Gibbons v. Ogden, 22 U.S. 1 (1824)

Commentary by Jon Roland

The opinion in this case is one of the more pernicious in Supreme Court jurisprudence. The decree is essentially correct, but the reasoning leading to it is erroneous. In fairness, there are also problems with the way the Constitution is worded, which lay the basis for this misconstruction. However, by examining the evidence of the original understanding of the Founders, we can arrive at a better one.

What Marshall does in this opinion is reach for the conclusion that the national Congress has the exclusive power to regulate navigation in the coastal waters of the United States, and tries to find the authority for that power in the Commerce Clause, but does it in a way that lays the basis for other, broader constructions of the Commerce Clause.

To answer Marshall, it must be agreed that the United States needs the power to regulate navigation in its coastal waters, but does any clause of the Constitution delegate that power, or did the Framers neglect to include it? Is navigation "commerce"? If so, then one can conclude that the power rests on the Commerce Clause, but if "commerce" does not include navigation, then what is the basis for the power, if any?

The correct answer is that the United States does have a limited power to regulate or prohibit navigation in its coastal waters, but that such power derives from its power of defense, not from the Commerce Clause. Marshall alludes to this argument, calling it the "war-making" power, but the Constitution delegates the power to collect taxes to "provide for the common Defense", and it was understood that, while part of a restrictive clause concerning spending, it referred to a power to defend the nation, and that such defense can involve doing more than just making war or preparing for it. The power to defend implies the power to regulate or prohibit navigation in coastal waters or the movement of persons across national borders.

Part of the problem with this case is that both parties opened the way to the misconstruction by allowing that the power to regulate interstate commerce included the power to regulate interstate traffic. Ogden at least should have argued a narrower definition of "commerce".

So how did the Founders understand "commerce" for purposes of the Constitution? First, it is clear from the examples cited in their debates that they only contemplated commodities, not services. We also find in the writings of legal scholars of the time the repeated use of phrases like "commerce and traffic" or "commerce and navigation" to show they meant distinct things by the two terms. They clearly contemplated commodities being traded across state lines being inspected at checkpoints, probably but not necessarily on the borders, for compliance with regulations, and perhaps for the assessment of taxes. On the other hand, they also clearly did not intend to include personal property being carried across a border for one's own personal use and not for trade. Therefore, an essential element of the definition of "commerce" was the sale of a commodity or the right to use it.

To further refine the definition, we must examine where the sale takes place. Clearly, for the Founders it was interstate "commerce" if the owner carried a commodity across a state border for sale to someone in another state than the state of his origin, so sale in the terminating state would make it "commerce". What about sale in the originating state? If the buyer took delivery in the originating state, then carried it back to his own state, not intending to sell it to someone else in his state, it would be his personal property, and not interstate "commerce", but intrastate, and outside the jurisdiction of Congress. Suppose the sale took place in the originating state, but the buyer did not take delivery there, but had it shipped to him in his own terminating state? Again, the Founders would have included that situation within their meaning of interstate "commerce". From these considerations, we can arrive at a definition: Constitutional "commerce" is the sale of a commodity from a seller in one state to a buyer in another state together with the delivery of that commodity from the seller in the originating state to the buyer in the terminating state.

So where does "traffic" enter the discussion? Clearly, the delivery of a purchased commodity is traffic, but so is transport of personal property not involved in a sale, and the latter is not "commerce" as defined above. Therefore, some traffic is "commerce" and some is not. Does this make "traffic" subject to regulation under the Commerce Clause, as an implied power? After all, both kinds of traffic share the same roads and navigable waters. The correct answer is, only to the extent necessary to separate commercial traffic, subject to regulation of the commodity, from noncommercial traffic. This means all traffic may be routed through inspection checkpoints, to determine whether the cargo is commercial or not, but once the cargo is determined not to be commercial, the power ends, and is only revived if the traveler or vessel has the opportunity to pick up additional cargo that might be subject to regulation.

