Pre New Deal Gibbons V. Ogden – New York steamboat monopoly

• Marshall 1824. This was the first major case construing the Commerce Clause. Although the Gibbons opinion contained some discussion of the Commerce Clause as a limitation upon state powers, its principal interest is for its broad-sweeping view of congressional power under that clause. [Discussion of Congressional power here arguably is all dictum.]

• Facts: Ogden acquired, by a grant from the NY legislature, monopoly rights to operate steamboats between NY and NJ. Gibbons began operating steamboats between NY and NJ, in violation of Ogden’s monopoly; Gibbons’ boats were licensed, however, under a federal statute. Ogden obtained an injunction in a NY court ordering Gibbons to stop operating his boats in NY waters.

• Holding: Marshall found the injunction against Gibbons invalid, on the ground that it was based upon a monopoly that conflicted with a valid federal statute, and thus violated the Supremacy clause. [Koppelman: the relevant federal statute licensing vessels in coasting trade is clearly constitutional, though it is not clear as to whether it is preemptive. Marshall probably stretched federal statute to get it to conflict with state policy.]

• Broad view of commerce power: In reaching this conclusion, Marshall took a broad view of Congress’ powers under the Commerce Clause. Under that clause, Congress could legislate with respect to all “commerce which concerns more States than one.” “Commerce” included not only buying and selling, but all “commercial intercourse.”

• May affect intrastate matters. Ogden apparently argued that insofar as his NY-granted monopoly affected his rights in NY waters, this monopoly was superior to any federal rights regarding those NY waters. But Marshall answered that the congressional power to regulate interstate commerce included the ability to affect matters occurring within a state, so long as the activity had some commercial connection with another state. Thus federal law could affect NY waters, if voyages beginning in NY ended in NJ. [But Marshall conceded that “the completely internal commerce of a State may be considered as reserved for the State itself.” (Koppelman: but even in 1824, there is almost no “commerce that does not affect other states.”)]

• May be used to “utmost extent”: In the most important portion of his opinion, Marshall stated that no area of interstate commerce is reserved for state control. That is, the mere existence of the states does not by itself act as a limit upon Congress’ power to govern commercial matters that affect more than one state: “This power, like all others vested in Congress, is complete in itself, may be exercised to its utmost extent, and acknowledges no limitations, other than are prescribed in the USC.”

1. 10th Amendment no bar: Thus Marshall implicitly rejected the argument that the 10th Amendment (which provides that “the powers not delegated to the U.S. by USC, nor prohibited by it to the States, are reserved to the States respectively.”) acts as an independent limit on Congress’ power to regulate interstate commerce.

• Koppelman critique.

• Marshall attempted to draw bright line category, but he did not do so coherently  both sides of debate use Gibbons to support their arguments.

• Marshall indicated that there were limits in CC, but future courts must decide exactly what those limits are.

• Interlude. From Gibbons until late 19^th century, SCt had practically no occasion to consider Congress’ powers under the Commerce Clause. There were many years during which Commerce Clause was not used expansively. Slavery controversy limited possibilities for federal law because it was dangerous to suggest that Congress could prohibit interstate shipment of slaves. It was not until enactment of the Interstate Commerce Act (1887) [could penalize RRs for unjust charges] and the Sherman Antitrust Act (1890) that Congress’ powers under the Commerce Clause were again seriously scrutinized by the SCt. When this scrutiny did occur, the result was much more hostile to congressional power than it was in the Marshall Gibbons approach.