The Supreme Court Case of Gibbons v. Ogden

Gibbons v. Ogden set a precedent

Gibbons v. Ogden was heard by the Supreme Court way back in 1824. It was considered a landmark decision with ripple effects that lasted more than 100 years. 

Background of Gibbons v. Ogden

The dispute began when Aaron Ogden was awarded an exclusive license to operate a steamboat between New York and New Jersey. Sometime later, the federal government gave Thomas Gibbons a license for the same route.

Ogden and Gibbons were partners in the steamboat navigation industry, but their business was short-lived.

Ogden felt that Gibbons undercut their business when he ran one of his privately-owned steamboats on the route claimed by Ogden that ran between Elizabethtown Point in New Jersey and New York City. This was the route that had been awarded to Ogden by Congress under the terms of a 1793 law, the Federal Coasting Act. The Ogden-Gibbons partnership was dissolved within three years. 

Ogden then filed suit with the New York Court of Errors, and the court awarded sole use of the route to him in 1820. Thomas Gibbons then took the case to the Supreme Court where they overturned the state decision. The question was whether the State of New York had a constitutional right to make such a ruling, which should have been reserved for Congress because the route in question constituted interstate commerce.

Some of the Parties Involved

A few famous names were involved in the legal battle. Gibbons was represented in the case by Daniel Webster.

Cornelius Vanderbilt worked for Gibbons, first as a ferry captain then, later, he managed Gibbons' business. The route in dispute was originally granted to Robert Fulton in 1808 – in fact, New York essentially gave him exclusive use of all the waters in the state, along with his partner, Robert Livingston.

The Decision 

The Supreme Court decision was unanimous. The Court ruled that Congress alone had the right to regulate and coastal trade. Two issues were hotly debated: First, what, exactly, was "commerce"? And second, what did the term "... among the several states" mean? The phrases were pivotal excerpts from the federal Commerce Claus.

The Court decided that commerce is the actual trade of commodities and that navigation fell under this far-reaching umbrella. The justices also decided that the word "among" meant "intermingled with." In other words, one or more states had an active hand in the commerce that was in dispute. As such, the Court ruled in favor of Gibbons. The actual decision read:

"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."

The Significance of Gibbons v. Ogden  

This decision not only provided the federal government with the ability to regulate interstate commerce, but it set a foundation for future disputes regarding the authority of the federal government over states' rights.

It said that New York had no right to award such licenses and that the federal government was the final ruling authority over such things. The ruling was later used as a basis for the Civil Rights Act of 1964, which most notably gave the federal government the right to make certain laws affecting and binding all 50 states.