In the case of Baltimore and Ohio Railroad Company v. Baugh in 1892, the U.S Supreme Court ruled on a dispute involving interstate commerce regulations. The plaintiff, Baugh, had shipped goods from Washington D.C to West Virginia via the defendant's railroad company but found his goods damaged upon arrival due to alleged negligence by the company. He sued for damages in a West Virginia court and won. On appeal, however, the railroad company argued that under federal law (the Carmack Amendment), they were not liable as their responsibility ended when they delivered it safely at its destination within Maryland before being transported further by another carrier. The Supreme Court disagreed with this interpretation of liability limits under federal law and upheld Baugh’s claim against them for damage caused during transit across state lines even though part of transportation was handled by another carrier after initial delivery point within Maryland itself. This decision reinforced that carriers could be held responsible for entire journey if there is an agreement between shipper and receiver about final destination regardless of intermediate stops or transfers among different transporters.

In the dissenting opinion for Baltimore and Ohio Railroad Company v. Baugh, Justice Brewer argued that the majority's decision was inconsistent with previous rulings of the court regarding interstate commerce. He contended that a state has no power to regulate or control any matter which is solely related to interstate commerce, as this authority lies exclusively with Congress under the Constitution. In his view, Maryland’s imposition of a tax on gross receipts derived from both intra-state and inter-state operations by railroads constituted an illegal regulation on interstate commerce because it affected transactions beyond its borders. Therefore, he believed that such taxation should be deemed unconstitutional unless apportioned in some reasonable way between intra-state and inter-state business activities.