In the case of State of Alabama v. Schmidt (1913), the U.S Supreme Court dealt with a dispute over an unpaid debt. The defendant, Mr. Schmidt, was a resident of New York who had purchased cotton from a company in Alabama but failed to pay for it. The state court in Alabama ruled in favor of the plaintiff and ordered Mr. Schmidt to pay his debt plus interest and costs associated with legal proceedings. However, Mr. Schmidt argued that he should not be subject to jurisdiction by courts outside his home state as per due process clause under Fourteenth Amendment which prohibits states from depriving any person "of life, liberty or property without due process of law". He appealed this decision all the way up to the U.S Supreme Court. The Supreme Court upheld lower court's ruling stating that when someone engages in business transactions across state lines they are effectively consenting to being held accountable by laws and courts within those states where transaction took place even if they do not physically reside there themselves.

The dissenting opinion in the case of State of Alabama v. Schmidt, 1913, argued that the majority's decision to uphold a law prohibiting non-residents from selling books within Alabama was unconstitutional. The dissent contended that this law violated both the Commerce Clause and Fourteenth Amendment by discriminating against out-of-state businesses and restricting free trade among states. They believed it was not within a state's power to regulate interstate commerce in such an exclusionary manner or limit citizens' access to literature based on where it is sold from. Furthermore, they pointed out inconsistencies with how similar laws were handled in other cases, suggesting selective enforcement which further undermined its constitutionality.