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Oil act creates a slippery slope for FDR (Panama Refining Co. v. Ryan)

Quimbee: Panama Refining Co. v. Ryan

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The nondelegation doctrine says that Congress may not constitutionally delegate its legislative power to other branches of government. But often, Congress comes close to delegating legislative power when it provides administrative and rulemaking authority to the executive branch.

The question of how much delegated power is too much has come up in the courts at various times over the years. The case of Panama Refining Co. v. Ryan, 293 U.S. 388 (1935), involved a piece of Depression-era legislation called the National Industrial Recovery Act.

The act gave the president the authority to ban the interstate transport of petroleum products, if those products exceeded state-mandated production quotas. President Franklin Delano Roosevelt exercised that power in a series of executive orders that set interstate oil-production quotas and created criminal penalties for anyone shipping or selling oil produced in excess of those quotas.

The case came before the United States Supreme Court, and the Court concluded that the delegation was unconstitutional. In coming to this decision, the Court explained that Congress could not validly delegate rulemaking power to the executive branch, unless it provided clear policy standards governing the exercise of that power.

Because the law at the heart of this case lacked those standards, the Court struck it down.

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