New York law gave Aaron Ogden a monopoly. Only his firm could operate steam- boats within New York waters. Another businessman, Thomas Gibbons, disregarded that law. He operated steamboats that travelled from New Jersey to New York.
Ogden sued to halt Gibbons’s steamboat business. He contended that New York law gave him a monopoly. Gibbons countered that the New York law interfered with a federal law that licensed him to operate his ships. If Congress had the power to license ships that travelled between one state and another, then the New York law would be preempted, and thus unconstitutional. The New York courts rejected Gibbons’s constitutional argument 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’s power under the Commerce Clause. Article I, Section 8, Clause 3 gives Congress the power “[t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” Gibbons contended that a state cannot regulate interstate commerce.
In Gibbons v. Ogden, the Supreme Court agreed.