Youngstown tube & Sheet Co. was a Supreme Court decision during the Truman Administration. The decision was made in 1951 during the Korean War. President Truman tried to temporarily nationalize the Steel Industry, in response to a breakdown in negotiating a new contract between the Steel industry and the unions, through executive order.
The Supreme Court struck down the executive order because it was an impermissible use of Executive power. Congress had never explicitly granted the President the Power to seize any industry without going through proper legal channels as established in the Taft-Hartley Act or the Defense Authorization Act. Truman tried to justify the act as an aggregate of presidential powers. The Supreme Court thought differently.
The impact of the decision did not come from the opinion of the court. It came from Justicce Jackson's concurring opinion where he created a three part test to determine if the president was acting within his constitutional powers. The opinion, for the most part, constrained the presidency in its use of power domestically its explicit constitutional powers and whatever legally Congress delegated to it. Here is the exact wording of Justice Jackson,
"1. When the President acts pursuant to an express or implied authorization of Congress, his authority is at its maximum, for it includes all that he possesses in his own right plus all that Congress can delegate. In these circumstances, and in these only, may he be said (for what it may be worth) to personify the federal sovereignty. If his act is held unconstitutional under these circumstances, it usually means that the Federal Government, as an undivided whole, lacks power. A seizure executed by the President pursuant to an Act of Congress would be supported by the strongest of presumptions and the widest latitude of judicial interpretation, and the burden of persuasion would rest heavily upon any who might attack it.
When the President acts in absence of either a congressional grant or denial of authority, he can only rely upon his own independent powers, but there is a zone of twilight in which he and Congress may have concurrent authority, or in which its distribution is uncertain. Therefore, congressional inertia, indifference or quiescence may sometimes, at least, as a practical matter, enable, if not invite, measures on independent presidential responsibility. In this area, any actual test of power is likely to depend on the imperatives of events and contemporary imponderables, rather than on abstract theories of law.
When the President takes measures incompatible with the expressed or implied will of Congress, his power is at its lowest ebb, for then he can rely only upon his own constitutional powers minus any constitutional powers of Congress over the matter. Courts can sustain exclusive presidential control in such a case only by disabling the Congress from acting upon the subject. Presidential claim to a power at once so conclusive and preclusive must be scrutinized with caution, for what is at stake is the equilibrium established by our constitutional system." from Justia.
President Obama's executive action will hinge on how the courts view not only precedent, but the larger political context. Will Congress situate itself long enough to pass actual legislation? The decision from the district court in Pennsylvania does not bode well for Obama and neither does the conservative bloc on the Supreme Court.