Several early Supreme Court cases helped to define federalism in the early years of the United States. One of the most influential cases was Gibbons v. Ogden, the impact of which can still be felt in the present day.
When John Marshall became Chief Justice of the Supreme Court in 1801, little did the nation know how significant his rulings would be in shaping the United States.
His rulings in landmark cases such as Marbury v. Madison, Fletcher v. Peck, the important Mcculloch v. Maryland, Worcester v. Georgia, and dozens of others have an outsized influence on the relationship between the federal and state governments.
As it turned out, the 1824 Supreme Court case of Gibbons v. Ogden would be chief among them in terms of historical significance. After a New York court ruled in Ogden’s favor that his New York license to provide steamship transportation along the Hudson River superseded Gibbons’ federal license, Gibbons appealed to the Supreme Court.
The case boiled down to whether Congress or individual states had the power to regulate interstate navigation. In a broad interpretation of the Commerce Clause (Article I Section 8 of the Constitution), Marshall ruled that federal law reigned supreme over state law in all matters of interstate commerce.
Marshall’s broad definition of “commerce” included transportation, rendering New York’s law unconstitutional.
The ruling in Gibbons v. Ogden helped lead to a broad expansion of federal power at the expense of the states. Many future court rulings would use the court case as precedent to further expand federal power into what we currently recognize in the present day.
Background of the Case
The origins of the case began near the turn of the century. In 1798 the influential Robert Livingston partnered with steamship inventor Robert Fulton to obtain a license guaranteeing exclusive rights to commercial steamboat transportation along the Hudson River.
It is important to note that the license was granted via the New York state legislature, not from a federal means. This is significant as the Hudson River lies between the states of New York and New Jersey.
New York’s license to Livingston/Fulton essentially blocked all New Jersey businesses from utilizing the Hudson for commercial ventures.
However, by 1812 newly-elected Federalist New Jersey Governor Aaron Ogden recognized there was money to be made from steamship transport. Capitalizing on New York’s territorial claims of the entirety of the Hudson River, Ogden influenced the passage of a New Jersey law in 1813 that gave him a countervailing monopoly and prevented Livingston/Fulton from docking on the New Jersey side of the river.1
By 1815 Ogden and the Federalists were ousted from leadership in New Jersey. This mirrored the waning of Federalist power in the Northeast, particularly after the disastrous Hartford Convention of 1814.
The New Jersey law was overturned and Ogden lost his countervailing monopoly. The man did not give up and continued to be a thorn in Livingston and Fulton’s sides. Eventually, Livingston agreed to give Ogden a license to operate a steamship route under their monopoly in late 1815.1
Soon Ogden entered into a partnership with a wealthy planter and lawyer from Georgia, Thomas Gibbons. The partnership would last nearly 3 years, but they eventually split over personal reasons.
Gibbons then established his own rival steamboat line on the Hudson River in direct competition with Ogden after obtaining a federal license to operate under the 1793 Coasting Act.1
Ogden believed this to be in violation of his license under the New York monopoly and sued Gibbons in New York court.
After New York ruled in favor of Ogden, twice, Gibbons appealed to the Supreme Court over the decision.
Gibbons v. Ogden Summary
From February 3rd – 9th, 1824, the Supreme Court heard arguments from both parties. Gibbons was represented by the stalwart team of US Attorney General William Wirt and Congressman Daniel Webster.
Wirt and Webster’s strategy was to address the issue in the most simplified matter. Who had the right to regulate transportation of personal and commercial property from state to state? The federal government or state governments?2
New York’s law gave a monopoly to operate steamboat transportation along the Hudson River to certain licensed individuals granted solely by New York state. As the Hudson River bisected multiple states (New York and New Jersey) this NY law was in direct conflict with the Federal Coasting Act of 1793.
Chief Justice John Marshall and a unanimous Supreme Court agreed with Webster’s arguments and ruled in favor of Gibbons. Gibbons v. Ogden is considered a landmark decision as it was the first commercial case brought before the Supreme Court.1
In Marshall’s written opinion the federal government had exclusive power over interstate commerce and declared New York’s law granting a monopoly to be unconstitutional. Gibbons would be allowed to resume his steamboat route.
