This Supreme Court decision forbade states from enacting any legislation that would interfere with Congress's right to regulate commerce among the separate states.
Robert Fulton’s 1807 invention of the steamboat was highly significant,
but its application would have been severely limited had the Supreme Court not
ruled against the monopoly in interstate steamboat operation in Gibbons v.
Ogden. In this decision, Chief Justice John Marshall’s Court ruled
that Congress has the power to “regulate commerce” and that Federal
law takes precedence over state laws.
The State of New York passed a law giving Robert Fulton and Robert Livingston
a monopoly on steamboat traffic on the Hudson Bay, "navigating all boats
that might be propelled by steam, on all waters within the territory, or jurisdiction
of the State, for the term of twenty years." Fulton and Livingston issued
permits and seized boats that operated without their endorsement.
Aaron Ogden had a license from the State of New York to navigate between New
York City and the New Jersey Shore. Ogden found himself competing with Thomas
Gibbons, who had been given permission to use the waterways by the Federal Government.
After the State of New York denied Gibbons access to the Hudson Bay, he sued
Ogden.
The case went to the Supreme Court, and Chief Justice Marshall's opinion carried
out the clear original intent of the Constitution to have Congress, not the
states, regulate interstate commerce. Marshall’s decision sustained the
nationalist definition of Federal power and ruled that Congress could constitutionally
regulate many activities that affected interstate commerce.
In the wake of this decision, the Federal Government, empowered by the Constitution’s commerce clause, increasingly exercised its authority by legislation and judicial decision over the whole range of the nation’s economic life.
