Gibbons v. Ogden (1824)

Oct 23

Several U.S. Supreme Court cases decided during John Marshall’s tenure as Chief Justice required the Court to interpret and apply constitutional clauses for the first time. Gibbons v. Ogden (1824) is such a case. A dispute between owners of two shipping companies compelled the Court to interpret the Commerce Clause of Article I, Section 8 for the first time. Chief Justice John Marshall wrote the Court’s opinion that has itself been interpreted as a broad reading of the Commerce Clause that put the Court’s Commerce Clause case law on a trajectory that greatly expanded Congress’s power to regulate not only commerce, but also activities that are tangentially and indirectly related to commerce or the flow of commerce. A close reading of the case suggests that this interpretation is overstated. Coupled with McCulloch v. Maryland (1819), Gibbons v. Ogden inflamed a debate about how strictly Justices of the Court should read and interpret the Constitution that has been a part of American politics for two centuries.

Constitutional Issues Presented by Gibbons v. Ogden

The events surrounding Gibbons v. Ogden touched a number of potential constitutional issues. In the years leading up to the case, patents had been issued for new technology that were part of the steamboat invention. Article I, Section 8, gives Congress the power to create patent laws. In addition, New York granted a monopoly to some steamboat operators that excluded others. The status of monopolies is unclear in the Constitution. Prohibiting them was discussed at the Constitutional Convention, but no provision in the Constitution expressly does so. Finally, there was the question of commercial regulation that divided into two distinct issues. One was the question of what constituted commercial activity and whether navigation was part of commerce. The other was a matter of legal jurisdiction. In other words, as a legal matter it was important not only to identify an activity as commercial or noncommercial, but to determine which level of government was authorized under the U.S. Constitution to regulate the commerce in question. This final issue was complicated by the fact that in a federal system of government some powers are not exclusive (held by one level of government) but concurrent (shared by more than one level of government). In cases of concurrent power, courts have to decide which level of government was superior in instances of conflicting government action. The Commerce Clause was likely to be the focal point of resolving disputes relating to federalism and defining commerce.

Facts of the Case

The legal controversary in Gibbons v. Ogden stems from a New York monopoly granted to John Fitch for the purpose of navigating steamboats on New York waters. When Fitch could not capitalize on his monopoly rights, they passed to Robert Livingston and Robert Fulton. Aaron Ogden operated a business that used wind power to transport people in the New York Harbor, to and from New York and New Jersey. He later converted his ferry to steam power in 1812 and secured from Livingston and Fulton the right to operate it in the waters between New York and New Jersey. Thomas Gibbons created a ferry business in 1816 that competed with Odgen’s business. While Gibbons and Odgen collaborated in a partnership linked to Ogden’s ferry business, they eventually ended their partnership over a feud regarding Gibbon’s daughter. Gibbons left the partnership with Ogden and started a separate steamship business. Gibbons was intent on challenging the Livingston-Fulton monopoly from which Ogden benefited. The business rivalry and personal dispute reached their pinnacle when Gibbons challenged Ogden to a duel and New York seized Gibbons’s steamboats after Ogden asked for an injunction against Gibbons in New York chancery court.

Chelf Justice Marshall’s Opinion

The Court’s opinion was written by Chief Justice John Marshall at a time when the Court was in transition. In the early years of the Marshall Court, the chief justice led a Court that was appointed by Federalist presidents Washington and Adams. The Justices were closely aligned in their views of constitutional law, making it easier for Marshall to build consensus and orchestrate unanimous rulings. By 1824, Presidents Jefferson, Madison, and Monroe had appointed six Justices to the Supreme Court. When Monroe appointed Smith Thompson in 1823 (who did not participate in Gibbons v. Ogden), he replaced Justice Henry Brockholst Livingston who was appointed by Jefferson. Yet, that meant that five of the seven Supreme Court Justices in 1824 had been appointed by Democratic-Republican presidents. As a Federalist-appointed Justice, Marshall was in the minority when Gibbons v. Ogden came to the Supreme Court. In that context, consensus building required greater compromise as was apparent in the Court’s ruling.

Marshall considered the suggestion made by Ogden’s counsel that the Constitution should be interpreted in such a way as to construe the federal government’s powers narrowly. He asked: “But why ought they to be so construed?” Marshall noted that the Constitution does not mandate a particular method of constitutional interpretation. He rejected strict or narrow construction of constitutional meaning, adding that the Framers did not disguise their intentions. Rather, they employed “the words which most directly and aptly express the ideas they intend to convey.” They used “words in their natural sense” and “intended what they have said.” In Article I, Section 9, the Framers limited Congress’s commerce power pertaining to duties charged in state ports. This limitation was clear evidence, Marshall argued, that the Framers intended navigation as part of commerce. What sense would it make to limit a power that Congress did not possess?

It is common to read Marshall’s opinion in Gibbons as interpreting the Commerce Clause broadly to the advantage of the national government and to the detriment of the states. There is a degree of truth to this claim, but it is also true that Marshall did not push Congress’s power to regulate commerce to an extreme. In his concurring opinion Justice Johnson claimed that Congress held exclusive power to regulate commerce. Marshall stopped short of such a claim. While both Justices agreed that Congress’s commerce power was superior to that of the states, Marshall’s opinion left more room for state control of commerce. States were free to regulate commerce within their respective borders that did not affect interstate or international commerce. Marshall stated that the “completely internal commerce of a state…may be considered as reserved for the state itself.” However, the line separating federal and state commerce power was blurry. In regulating interstate and international commerce, Congress’s power “does not stop at the jurisdictional lines of the several states.” Geographical boundaries were insufficient to determine the boundaries of constitutional power.

The Court’s Resolution of the Legal Conflict

The immediate legal conflict in Gibbons required the Court to determine if the federal Coasting Licensing Act, under which Gibbon’s ships were licensed, was in conflict with New York’s laws creating a monopoly that protected Ogden’s shipping business from competition. It also required the Court to determine if navigation and conveyance of passengers constituted commercial activity. The Court ruled that both navigation and conveyance of passengers were commercial activity that Congress was constitutionally empowered to regulate. Moreover, under the Supremacy Clause, when federal and state law were in conflict the federal law is superior. Consequently, the New York monopoly was unconstitutional, and the state could not prohibit Gibbons from operating his steamship in the New York Harbor. It did not matter, as Ogden’s attorneys argued, that the 1793 federal law was created without expressly including steamship technology. Nor did Marshall believe that the Court needed to determine if the New York monopoly law infringed on Congress’s patent power. Once the Livingston-Fulton monopoly was deemed unconstitutional using the Commerce Clause and the Supremacy Clause, the patent issue was moot. Gibbons won the case, but Ogden was not left empty-handed.

The Court’s precedent did not bar states from regulating interstate and international commercial activity as many economic nationalists had hoped. It did give Congress primacy, but it did not exclude states from commercial regulation. Congress’s power to regulate commerce existed in an obscure middle ground between exclusive and concurrent control. Economic nationalists would have to wait until the New Deal to get what they wanted from the Supreme Court. In that context, Congress’s commerce power was less apt to be used to remove impediments to economic development and more likely to be used to restrict business, protect labor interests, and promote progressive economic policy. While Chief Justice Marshall was inclined to follow the Framers’ original intent while centralizing power in accordance with securing the union, progressive Justices in the twentieth century were inclined to reject originalism in favor of living constitutionalism for the purpose of validating the welfare state and the war state.