Gibbons v. Ogden: Defining Congress’ power under the Commerce Clause

Today marks the anniversary of the Supreme Court’s landmark decision in Gibbons v. Ogden. Decided in 1824, Gibbons was the first major case in the still-developing jurisprudence regarding the interpretation of congressional power under the Commerce Clause.

The extent and nature of Congress’s power to “regulate commerce with foreign nations, and among the several states” has generated extensive debate among legal scholars and jurists since the early republic and is perhaps the most contentious of the explicit powers granted to Congress in Article 1, Section 8 of the Constitution. A judge’s interpretation of the Commerce Clause plays an important role in his or her approach to the Constitution; indeed, one’s understanding of the clause informs how one views the power of the federal government and its relationship to state and local entities—otherwise known as federalism.

Aaron Ogden owned a steamboat company that offered commercial service between various ports in New York and New Jersey. New York state law granted a monopoly on steamboat operations within its waters to a limited number of businessmen, including Ogden, and it fined any operators who violated the restriction.

Thomas Gibbons, Ogden’s former business partner, had a steamboat business based in New Jersey that maintained commercial routes between New York and New Jersey, but he was excluded from the monopoly. A New York state court granted an injunction against Gibbons, ordering that he cease commercial operation in New York waters. Naturally, Gibbons appealed the case, which was eventually heard by the U.S. Supreme Court.

At the Court, Gibbons pointed to the fact that he obtained a license from the federal government to conduct his steamboat business between ports in New York and New Jersey in accordance with the federal Coasting Act of 1793. He argued that the monopoly maintained by New York law and the injunction granted by the New York court seemed to conflict with this act of Congress, and should be struck down in accordance with the Supremacy Clause.

A unanimous decision from the Supreme Court did just that. Chief Justice John Marshall spent a majority of the written opinion investigating whether or not Congress had the authority to regulate and license commercial maritime activity under the Commerce Clause.

The Court held that the “power to regulate commerce extends to every species of commercial intercourse … among the several states,” and included the regulation of interstate commercial maritime routes. Marshall asserted that this kind of power is covered under the Commerce Clause because the Founders intended as much when they authored the Constitution.

More generally, the Court articulated in Gibbons an understanding of the Commerce Clause that gave the federal government considerable regulatory power. It determined that the power to regulate commerce “is complete in itself . . . and acknowledges no limitations, other than are prescribed in the Constitution.” Marshall further clarified that Congress can regulate matters internal to a state that are fundamentally intertwined with interstate commerce, like the New York monopoly.

However, the Court stopped short of adopting an overly expansive reading of the clause and determined that the regulation of matters wholly confined within a state, like inspection and health laws, cannot be regulated by Congress.

In a separate concurring opinion, Justice Johnson advocated for a more expansive reading of the Commerce Clause. In a foreshadowing of future constitutional debates, he rejected a “strict or literal” approach to the text of the Constitution. Furthermore, he suggested that the Commerce Clause should be interpreted expansively to ensure “the advancement of society.”

Since the 1824 decision in Gibbons v. Ogden, the Court’s understanding of Congress’s power under the Commerce Clause has expanded tremendously. This evolution was particularly dramatic in the New Deal era, when the Court adopted a broader view of Congress’s interstate commerce powers and upheld many of President Roosevelt’s economic programs.

For example, the Court, in Wickard v. Filburn, that the Commerce Clause empowered Congress to regulate intrastate activities if this sort of activity, in aggregate, affects interstate commerce. In that case, the Court allowed Congress to regulate the wheat production of a farmer, even though the wheat was intended strictly for personal use and would not enter the interstate market, on the basis that farming, in general, has an aggregate effect on the national economy.

A more recent case about Congress’s interstate commerce power was the 2012 challenge to the so-called “individual mandate.” In his majority opinion, Chief Justice John Roberts said in National Federation of Independent Business v. Sebelius that the Commerce Clause does not give Congress the power to regulate economic inactivity. In light of this interpretation, penalties resulting from a failure to buy health insurance had to be justified under Congress’ taxing power, rather than its interstate commerce powers.

Given the importance of the Commerce Clause in today’s constitutional and political discourse, the decision in Gibbons v. Ogden continues to reverberate today. As a landmark ruling that precipitated and foreshadowed central debates of constitutional law, Gibbons v. Ogden was an important milestone in the development of congressional power into what we now observe.