In the case of Panama Refining Co. et al. v. Ryan et al., 1934, the U.S Supreme Court ruled that Section 9(c) of the National Industrial Recovery Act (NIRA) was unconstitutional because it granted excessive legislative power to the President without providing clear guidelines or standards for policy implementation. The NIRA had been enacted in response to the Great Depression and aimed at regulating industry and raising prices to stimulate economic recovery by reducing "unfair competition" through price fixing, wage agreements, and other restrictive practices. Section 9(c), specifically allowed President Roosevelt to prohibit interstate transportation of petroleum products produced in excess of state quotas - a provision challenged by oil companies including Panama Refining Co.. In its decision, which marked one of first major checks on New Deal legislation, court held that Congress cannot delegate its lawmaking powers so broadly thereby setting an important precedent regarding separation-of-powers doctrine.

In the dissenting opinion for Panama Refining Co. v. Ryan, Justice Cardozo disagreed with the majority's view that Congress had unconstitutionally delegated its legislative power to the President by allowing him to prohibit interstate transportation of "hot oil" (oil produced in violation of state law). He argued that such delegation was necessary and proper due to the complexity and fluidity of economic conditions which required a flexible response not possible through legislation alone. Furthermore, he contended that there were adequate standards provided within the statute itself as well as in related laws and regulations which guided executive action, thus preventing arbitrary or capricious use of power by the President. Lastly, he pointed out that judicial review served as an additional safeguard against potential misuse of this authority.