March 2, 1824 – The U.S. Supreme Court Decided Gibbons v. Ogden

U.S. Supreme Court Chief Justice John Marshall helped define the constitutional law of the early United States. In this case, Gibbons v. Ogden, 22 U.S. 1 (1824) he wrestled with the scope of the power of Congress to regulate economic activity.

Article 1, Section 8, Clause 3 of the United States Constitution, known as the Commerce Clause, provides that “Congress shall have power to regulate commerce with foreign nations, and among the several States, and with the Indian tribes.”

The State of New York had granted to Robert Livingston and Robert Fulton a monopoly to operate steamboats in its navigable waters. Fulton then sub-licensed that power to Aaron Ogden to operate steamboats between New York and New Jersey. Thomas Gibbons, another steamboat operator, ran two ferries along the same route. Ogden sought an injunction against Gibbons in a New York state court, claiming that he had exclusive rights to operate the route. The New York court found for Ogden and ordered Gibbons to cease operating his steamships, and on appeal, the New York Supreme Court affirmed the order. Gibbons appealed to the U.S. Supreme Court, which reviewed the case in 1824.

Gibbons sought to have the New York grant of monopoly declared unconstitutional as repugnant to the Commerce Clause, and the Supreme Court agreed.

Importantly, Justice Marshall prefaced his ruling by a discussion of how to interpret the Constitution. He asked, should the words of the Constitution be construed strictly? If so, the federal government would be denied power over issues that were not specifically enumerated in the Constitution. Marshall insisted:

. . . that narrow construction which would cripple the government and render it unequal to the object for which it is declared to be instituted, and to which the powers given, as fairly understood, render it competent; … we cannot perceive the propriety of this strict construction, nor adopt it as the rule by which the Constitution is to be expounded.”

But to decide the case, Marshall confronted another problem: the meaning of the words used in the Constitution. Language is imperfect, so he needed to interrogate the context in which the words were used.

Chief Justice John Marshall

Marshall mused that “Commerce, undoubtedly, is traffic, but it is something more: it is intercourse.” He noted that historically, the Union has exercised power over navigation, and this power “has been understood by all to be a commercial regulation [emphasis added].”

It was so understood, and must have been so understood, when the Constitution was framed. The power over commerce, including navigation, was one of the primary objects for which the people of America adopted their government, and must have been contemplated in forming it. The [Constitutional] convention must have used the word in that sense, because all have understood it in that sense, and the attempt to restrict it comes too late.”

Continuing to parse the Commerce Clause, Marshall examined the clause’s phrase “commerce among the several States,” concluding that the word “among” means “intermingled with.” Accordingly, Congress’ power to regulate interstate commerce does not “stop at the external boundary line of each State, but may be introduced into the interior.” In other words, Congress may pass any law that regulates commerce, so long as that commerce is not wholly confined within a single state.

He then turned to the word “power.” The power to regulate was deemed to be the power to prescribe the rules by which commerce is to be governed. The power, although “limited to specified objects, is plenary as to those objects.” He reasoned that once we conclude that Congress had the power to regulate transactions that passed from one state to another, the power of Congress, then, “comprehends navigation, within the limits of every State in the Union, so far as that navigation may be in any manner connected with ‘commerce…among the several States….’ It may, of consequence, pass the jurisdictional line of New York and act upon the very waters to which the prohibition now under consideration applies.”

Marshall further observed:

In our complex system, presenting the rare and difficult scheme of one General Government whose action extends over the whole but which possesses only certain enumerated powers, and of numerous State governments which retain and exercise all powers not delegated to the Union, contests respecting power must arise.”

But, he pointed out, the Framers foresaw this conflict, “and provided for it by declaring the supremacy not only of itself, but of the laws made in pursuance of it.…[T]he [Federal] Constitution is the supreme law.”

The case is important not so much for its narrow holding [that “commerce” includes navigation], but for the Court’s expansive reading of the Commerce Clause. Although Congress did not soon enact extensive regulation, the Gibbons case laid the constitutional foundation for significant expansion of the federal government into economic activity more than 100 years later.