In Schecter v. United States, the Supreme Court: Upheld the NIRA as constitutional under the "necessary and proper" clause. unanimously decided that the National Industrial Recovery Act (NIRA) was unconstitutional. found that Congress had exceeded its power to tax when it passed the NIRA, but let the law stand because the country was facing an economic emergency. ruled that the NIRA was unconstitutional in a majority opinion that divided conservatives and liberals on the Court.

A.L.A Schechter Poultry Corp was a poultry company that was sued by the government of the United States for some practices endorsed by the National Industrial Recovery Act which they believed were illegal. These include the sale of unhealthy chicken. The Schechter Poultry had an initial sixty count charge from the United States which was later reduced to eighteen charges.

NIRA was a part of the New Deal instituted by President Roosevelt in 1933. The act allowed private trade groups to write the codes for trade. The executive could then give some power to the law. It was argued in court that the NIRA act allowed for the interference of the executive in legislative laws. Chief Justice Hughes led the court in making the unanimous decision to repeal the codes of fair competition endorsed by NIRA.