- In 1808, the State of New York granted Robert R. Livingston and Robert Fulton exclusive navigation privileges of all the waters within the jurisdiction of that State for a 30 year term.
- Livingston and Fulton also petitioned other states and territorial legislatures for similar monopolies, hoping to develop a national boat network. Only the Orleans Territory did so, awarding them a monopoly on the lower Mississippi River.
- Competitors challenged Livingston and Fulton by arguing that the commerce power of the Federal government was exclusive and superseded state laws.
- In 1815, Aaron Ogden purchased a license from Livingston and Fulton and entered into business with Thomas Gibbons from Georgia. This partnership collapsed after 3 years, however, when Gibbons operated another steamboat on Ogden’s route between Elizabethtown, New Jersey, and New York City, that had been licensed by the United States Congress under a law regulating coastal trade.
- Ogden filed a complaint in the New York courts, successfully seeking an injunction. Gibbons appealed to the Supreme Court, arguing that the state laws were inconsistent with the Federal Government’s.
Can states pass laws that challenge the power of Congress to regulate interstate commerce?
- The US Supreme Court held in favour of Gibbons.
- Congress has the right to regulate interstate commerce. The source of Congress’s power was the Commerce Clause of the US Constitution.
- The Commerce Clause states that “[Congress shall have Power] to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribe“
- Given the above, the Court had to decide whether the law regulated “commerce” that was “among the several states.” Further, the Court created a wide definition for “commerce”, reasoning that the term encompassed more than just selling and buying. With respect to “commerce“, the Court held that commerce is more than “mere traffic“—commerce is the trade of commodities. This broad definition includes navigation. The Court interpreted “among” as “intermingled with“.
- As a result, the Court held that it is the role of the federal government to regulate commerce and that state governments cannot develop their own commerce regulating laws. The Court determined that regulating water navigation was an act that regulated commerce.
“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 full text is available here: https://supreme.justia.com/cases/federal/us/22/1/
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