Gibbons v. Ogden

Enter Thomas Gibbons and Aaron Ogden. These two men had once been partners in a steamship business. But soon, they had a falling out and began a complicated series of legal battles. One of these became the landmark case of Gibbons v. Ogden.

When the case began, Aaron Ogden was operating a steamship line between New York and Elizabethtown, New Jersey. Ogden had bought a license from Livingston, granting him access to Livingston's exclusive rights to New York steamboat traffic.

Gibbons resented the monopolistic power of his former partner. He began running his own boats between New York and New Jersey. Ogden, in turn, tried to get an injunction against Gibbons from the Chancellor of New York State.

According to Ogden, New York State law protected his monopoly. Gibbons, on the other hand, pointed out that he had a license to engaged in the "coasting" trade, a license issued under an Act of Congress. Ogden claimed that state law took precedence here. Gibbons argued that federal law overrode the laws of a single state.

The first round of the fight went to Ogden. New York State courts found that the state did have the right to issue exclusive licenses, because navigation, not commerce, was involved. Of course, said the New York courts, if Congress actually passed a law that concerned navigation, state law might be overruled. But since no such law had been passed, New York was within its rights.