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 and jurisdiction rights to Ellis Island, which lies between both states. New Jersey argued that it had owned and exercised control over Ellis Island since before 1664 when it became part of their state boundaries. On the other hand, New York claimed that they had acquired title to all islands within its harbor by virtue of an act passed in 1774 granting them sovereignty over any land not previously granted or reserved for public use. After much deliberation, including review from historical documents such as maps and charters from colonial times, The US Supreme Court ultimately ruled in favor of New Jersey's claim due to evidence showing that they were indeed exercising authority long before 1774 when this Act was passed by NY legislature.

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 navigable waters between two states and thus could not be regulated by either state alone. He further stated that if one state attempted to do so, it would amount to an unconstitutional infringement on the other's sovereignty. Furthermore, he asserted that any attempt by one state to control or limit navigation on such waters was invalid as it violated both federal law and interstate compacts established under Article I Section 10 Clause 3 of the Constitution. In conclusion, Justice Story concluded that neither party should have been granted relief from their respective claims since they were both attempting to exercise powers beyond those allowed them under federal law and constitutional provisions.