Since Congress was firmly controlled by the Federalists, the fight against the Alien and Sedition Acts moved to the state legislatures in late 1798. James Madison prepared the Virginia Resolutions and Thomas Jefferson wrote the Kentucky Resolutions. Since Jefferson didn't live in Kentucky, he ghost wrote them for John Breckenridge, who brought them before the Kentucky legislature.
The two sets of resolutions followed a similar argument: The states had the duty to nullify within their borders those laws that were unconstitutional. The Alien and Sedition acts were unconstitutional because they infringed on the reserved powers of the states.
Nothing concrete resulted from the passage of these resolutions; no other states followed with similar actions. In fact, the Massachusetts legislature passed a declaration to the effect that courts and not state legislatures were the proper arbiters of constitutionality. It commented:
That, although a liberal and enlightened vigilance among the people is always to be cherished, yet an unreasonable jealousy of the men of their choice, and a recurrence to measures of extremity, upon groundless or trivial pretexts, have a strong tendency to destroy all rational liberty at home, and to deprive the United States of the most essential advantages in relations abroad.
Jefferson was not pleased with the negative response from Massachusetts and the lack of support from the "republican" states of the South which he had expected to stand with him on the issue. In 1799, he composed an additional resolution which again was introduced into the Kentucky legislature by Breckenridge and adopted unanimously in December. Although the right of states to nullify federal legislation was restated, the resolution carefully did not advocate nullification at that time:
That this commonwealth does upon the most deliberate reconsideration declare, that the said alien and sedition laws, are in their opinion, palpable violations of the said constitution; and however cheerfully it may be disposed to surrender its opinion to a majority of its sister states in matters of ordinary or doubtful policy; yet, in momentous regulations like the present, which so vitally wound the best rights of the citizen, it would consider a silent acquiesecence as highly criminal: That although this commonwealth as a party to the federal compact; will bow to the laws of the Union, yet it does at the same time declare, that it will not now, nor ever hereafter, cease to oppose in a constitutional manner, every attempt from what quarter soever offered, to violate that compact: ...
The causes that led to the Kentucky and Virginia resolutions died away, and the Alien and Sedition Acts were repealed, but the arguments that Jefferson put forward at the time would be recalled later as the nation debated what course to follow on the issue of slavery. When in 1832, Madison found that his words in the Virginia resolution were being used to support the nullification position taken by South Carolina, he denied that it had ever been his or Jefferson's intent to see actual nullification take place, and had they thought that this distortion of their meaning might happen, they would have used different language.