Gibbons v. Ogden (1824) is one of those landmark early Supreme Court cases (in the United States), an important followup to McCulloch v. Maryland that hammered home the dominance of the central government over individual states. Essentially, the court gave the United States government supremacy in all matters of interstate commerce. This is more important than it at first appears: The more power the national government gained, the more the nation began to view itself as a country, rather than a bunch of individual states.
The Facts:
New York granted Livingston and Fulton the exclusive right to use steamboats in state waters. Ogden then aquired a license from Livingston and Fulton to be the only steamboat company to ferry travelers between New York and New Jersey.
Gibbons, a former partner of Ogden's, began navigating the same waters with his own two steamboats, with a license granted by the United States government. Ogden got an injunction in New York's state court barring Gibbons from continuing.
The Ruling:
The primary issue was (quoting from the decision) "that clause in the constitution which authorizes Congress to [regulate] 'commerce with foreign nations, and among the several states, and with the Indian tribes.'"
What is important here is the definition of the word "commerce". Does it deal only with the buying and selling of goods, or does it move beyond that narrow definition to include boat navigation and many other issues? After all, Ogden wasn't selling anything except transportation.
Marshall believed it was the latter. "Commerce, undoubtedly, is traffic, but it is something more,--it is intercourse." In other words, commerce means more than buying and selling. It means everything required for that buying and selling to take place.
Sources:
Constitutional Law, 8th edition, by William B. Lockhart, Yake Kamisar, Jesse H. Cooper, Steven H. Shiffrin, and Richard H. Fallon, jr.
American Government, 5th edition, by Theodore Lowi and Benjamin Ginsburg.