How One Landmark Case Shaped the Commerce Clause

By: Bob Fiedler

In some ways, John Marshall’s opinion in Gibbons v. Ogden expanded federal power using expansive definitions of various words in the Commerce Clause. But future courts ignored an important limiting principle he included in his opinion.

The commerce clause operates both as a power delegated to Congress and a constraint upon state legislation. The clause found in Article I Sec. 8 empowers Congress “to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”

No clause in the 1787 Constitution has been more disputed, and none has generated as many cases. To this day, the debate over the extent of the commerce power centers on the definitions of “to regulate,” “commerce,” and “among the several states.”

One such case that goes back to the earliest days of the Republic and remains foundational for modern Constitutional law is Gibbons v. Ogden (1824)

New York law gave Aaron Ogden a monopoly. Only his company could operate steamboats within New York waters. Another man, Thomas Gibbons, disregarded that law. He operated steamboats that traveled from New Jersey to New York.

Ogden sued to halt Gibbon’s steamboat business. He contended that New York law gave him a monopoly. Gibbons countered that New York law interfered with a federal law that licensed him to operate his ships. If Congress had the power to license ships that travel between one state and another, then the New York law would be preempted, and thus unconstitutional. The New York court’s rejected Gibbons Constitutional arguments and enjoined his operations. In turn, Gibbons appealed the case to the United States Supreme Court. He argued that the federal law was supported by Congress’ power under the Commerce Clause

Gibbons contended that a state cannot regulate interstate commerce.

In Gibbons v Ogden, the Supreme Court agreed. Chief Justice John Marshall provided the Court’s first major interpretation of the words “commerce” and “among” in the Commerce Clause.

Ogden argued that the New York monopoly law was constitutional because Congress lacked the power to regulate boats traveling between New York and New Jersey. Commerce he contended was limited to “traffic, to buying and selling, or the interchange of commodities and… it [did not] comprehend navigation.” Therefore the New York law should control.

As in McCulloch v Maryland, Chief Justice Marshall rejected the narrowest interpretation of Congressional power in favor of a broader one. He explained that Ogden’s construction would “restrict a general term,” that is commerce, which is “applicable to many objects, to one of its significations”- meaning trade or traffic. Instead, Marshall adopted a broader interpretation of the meaning of the word commerce. He concluded that “Commerce, undoubtedly, is traffic but it is something more: it is intercourse.  It describes the commercial intercourse between nations, and parts of nations in all its branches, and is regulated by prescribing rules for that intercourse.”

This conclusion is also supported by evidence that the original meaning of “commerce” included laws governing navigation.

As Rob Natelson noted in his paper “The legal meaning of commerce in the Commerce Clause,” “commerce” included “buying and selling products made by others (and sometimes land), associated finance and financial instruments, navigation and other carriage, and intercourse across jurisdictional lines.” [emphasis added]

Next Marshall explained that the word “among” in the Commerce Clause is defined as “intermingled with.” Marshall wrote that “comprehensive as the word ‘among’ is, it may, very properly be restricted to that commerce which concerns more States than one.” The word “concerns” is another broadening term.

When the words of the Commerce Clause in the Constitution are replaced by synonyms used by Marshall (“commerce” with intercourse and “among” with intermingled with), the power seems to be broader- or so later courts would rule.

The narrowest definition of “to regulate” is to “make regular,” That is, to regulate the free flow of goods, but not, except in cases of danger, to prohibit the flow of any good. Some scholars and a number of Supreme Court Justices have supported that narrow definition. In fact, in 1886, the House Judiciary Committee declared that a proposed bill that would have prohibited the sale of oleomargarine was against the original intent of the Framers. The committee reasoned that the purpose of the Commerce Clause was to prevent state barriers to commerce, not to give Congress the power to do the same.

Nonetheless, the Supreme Court has never formally accepted a limited view of what “to regulate” means. From the outset, in Gibbons v Ogden, Chief Justice John Marshall saw the power to regulate as coextensive with the other delegated powers of Congress. He declared: “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 Constitution.”

In other words “to regulate” is descriptive of the essential and core Congressional power to legislate. The manner in which Congress decides to regulate commerce, Marshall said, is completely at the discretion of Congress.”

However, like in McCulloch v Maryland, Marshall placed an important limiting principle on the scope of Congress’ powers. The Commerce Clause enumerated three specific powers: to regulate commerce with foreign nations, among the several states, and with Indian tribes. Therefore, that “enumeration presupposes something not enumerated.” In other words, Congress can’t regulate any other type of commerce than the three that are listed. Specifically, Marshall found that the Constitution does not give Congress the power to regulate the “exclusively internal commerce of a state.” Such “exclusively internal commerce” he added “may be considered as reserved for the state itself.”

The text of the Tenth Amendment supports Marshall’s conclusion. It provides that: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” If an enumerated power is not delegated to Congress, then it is reserved to the states.

With this broad reading of “commerce” and “among” the court found that Congress had the power to enact the federal law that licensed Gibbons’ boats. As a result the state law that limited boats from entering New York waters was preempted, and was unconstitutional.

Like in McCulloch v Maryland, Marshall can be accused of casually employing expansive and comparatively imprecise rhetoric concerning the scope of Congress’ enumerated powers. Yet, once again, Marshall in fact reaffirmed limits on these powers.  Future decisions would rely on Marshall’s broad definition of “commerce” and “among,” yet ignore his limitations on federal power.