About this regulation that defines when a chicken is sick and when it isn't -- where is it? We can't seem to find the rule in any of the parties' legal briefs.'

The government's attorney apologized. He said he wasn't sure where it could be found, but he promised the court he would track it down and provide it to the court. Some days later, after a frantic search through the disorganized files of newly-hired N.I.R.A. staff, the lone original typed regulation was "found in the top drawer of a staff employee's desk." A messenger then hand-delivered it to the Court. (This was, of course, before photocopy machines.)

According to the old professor, all of the justices, Cardozo foremost among them, were incensed to learn that the Government was seeking to enforce a rule that existed in writing only on a single piece of paper inside a single bureaucrat's desk. All were of the view that due process required some form of public notice about the exact wording of an executive order or agency regulation.

All felt, too, that it was an affront to the judiciary to ask them to review a Government regulation that no one could find unless he happened to personally know who might have it stashed away in a desk.

Back to Ari Shapiro's radio report. "One source of confusion" he reports, "is the apparent lack of an original document laying out all the details of [President Obama's] moratorium."

"We have, in fact, been trying to locate and to actually get from the Interior Department something that actually documents that there is in fact a suspension," says [ Mike Senatore of Defenders of Wildlife].

In fact, two Interior officials tell NPR the drilling suspension was not put into writing.

"It was a straightforward verbal order to the director of MMS, which was then transmitted within MMS," said one official in an email. [emphasis added]

Secret orders that no one can gain access to were a staple of the Bush-Cheney administration, in matters of oil policy as well as the 'War on Terror.' It is beyond disappointing that the Obama administration is adopting those same policies as his own.

minor edit 5-25 pm