The State of New Jersey brought a case against the People of the State of New York in front of the United States Supreme Court. The dispute was over ownership rights to Ellis Island, which is located between both states. New Jersey argued that it had owned and exercised jurisdiction over Ellis Island since 1664, while New York claimed that they acquired title to it through an act passed by Congress in 1808. After hearing arguments from both sides, the court ruled in favor of New Jersey's claim on jurisdictional grounds due to their long-standing possession and control over Ellis Island prior to any action taken by Congress or other parties. This ruling established a precedent for future cases involving disputes between two states regarding land boundaries and territorial rights.

In the case of The State of New Jersey v. The People of the State of New York, Justice Story delivered a dissenting opinion in which he argued that Congress had exclusive authority to regulate navigation on navigable waters between states and that any state law attempting to do so was unconstitutional. He further argued that since this particular dispute involved an interstate waterway, it should be resolved by Congress rather than through judicial proceedings. In addition, Justice Story contended that even if there were some legal basis for allowing one state to exercise jurisdiction over another's navigable waters, such power would have been limited only to cases involving public health or safety concerns; however, no such concern existed in this instance as both parties agreed on how best to manage the disputed waterway. Therefore, according to Justice Story's dissent, neither party had standing before the court and thus their claims should not be heard nor decided upon by a federal court.