Gibbons v. Ogden 1824

Appellant: Thomas Gibbons

Appellee: Aaron Ogden

Appellant's Claim: That a New York state law granting exclusive rights to individuals to operate steamships in New York waters while conducting interstate commerce violates the Constitution's Commerce Clause.

Chief Lawyers for Appellant: Thomas A. Emmet, Thomas J. Oakley

Chief Lawyers for Appellee: William Wirt, Daniel Webster, David B. Ogden

Justices for the Court: Gabriel Duvall, William Johnson, Chief Justice John Marshall, Joseph Story, Thomas Todd, Bushrod Washington

Justices Dissenting: None (Smith Thompson did not participate)

Date of Decision: March 2, 1824

Decision: Ruled in favor of Gibbons by finding that steamship navigation is part of commerce and that states could not pass laws regulating steamship traffic operating between two or more states.

Significance: The landmark ruling was the first to interpret federal powers under the Constitution's Commerce Clause. It provided a broad interpretation of what is commerce under the clause, holding that commerce was more than simply the buying and selling of goods and forming the basis for numerous rulings involving the Commerce Clause throughout the history of the United States.

"D inner will be served at exactly 2 o'clock . . . Tea with meats . . . Supper at 8 in the evening . . . A shelf has been added to each berth, on which gentlemen will please put their boots, shoes, and clothes, that the cabin will not be encumbered." So read a handbill distributed to passengers on Robert Fulton's (1765–1815) steamship operating on the Hudson River in New York state.

Authority Over Interstate Commerce

Government regulation of business was a deep concern of colonists who had been subjected to the burdensome tax policies of Great Britain, a major issue leading to the Revolutionary War (1775–1783). Fear of national government control of local businesses led the colonists to be very restrictive in granting trade regulation power to a national government when drafting the Articles of Confederation in 1781. The only trade control given to Congress was that concerning trade with Indians. Regulation of interstate and foreign trade was reserved to the individual states. However, business competition between the states grew intense. Each state was more eager to build their own prosperity than seek agreement on trade policy. They each had their own tariff (import tax) policies on goods coming from other states or foreign countries. To further complicate matters, each state held authority to make their own money. Having thirteen currencies greatly inhibited trade. Another problem for businessmen was trying to collect on their bills when interstate trade was conducted. Local courts often proved protective of local businesses from their distant creditors.

The resulting chaotic trade situation was soon widely recognized as a major problem for the economic growth of the new nation. As a result the Framers of the U.S. Constitution during the Constitutional Convention of 1787 with little debate gave broader commerce powers to Congress. Commerce is commonly the conducting of economic trade or business between cities, states, or foreign nations. Clause 3 of Article I states that "Congress shall have the power . . . to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." The Supreme Court was not called upon to rule on the scope of the Commerce Clause until over thirty years later in 1824.

Rise of Steamship Commerce

A major new technology at the beginning of the nineteenth century began to make a major impact on interstate and foreign travel and trade, the steam engine. In 1798 the state of New York passed a law giving Robert R. Livingston exclusive right to navigate steamboats in state waters. Exclusive use means no other business can hold the same right to operate steamships in those waters. It becomes a business monopoly. By 1802 Livingston took on inventor Robert Fulton as a partner. Fulton adapted a steam engine for large ships to carry passengers, greatly expanding the potential of earlier steam powered boats. Fulton and Livingston could also issue licenses to others to operate steamships in New York waters. Experiencing great success, they received the same type of grant in 1811 from the state of Louisiana. As a result, Fulton and Livingston controlled steamship access to two of the major seaports and waterways in the United States, New York City at the mouth of the Hudson River and New Orleans at the mouth of the mighty Mississippi River.

"OUR OVERWORKED SUPREME COURT"

C artoonist Joseph Keppler depicted "Our Overworked Supreme Court" in a cartoon with that caption published in the humor magazine Puck on December 9, 1885. The scene showed the Supreme Court justices awash amidst a pile of paper. It symbolized the extraordinary caseload in which the court was regularly mired at the time.

In the Supreme Court of John Jay, the first chief justice (1789-95), the caseload was light, and Justices often spent time on administrative matters. By the time of the Civil War, the size of the docket had grown to some three hundred cases. By 1885, the Court was swamped with more than thirteen hundred cases.

In 1891, Congress passed the Circuit Court of Appeals Act, which established the appellate court system as a buffer between the lower courts and the High Court.

As more businessmen entered the steamship transport business, they too struck similar exclusive use deals with other states. As the new nation was rapidly expanding inland, the transportation of goods from one state to another involved different steamship companies in each state and became increasingly difficult. Public irritation over such inconvenience arose.

Aaron Ogden and Thomas Gibbons

In 1815 Aaron Ogden, a former New Jersey governor from 1812 to 1813, was in a struggling business partnership with Thomas Gibbons. Ogden purchased a license from Livingston to operate a steam-driven ferry line between New York City and Elizabethtown, New Jersey. Soon Gibbons began running his own steamships between New York and New Jersey, in direct competition with Ogden. Gibbons had obtained a license to operate his boats from the federal government under the Coastal Licencing Act of 1793 to operate in a "coasting" trade.

