Gibbons v. Ogden: What is commerce and who controls it?

Gibbons v. Ogden (1824)

The power to regulate interstate commerce was granted to Congress by the Commerce Clause of the Constitution. It gives Congress the right:

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.

The Case

Gibbons v. Ogden is a Supreme Court case that adopted an expansive view of the scope of the Commerce Clause by holding that Congress had the power to regulate interstate commerce.

The case involved the right of competing ferry services to operate in New York state waters after the New York state legislature had granted a monopoly to one company. The Supreme Court held that federal law preempted the New York-granted monopoly; thus, the state legislature’s granting of exclusive steamboat usage rights to one company was an impermissible restriction on interstate commerce.

The Supreme Court refined the definition of “commerce” to include all phases of business (including navigation) and not just business traffic. Additionally, the Supreme Court held that Congress could regulate intrastate commerce if it had an impact on commercial activities in other states: “Commerce among the States, cannot stop at the external boundary line of each State, but may be introduced into the interior.”

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Listed below are several excerpts from the case that show the definition and clarification provided by the court.

The power to “regulate Commerce” is:

“ the power to regulate; that is, to prescribe the rule by which commerce is to be governed. 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. ”

The power of Congress as to commerce “among the several states”:

“ The word “among” means intermingled with. A thing which is among others, is intermingled with them. Commerce among the States, cannot stop at the external boundary line of each State, but may be introduced into the interior….Comprehensive as the word “among” is, it may very properly be restricted to that commerce which concerns more States than one. ”

Defining how far the power of Congress extends:

“ The power of Congress, then, comprehends navigation, within the limits of every State in the Union; so far as that navigation may be, in any manner, connected with “commerce with foreign nations, or among the several States.”

The Impact

Gibbons v. Ogden is the first of many cases that has sought to define the role of Congress in regulating commerce, and the degree to which the federal government can use the Commerce Clause to legislate business practices.

Can the government enact a child labor restrictions using the Commerce Clause? No. In 1918 the Supreme Court held that Congress did not have the power under the Commerce Clause to regulate goods produced through child labor and transported in interstate commerce.

Can the government use the Commerce Clause to force a national minimum wage? Yes. In 1941 the Court ruled that Congress can exclude from interstate commerce articles which deteriorate the health, welfare, and morals of the nation.

Can Congress require restaurants serving food obtained through interstate commerce to provide service to people of all races? Yes. In 1964 the Supreme Court held that Congress can regulate business activity that is purely local, if any part of the activity affects interstate commerce, if the aggregate activity has a substantial effect on interstate commerce.

Can Congress use the Commerce Clause to restrict possession of guns in schools when those guns are purchased through interstate commerce? No. In 1995 the Court held that the commerce power only grants Congress the ability to regulate the use of the channels and instrumentalities of interstate commerce, and other activities having a substantial relation to or a substantial effect on interstate commerce.

As you can see, Gibbons v. Ogden is the first of many landmark cases defining how businesses can and cannot behave in support of interstate commerce, and defining where the power of the Commerce Clause ends.