1 Pet. (26 U.S.) 511 (1828), argued 8, 10, 11 Mar. 1828, decided 15 Mar. 1828 by vote of 7 to 0; Marshall for the Court. Questions of federalism were among the most difficult confronting the early Supreme Court. One of them was the appropriate division of admiralty and maritime jurisdiction between federal superior courts for the Florida territory and certain lesser courts that Congress had authorized the territory itself to establish. The American Insurance Company case involved an appeal by a libellant in admiralty from a salvage award by a local court in the Florida territory. The larger questions presented by the case included the power of Congress to acquire and govern territories and the source of that power; the division of jurisdiction between federal and local courts; the scope of the admirally and maritime jurisdiction conferred by Article III; and the sources of law in the territories.
For a unanimous Court, Chief Justice John Marshall affirmed the award by the local court, explaining that when Congress had granted federal superior courts in the territory partial Article III jurisdiction, it had not conferred on them the full measure of federal judicial power. The Constitution extended such power to, inter alia, cases arising under the federal Constitution, laws, or treaties; and admiralty and maritime cases. Thus admiralty suits were not among those arising under the “laws and constitution of the United States” but were instead “as old as navigation itself; and the law admiralty and maritimes, as it has existed for ages, is applied by our courts to the cases as they arise” (p. 544). Marshall also stated that Congress derived plenary power to acquire and govern territories from the territories clause of Article IV, a position ignored by Chief Justice Roger B. Taney in the DredScott Case (1857).
Ralph James Mooney