In 1819, Ogden sought a court injunction to block Gibbons' steamships from navigating in New York waters. Ogden claimed New York state law protected his monopoly and took precedence (priority) over the federal law. Gibbons countered that federal laws constitutionally overrode individual state laws.

A New York state court ruled in favor of Ogden by finding the state law took precedence in this case. The court asserted that federal commerce powers did not apply because ship navigation was not commerce. Only a federal law specifically regulating navigation could override the state steamship law, and no such law existed. The court issued the injunction ordering Gibbons to stop operating his steamships in New York waters. An injunction is a court order to stop an action from happening.

Supreme Court

Gibbons appealed to the U.S. Supreme Court. The case drew public attention for it pitted the Federalists who believed in establishing a strong national government against states' rights proponents, including former president Thomas Jefferson (1801–1809). Daniel Webster, famed lawyer and orator, presented Gibbons' case. Webster eloquently argued "that the power of Congress to regulate commerce was complete and entire, and, to a certain extent . . . exclusive." Also, he contended the term commerce included navigation necessary to conduct business transactions. Therefore, Gibbons' federal license took priority over New York law.

Chief Justice John Marshall, writing for the Court, saw things differently from the lower court and agreed with Webster. He saw the key question before the Court was just what kinds of activity did the Commerce Clause include. Also, could states regulate interstate commerce within their own waters? Marshall asserted three major points. First, the term "Commerce" in the Constitution was not just simply restricted to the actual buying and selling of goods. It included navigation too when used to promote such buying and selling. Secondly, steamships significantly helped trade between states, hence were a part of interstate commerce when operating between two or more states. Thirdly, states could not pass laws restricting commerce between states, since this power was exclusively given to Congress by the Commerce Clause. Marshall declared that a primary objective in forming the federal government was authority to regulate interstate and foreign commerce. Marshall wrote, "The power over commerce, including navigation, was one of the primary objects for

JOHN FULTON AND THE STEAMSHIP

T he Gibbons v. Ogden decision acknowledged the importance of steamship traffic to interstate commerce in the young nation. The ruling opened commerce to a wide range of steamship companies, thus promoting nationwide steamship travel and trade. The earliest steamboats began navigating on the Delaware River out of Philadelphia in 1787, but they were not commercially practical.

Robert Fulton (1765–1815), an American inventor, engineer, and artist, designed and built the first commercially successful steamboat in 1807, the Clermont. First he was interested in designing canal boats and a submarine in the 1790s. Having seen experimental steamships in France, Robert R. Livingston, the U.S. minister to France, interested Fulton in 1803 in the prospects of using steam engines on ships. Fulton ordered a steam engine from Britain and brought it to the United States in 1806. On August 17, 1807, the Clermont made its first successful voyage up the Hudson River from New York City to Albany. Soon the ship began providing passenger service on the river. Fulton later designed the first steam-operated warship, Fulton the First, to protect New York harbor in the War of 1812 (1812–1814) but died before its construction was completed. Fulton had greatly affected the growth of commercial trade in the nation and his statue now stands in Statutory Hall in the nation's Capitol Building.

which the people . . . adopted their government." States retained the power to regulate "completely internal commerce [that] . . . does not extend to or affect other states." When a state law regulating commerce comes in conflict with a federal law, the federal always takes priority.

The lower court's ruling was overturned. Marshall dismissed the injunction against Gibbons and ruled the New York state law invalid since it was in conflict with the federal coastal licensing law.

From Steamships to the Internet

Despite the general acceptance of the Commerce Clause by the Framers of the Constitution, the Clause became the subject of more court cases than any other Congressional power. The publicly popular Gibbons decision has been called "the emancipation proclamation of American commerce." Interstate commerce was freed from the jumble of various restrictions imposed by numerous state governments. The decision established the importance of regulating interstate commerce by a central governmental authority, the national government rather than individual state or local governments.

States' rights proponents, including Jefferson, feared the decision would mark a trend toward the federal government taking over all rights believed reserved to the states. The broadening of commerce to include navigation provided a basis for later decisions involving communications, transportation, and manufacturing. Also, the ruling paved the way to consider new technologies that would come along as interstate commerce. Technologies never imagined by the Framers of the Constitution would include railroads, telegraphs, telephones, pipelines, airplanes, and by the 1990s, the Internet. Each new technology has relied upon the Gibbons ruling to protect their right to operate efficiently between states. By 2000 little economic activity remained beyond the regulatory authority of Congress under the Commerce Clause.

Suggestions for further reading

Baxter, Maurice G. The Steamboat Monopoly, Gibbons v. Ogden, 1824. Philadelphia: Philadelphia Book Co., 1972.

Flexner, James T. Steamboats Come True: American Inventors in Action. Little Brown, 1978.

Philip, Cynthia O. Robert Fulton: A Biography. Watts, 1985.