Chamber of Commerce of the United States v. Reich

The decision confirmed the circumstances under which the judiciary can properly review Executive Orders and rule on their validity. The decision determined that the Procurement Act does not give the president broad discretionary power to set labor policy. The decision also clarified the preemption doctrine, which establishes that federal law preempts any state or local law, and that a narrowly specific law preempts a more general one.

One of the president's concerns as the country's chief executive is the economical and efficient management of government. This includes setting the budget for purchasing goods and services from private contractors-an amount that totaled $437 billion in 1994. The Federal Property and Administrative Services Act (the Procurement Act) gives the president broad authority to set the conditions for federal contracts with private sector providers. The law's stated intent is "to provide for the Government an economical and efficient system for . . . procurement and supply . . . " On 8 March 1995, President Clinton issued Executive Order No. 12,954, 60 Fed. Reg 13,023, which stated that "to ensure the economical and efficient administration and completion of Federal Government contracts, contracting agencies shall not contract with employers that permanently replace lawfully striking employees." The president's rationale was that replacement workers would be less efficient than permanent workers, and thus would raise the cost of the products and goods being produced. Secretary of Labor Robert Reich was charged with developing the specific regulations to implement this order, and on 25 March, Secretary Reich issued the final implementing regulations.

On 15 March, the Chamber of Commerce, American Trucking Associations, Inc., Labor Policy Association, National Association of Manufacturers, Bridgestone/Firestone, Inc., and Mosler Inc. filed suit for declaratory and injunctive relief against the enforcement of the order. They argued that the order conflicted with the National Labor Relations Act (NLRA), the Procurement Act, and the Constitution. The district court found that the appellants' claims were not yet appropriate because Secretary Reich had not finalized the regulations asked for in the Executive Order. That decision was reversed on appeal, and on remand, the district court again found in favor of the government. The district court ruled that the appellants' claim was not reviewable by the courts because of the broad discretionary authority given the president under the Procurement Act. This decision was then appealed to the U.S. Court of Appeals for the District of Columbia.