Law in FDR's New Deal
Was the New Deal unconstitutional?
In 1935, the Supreme Court of the United States ruled that much of it was, tossing out both the Agricultural Adjustment Act and the National Industrial Recovery Act—the two main pillars of FDR's 1933 recovery program—on the grounds that they granted vast new powers to the president in ways that violated the spirit and letter of the Constitution.
Supreme Court as Bulwark of Laissez-Faire
In overturning much of Roosevelt's anti-Depression program, the Supreme Court held firm to a role it had been playing in American politics for more than 50 years. After the Civil War, the Supreme Court became a rigid defender of the principle that any government attempt to regulate the economy represented a substantive violation of individuals' rights to due process by abrogating their freedom of contract. Thus, for example, legislation mandating a minimum wage was unconstitutional because it restricted an individual's freedom to sell his labor for less than the minimum wage. The Supreme Court's long, consistent stand on substantive due process and liberty of contract maintained laissez-faire as the law of the land and frustrated generations of reformers, who hoped to use the power of government to moderate the free market.
By the time Roosevelt took office, a large majority of the American people had seen enough of laissez-faire, and demanded government intervention to right the economy. But a bare majority of the Supreme Court still consisted of elderly adherents of nineteenth-century laissez-faire doctrine.
The Supreme Court's 1935 overturning of the AAA and NRA gutted the First New Deal and set the judiciary on a collision course with FDR. The old men of the Court, fierce defenders of the Constitution as they understood it, seemed determined to thwart Roosevelt's manifestations of "bold, persistent experimentation" to address the Great Depression.
The Court Packing Crisis
Roosevelt decided to launch a frontal assault against the Court's obstruction of his program. Following his landslide victory in the election of 1936, he proposed new legislation that would allow him to expand the court from nine to fifteen members by adding one new justice for each judge over 70 years old who refused to retire. Roosevelt tried to justify the measure as an effort to reduce the workload of aged jurists, but his true intent was obvious: FDR would "pack" the court with enough pro-New Deal justices to outvote the conservative bloc.
FDR's ill-advised court-packing measure, which would have destroyed the judicial branch's independence from the executive and thus weakened the American system of government, was the most unpopular move of his long political career. Even loyal Roosevelt supporters were appalled by his transparent attempt to subvert the Supreme Court of the United States.
Constitutional crisis was averted early in 1937, when conservative Justice Owen Roberts unexpectedly flip-flopped, ruling in West Coast Hotel v. Parrish that a Washington state minimum wage law did not violate the Constitution. Just a year earlier, Roberts had consistently supported the conservative majority in rejecting similar laws for violating freedom of contract. Roberts's abrupt change in reasoning couldn't really be justified by logic or principle; most likely, it was a political decision. Seeing that the American people had massively ratified Roosevelt's agenda in the elections of 1934 and 1936, Roberts seemingly decided that further obstruction by the Supreme Court would lead only to constitutional crisis and the likely weakening of the judicial branch of government.
With Roberts in the fold, major pieces of New Deal legislation—most prominently, the Social Security Act—were guaranteed to survive judicial review. Ever since, massive federal intervention into the American economy has been a more or less accepted and expected feature of our political economy. But the underlying question remains: if, on principle, the New Deal's sweeping executive powers were unconstitutional in 1935, what made them constitutional in 1937? What makes them constitutional today?