While interpreting the law the Supreme Court established a broad interpretation of the Commerce Clause in the US Constitution (Article I Section 8). Marshall opined that the word commerce did not simply stop at mere articles of trade but meant “intercourse” between states, which included navigation.2
Marshall admitted that the Constitution did not specifically grant Congress the power to regulate navigation on interstate waterways. However, as virtually all states were connected by waterways, commerce would be virtually impossible without utilizing them.
Therefore, in order for Congress to proficiently regulate interstate commerce, it was “Necessary and Proper” for Congress to regulate interstate navigation as well.
What did Gibbons v. Ogden Reinforce?
The Supreme Court decision in Gibbons v. Ogden reinforced that federal law is the supreme law of the land and that states must yield to it when in conflict (Article VI Clause 2 of US Constitution).
The landmark case also helped to further define and reinforce the relationship between federal and state powers as it relates to commerce.
Prior to the ruling many states saw commercial federal laws and licenses as supplemental to state laws without superseding them. Marshall clarified that relationship, as well as the word “among” in the Commerce clause.3
“[The Congress shall have Power] to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes”
Marshall defined “among” to simply mean more than one state. Therefore, anytime commerce could be defined as crossing a state’s external boundary, it could be considered under the authority of Congress.
The Court stopped far short of a complete federal overhaul of commerce in admitting that states had the authority to regulate commercial transactions before and after they entered commerce among the states.3
More to the case at hand, Marshall reinforced that navigation and transportation were included under the generic term of Congress.
Marshall justified this stance by arguing that transportation between locations was a right given throughout history, dating as far back as the Magna Carta.1
“That right derives its source from those laws whose authority is acknowledged by civilized man throughout the world. This is true. The Constitution found it an existing right, and gave to Congress the power to regulate it.”
Under the Articles of Confederation, states had the power to regulate commerce and navigation. The result was a disaster as disagreements between states severely hampered trade and limited growth and progress.
Marshall thus interpreted that with the Constitution, the founders’ intent was clearly to give the federal government the power to regulate interstate commerce—including navigation.
What was the Impact of Gibbons v. Ogden?
Although the Supreme Court decision had immediate ramifications, the true impact of Gibbons v. Ogden came from future expansion of federal regulatory control over interstate commerce.
As far as immediate impacts go, Aaron Ogden was devastated by the ruling. The consistent legal battles left him bankrupt and he briefly spent time in debtors’ prison for it.2
On the other end the decision was a boon for politicians that embraced an expansion of federal powers. Henry Clay’s American System in particular received a boost from the ruling as the federal government could now undeniably regulate interstate commerce, including a system of national roads, bridges, and canals.
The Supreme Court decision also ushered in an age of laissez-faire interstate shipping as federal enrollment and licensing were freely available. It would not be until decades later that states were permitted to implement their own regulations on shipping.3
The largest impact from Gibbons v. Ogden has come in the form of future rulings where the Supreme Court used the case as precedent.
The case has been frequently cited to increase federal regulatory control over commerce into the modern age. One such example is with the Interstate Commerce Act of 1887 which established Congressional regulatory power over the railroad industry.
In addition, the court further expanded federal powers as understood in Marshall’s decision through a vast array of New Deal programs in the 1930s-40s.4
In one case, Wickard v Filburn, the Supreme Court ruled that the federal government could control an individual farmer’s production even if that farmer did not engage in interstate commerce.
The precedence set in Gibbons v. Ogden has had a clear impact on the modern-day relationship between federal and state regulatory power over commerce.
To learn more about US history, check out this timeline of the history of the United States.
1) BIRKNER, MICHAEL. “Samuel L. Southard and the Origins of ‘Gibbons’ v. ‘Ogden.’” The Princeton University Library Chronicle, vol. 40, no. 2, Princeton University Library, 1979, pp. 171–82, https://doi.org/10.2307/26402287.
2) Fred’k H. Cooke. “The Gibbons v. Ogden Fetish.” Michigan Law Review, vol. 9, no. 4, The Michigan Law Review Association, 1911, pp. 324–33, https://doi.org/10.2307/1274949.
3) Morrison, Fred L. “The Right to Fish for Seacoast Products: Gibbons v. Ogden Resurrected.” The Supreme Court Review, vol. 1977, University of Chicago Press, 1977, pp. 239–56, http://www.jstor.org/stable/3109513.
4) Charles F. Hobson. The William and Mary Quarterly, vol. 71, no. 1, Omohundro Institute of Early American History and Culture, 2014, pp. 125–28, https://doi.org/10.5309/willmaryquar.71.1.0125.