In the case of Austin v. Tennessee, the U.S. Supreme Court ruled in favor of Tennessee, upholding a state law that prohibited out-of-state corporations from doing business within its borders unless they obtained a license and paid an annual tax. The plaintiff, Austin (an agent for an Illinois-based insurance company), argued that this law violated both the Commerce Clause and Equal Protection Clause of the Constitution by discriminating against foreign corporations. However, the court disagreed with these arguments stating that states have inherent power to regulate businesses within their jurisdiction under police powers granted by Tenth Amendment; furthermore it did not violate commerce clause as it was not regulating interstate commerce but rather intrastate activities which is permissible under constitution; finally regarding equal protection claim court held that there was no discrimination as all foreign companies were treated equally i.e., required to pay same fees irrespective of their home state.

In the dissenting opinion for Austin v. Tennessee, Justice Harlan argued that the majority's decision to uphold a state law prohibiting the sale of cigarettes was an overreach of government power. He contended that such regulation should be left to individual states and not dictated by federal legislation or court rulings. Harlan believed this case represented a dangerous precedent where personal liberties could be curtailed under the guise of public health concerns without sufficient evidence proving harm from cigarette use. Furthermore, he pointed out inconsistencies in banning only one form of tobacco while allowing others like cigars and snuff which could also potentially pose health risks. Thus, he concluded that this ban was arbitrary and unreasonable interference with trade rights rather than a legitimate exercise of police powers for public welfare.