The Supreme Court determined that the federal law always prevails over states laws and that states cannot interfere with the power of Congress to regulate interstate commerce.
At the beginning of the 1800s, the New York state granted Robert Fulton and Robert R. Livingston a 20-year monopoly on steamboat navigation in state waters. Later on, Aaron Ogden purchased the rights to them in order to operate steamboats between New York City and New Jersey.
The problem began when Thomas Gibbons operated a steamboat on that same route without Fulton and Livingston's authority, which led Ogden to sue Gibson in 1819.
In Court, Gibbons appealed alleging that he held a federal license to do business there which had been issued by an act of Congress. The case turned in his favor and it also determined that federal law prevails over state laws and that the latter can not interfere with the power of Congress to regulate interstate commerce. Such power is secured in the commerce clause of the Constitution, which states that the federal government is the one who regulates commerce.
