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1935 United States Supreme Court case
Panama Refining Co. v. Ryan Hot Oil case ,was a case in which theUS Supreme Court ruled that theFranklin Roosevelt administration 's prohibition of interstate and foreign trade inpetroleum goods produced in excess of statequotas ,the "hot oil" orders adopted under the 1933National Industrial Recovery Act (NIRA), was unconstitutional.
The ruling was the first of several that overturned key elements of the administration'sNew Deal legislative program. The relevant section 9(c) of the NIRA was found to be an unconstitutional delegation of legislative power, as it permitted presidential interdiction of trade without defining criteria for the application of the proposed restriction.
The finding thus differed from later rulings that argued that federal government action affecting intrastate production breached theCommerce Clause of theConstitution .InPanama v. Ryan ,the Court found that Congress had violated thenondelegation doctrine by vesting the President with legislative powers without clear guidelines and by giving the President enormous and unchecked powers. The omission of congressional guidance on state petroleum production ceilings occasioned the adverse ruling because it allowed the executive to assume the role of the legislature.
JusticeCardozo dissented and claimed that the guidelines had been sufficient.
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Dormant Commerce Clause
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