Panama Refining Co. v. Ryan, 293 U. S. 388, (1935)
Congress gave to the President of the United States the power to restrict or prohibit the interstate and foreign transport of petroleum. The Plaintiff, Panama Refining Co., brought suit to enjoin the Defendants, certain government officials, from enforcing the Executive Order. The District Court granted a permanent injunction against enforcement, but the Court of Appeals reversed.
Is Congress allowed to distribute unrestricted law-making authority to the President?
No, Congress cannot distribute unrestricted law-making authority to the President.
The Court said that congressional delegation of power to the executive branch must be specific and limited. The NIRA did not include any policy guidelines for prohibiting or not prohibiting the transportation of petroleum production in excess of state allowances. The President was granted great discretion. Congress let the matter to him “to be dealt with as he pleased.” Under the United States Constitution, Congress is not allowed to transfer its essential legislative powers to other branches of government. This is a violation of the separation of powers doctrine.