Does a state-granted monopoly on steam navigation of its waters violate the Commerce Clause and conflict with federal law when it bars a vessel licensed under federal coasting laws from navigating those waters by steam?

The New York Legislature granted Robert R. Livingston and Robert Fulton the exclusive right to navigate state waters with steam- or fire-propelled boats for a term of years. Aaron Ogden (respondent) derived title from Livingston and Fulton to run steamboats between Elizabethtown, New Jersey, and New York City. Thomas Gibbons (appellant), who also operated steamboats on that route, owned two steamboats, the Stoudinger and the Bellona, that ran between New York and Elizabethtown. Gibbons' vessels were enrolled and licensed under the federal act of February 18, 1793, to carry on the coasting trade. Ogden sued in the New York Court of Chancery to enjoin Gibbons from operating his steamboats in New York waters in violation of the monopoly. Gibbons answered that his federal licenses entitled him to navigate those waters notwithstanding the state grant. The Chancellor held the New York laws valid and perpetuated the injunction.

Ogden filed a bill in the New York Court of Chancery seeking an injunction against Gibbons. After Gibbons answered, the Chancellor held that the state monopoly laws were not repugnant to the Constitution or federal law, and perpetuated the injunction. The Court for the Trial of Impeachments and Correction of Errors, New York's highest court of law and equity, affirmed the decree. Gibbons appealed to the United States Supreme Court.

(Marshall, C.J.)

Yes. The New York monopoly laws are unconstitutional as applied to vessels licensed under federal coasting law, and the decree is reversed.

Commerce under Article I, Section 8 is more than buying and selling; it is intercourse, and it necessarily includes navigation. This understanding is confirmed by the Constitution's own text and by uniform practice. The Constitution forbids preferences to the ports of one state over another and forbids obliging vessels bound to or from one state to enter, clear, or pay duties in another. The embargo laws and the navigation laws were likewise universally treated as commercial regulations. The power to regulate navigation is therefore expressly granted as part of the power to regulate commerce.

The power reaches commerce with foreign nations and commerce 'among the several States.' 'Among' means intermingled with, so commerce among the states does not stop at a state's boundary line and may be regulated within a state's interior. The power does not extend to commerce completely internal to a single state that does not affect other states. Congress's power to regulate commerce is plenary, is limited only by restrictions found in the Constitution itself, and is checked by the political process rather than by state authority.

The Court did not resolve whether states hold a residual concurrent power to regulate commerce. It found that question unnecessary because, even assuming such power, a state law that collides with an act of Congress must yield under the Supremacy Clause. State inspection, quarantine, health, pilotage, and internal-commerce laws are exercises of the state police power, not regulations of interstate commerce, and may stand unless they conflict with federal law.

The federal coasting act confers an affirmative right. The 1793 act declares that enrolled and licensed vessels are entitled to the privileges of vessels employed in the coasting trade, and the license itself states that the vessel is licensed 'to be employed in carrying on the coasting trade.' The license is not merely proof of American character; enrollment supplies that. The license authorizes the voyage. The Court did not decide whether carrying passengers is part of the coasting trade, because the case concerned only steam propulsion, though it said that carrying passengers alone would not necessarily take a vessel outside that trade. The 1812 act providing for the enrollment and licensing of steamboats confirms that steam-propelled vessels hold the same rights as sailing vessels. The New York laws, by barring a federally licensed vessel from New York waters because it is propelled by steam, directly collide with the federal license and are void to that extent. The Court therefore did not reach the patent and copyright clause argument.

Concurrence (Johnson, J.) The power to regulate commerce is exclusively vested in Congress and is the very power that states exercised before the Constitution. Because the power to set the limits of commercial freedom necessarily implies the power to decide what remains unrestrained, it can reside in only one sovereign. The grant of that power carried the whole subject away from the states. Navigation is the thing itself, inseparable from commerce, and Congress's power includes the transportation of both goods and passengers. The federal coasting license is not the foundation of Gibbons' right; it is chiefly an exemption conferring certain privileges, and the right of free commercial intercourse among the states would exist even if the licensing act were repealed. Health, inspection, ferry, and turnpike laws are municipal police measures or commercial facilities, not regulations of commerce, and may coexist with the commercial power despite incidental overlap. Section 10 of Article I, by limiting even state laws that Congress consents to, supports exclusivity rather than concurrency. Johnson declined to decide the extent of state power to grant patents for inventions.