The U.S. Supreme Court case Atlantic Coast Line Railroad Company v. Daughton, Commissioner of Revenue of the State of North Carolina, et al., 1922 revolved around a dispute over taxation by the state on railroad companies' property used in interstate commerce. The Atlantic Coast Line Railroad Company argued that North Carolina's method for assessing taxes was discriminatory and violated both due process and equal protection clauses under the Fourteenth Amendment because it taxed railroads at higher rates than other types of property. However, the Supreme Court upheld North Carolina's tax system as constitutional since it did not find any intentional discrimination against interstate commerce or violation of due process rights in their assessment methods.

In the dissenting opinion for Atlantic Coast Line Railroad Company v. Daughton, Justice McReynolds argued that North Carolina's tax law was unconstitutional because it violated the Due Process Clause of the Fourteenth Amendment. He contended that by taxing a corporation based on its total capital without considering where its property and business activities were located, North Carolina was essentially imposing taxes on property outside of its jurisdiction. This, he believed, constituted an arbitrary exercise of power and infringed upon interstate commerce rights protected under federal law. Furthermore, he expressed concern about potential double taxation if other states followed suit in adopting similar laws. In his view, this case represented a departure from established principles regarding state taxation powers over corporations operating across multiple jurisdictions.