What Marshall does when he says "the sovereignty of Congress, though limited to specified objects, is plenary as to those objects" is commit a non sequitur when he argues that if a second object, such as interstate traffic or navigation, is sometimes included within a delegated object, such as the interstate sale of commodities, therefore it is always included and power is also plenary over that object. First, the delegations are for subjects, that is, classes of things or activities, not objects, which connotes purpose. Second, the delegations are not necessarily plenary, although they may be exclusive. The power to regulate is not the power to prohibit. It is essentially not plenary, because it is not the power to prohibit all modalities of a thing, but only of some modalities, leaving some remaining, and then only minimally for a reasonable public purpose. Unreasonable or excessive regulation would be beyond the delegation, and justiciable on constitutional grounds.

Leaving aside coastal waters, what about traffic and navigation between states? Do states have the power to regulate it? When questioned about it, James Madison stated that the intent of the Commerce Clause was not so much to grant the power to regulate commerce to the national government as to remove it from the states. We can accept that statement as authoritative, but that is not what is stated in the Constitution. For that intent the Framers should have included a clause in Art. I Sec. 10 prohibiting the states from impairing traffic or navigation, or regulating commerce, with another state or a foreign nation. They didn't. Can we infer such a prohibition from the Commerce Clause? Logically, we cannot. We can argue that if the states had plenary power to impair interstate traffic or navigation, and if the delegation of power to regulate commerce to Congress is exclusive, then the exercise of their power by the states would conflict with the power of Congress, and therefore must yield to regulations of commerce passed by Congress, but in the absence of such regulation, they could exercise such power. In this case, while there was a conflicting national navigation law, there was no conflicting national commerce regulation law.

All we can do to forbid the states from impairing traffic or navigation, or the regulation of commerce, with other states or nations, is rely on the statement by Madison and perhaps other Framers as to their intent. Such a construction is extraconstitutional, based not even on legislative history but on later commentary by the lawmakers. The Supreme Court may reasonably base a decision on such commentary, but it should also declare that such decision is made as a matter of equity, and not to be considered a constitutional precedent, and recommend that the defect in the Constitution be corrected at the earliest date by amendment.

However, there are two other matters that need to be discussed. The first is whether the coastal waters of a state are within the territorial jurisdiction of the state or the nation. The Constitution is silent on this issue, as are the ratification resolutions of the states that had coastal waters. Originally, the coastal waters of each state were part of their territories. How did the nation get jurisdiction? Were there cessions of the coastal waters to the exclusive jurisdiction of Congress under Art. I Sec. 8 Cl. 17? There could have been, but there weren't. It has been left to the federal courts, and except for the Texas tidelands, the decision was that the territory of coastal waters belongs to the nation. Such a position is rational policy, but without legal foundation. It could be resolved by the coastal states ceding the territory, and they should, but so far most of them haven't.

Clearly, if the coastal waters of a state are within the national jurisdiction, then the state would not have jurisdiction to license navigation in such waters. That is not the decision in this case, which could be reasonably interpreted as an implied holding that the coastal waters of a state are within that state's territorial jurisdiction.

The second matter concerns the Intellectual Property Clause. Marshall mentions it as an argument of the appellant, but dismisses it, and errs in doing so. The apparent purpose of the license by the State of New York in this case was to protect the rights of the heir or assign of the inventor of the steamboat, who was Ogden, to operate steamboats, and therefore was the exercise of a kind of intellectual property right protection. That raises the question of whether states may grant patent, trademark, or copyright protection, or whether the delegation of such power to Congress is exclusive. Clearly, the states do grant name protection to corporations when they charter them, and authorize the filing of assumed names, which is akin to trademark protection. But could a state extend patent protection within its territory beyond the expiration of that protection at the federal level, and what happens when a party, free to market the invention in most states after the expiration of the federal patent, is prohibited from doing so within the state that extended the patent? The answer is unclear, because a few states do have their own intellectual property protective laws, mostly involving the theft of trade secrets, but potentially in conflict with federal protective laws.

Therefore, the way this case should have been decided would have been to find that Gibbons had the right to use the invention of the steamboats in the absence of a federal patent being held by Ogden, and that the license from the State of New York impaired commerce between states if the steamboats carried any commercial cargo, so for such operations, was invalid. Then as long as each steamboat carried at least one commodity being sold across a state line, it would be exempt from being prohibited by the State of New York. It could have also held that the Congress has the prior power to regulate or prohibit navigation in coastal waters under the Defense Clause. The carrying of passengers, being a service, would not be commerce, and irrelevant to the case.

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