Facts
- J.W. Hampton, Jr., & Co. imported barium dioxide into New York.
- A customs collector assessed a duty of six cents per pound, exceeding the statute’s baseline rate under the Tariff Act of 1922.
- The higher rate was imposed under a presidential proclamation issued pursuant to § 315 of the Tariff Act of 1922 (“flexible tariff”).
- Section 315 authorized the President, after investigation of domestic and foreign cost-of-production differences, to increase or decrease tariff rates as necessary to equalize those differences, within statutory limits.
- Hampton protested the increased duty, arguing § 315 unconstitutionally delegated legislative power to the Executive.
Issues
- Whether § 315 of the Tariff Act of 1922 unconstitutionally delegated Congress’s legislative power by authorizing the President to adjust tariff rates to equalize cost-of-production differences.
Decision
- The Supreme Court unanimously affirmed the judgment upholding § 315 and the increased duty.
- The Court held Congress may confer discretion on the Executive to implement a statutory policy when Congress supplies a governing standard.
- The Court concluded § 315 provided adequate criteria and limits, and required investigation as a predicate to presidential action, so the President’s role was execution based on fact-finding rather than lawmaking.
Legal Principles
- Congress may delegate authority to the Executive to carry out a statutory scheme when Congress states a policy and provides a guiding standard for the exercise of delegated discretion.
- A delegation is constitutional if Congress supplies an “intelligible principle” directing the delegate’s action.
- Assigning the Executive the task of determining factual conditions and applying a legislatively declared rule does not transfer legislative power.
- In the tariff context, Congress may structure duties to protect domestic industry and may authorize bounded adjustments to address changing economic conditions.
Conclusion
The Court upheld the Tariff Act’s flexible tariff mechanism, establishing that Congress may authorize presidential adjustment of tariff rates when Congress sets the policy, defines criteria and limits, and directs the Executive to apply the statutory standard to ascertained facts under an intelligible principle.