Gibbons v. Ogden
22 U.S. 1 (1824)

  • The New York State Legislature gave Fulton and Livingston the exclusive right (aka a monopoly) to operate ferries (steamboats) in NY State waters. They licensed Ogden to run a ferry from NYC to Elizabethtown, New Jersey.
  • Gibbons was running his own personal ferry between NYC and Elizabethtown.
    • Obviously, Gibbons ferry was operating (at least partially) in NY waters.
    • Gibbons was licensed to “ferry in the coasting trade” under a Federal Statute.
  • Ogden obtained an injunction against Gibbons from the NY Court. Gibbons appealed to the US Supreme Court.
  • The US Supreme Court found for Gibbons
    • The US Supreme Court interpreted the Federal Statute to authorize entry of Gibbons’ ferries into NY waters. The NY monopoly was therefore invalid under the Supremacy Clause, and the injunction was dissolved.
    • The Court found that ‘navigation’ is indeed ‘commerce’ as defined by Article I, Section 8, Clause 3 of the Constitution, aka the Interstate Commerce Clause.
      • “The mind can scarcely conceive a system for regulating commerce between nations which shall exclude all laws concerning navigation.” The ruling determined that “a Congressional power to regulate navigation is as expressly granted as if that term had been added to the word ‘commerce’.
    • The Court defined the word ‘among’ broadly, to include any sort of activity that has some connection with more than one State.
      • Three requirements for an activity to be excluded:
        • Activities that are completely interior to a State.
        • Activities that do not in any way affect another State.
        • It is “unnecessary” for Congress to regulate the activity
    • Ogden unsuccessfully argued that State laws requiring inspection of cargo demonstrated that the power to regulate commerce was not exclusively in Congress.
    • The Court concluded that Congressional power over commerce should extend to the regulation of all aspects of it, overriding State law to the contrary.
      • “If, as has always been understood, the sovereignty of Congress, though limited to specified objects, is plenary as to those objects, the power over commerce with foreign nations and among the several states is vested in Congress as absolutely as it would be in a single government, having in its constitution the same restrictions on the exercise of the power as are found in the Constitution of the United States.”
  • So basically, this case was one of the first to say that, because of the Interstate Commerce Clause, if the Federal government takes some action related to interstate commerce (like granting Gibbons a license), then States can’t block it.
  • When this decision was announced, the public was very happy to see the end of a monopoly. It was later referred to as “the emancipation proclamation” of American commerce.