The United States brought a complaint against the City of Chicago for obstructing navigable waters. The city had built wharves and piers into Lake Michigan, which impeded navigation in violation of federal law. The Supreme Court held that Congress has exclusive power over navigable waters within state boundaries, and thus the City of Chicago was not allowed to build structures on them without permission from Congress. This case established an important precedent regarding states' rights versus federal authority when it comes to regulating waterways.

In the United States v. The City of Chicago, the Supreme Court was asked to decide whether Congress had authority under the Commerce Clause to regulate navigation on Lake Michigan within Illinois state boundaries. The majority opinion held that Congress did not have such power and thus could not require Chicago to construct a pier into Lake Michigan for public use without violating states' rights. However, in his dissent Justice McLean argued that while it is true that states possess certain inherent powers over their own internal affairs, this does not mean they can interfere with commerce between different states or with foreign nations which falls exclusively within federal jurisdiction as granted by Article I Section 8 of the Constitution. He further noted that if Congress has no control over navigable waters then interstate commerce would be hindered and ultimately crippled due to lack of uniformity in regulations from one state to another; therefore he concluded that since navigation is an essential part of interstate commerce it must necessarily fall under federal regulation regardless of where those waters are located geographically.