In the case of Baltimore Shipbuilding and Dry Dock Company v. Baltimore in 1904, the U.S Supreme Court ruled on a dispute between a shipbuilding company and the city of Baltimore over property taxes. The shipbuilder argued that it was exempt from paying certain taxes because its property was being used for maritime purposes, which fell under federal jurisdiction according to the Constitution's Commerce Clause. However, the City of Baltimore contended that regardless of how it was used, all real estate within its boundaries should be subject to local taxation laws. The Supreme Court sided with the City of Baltimore stating that while Congress has exclusive control over interstate commerce including navigation; this does not prevent states or municipalities from taxing ships as personal property when they become part of general wealth within their territory. Therefore, even though vessels were engaged in foreign or interstate commerce did not make them immune from state taxation.

In the dissenting opinion for Baltimore Shipbuilding and Dry Dock Company v. Baltimore, the justice argued that the city of Baltimore should not be held responsible for damages to a dry dock owned by the shipbuilding company due to changes in water flow caused by alterations made by the city. The justice contended that these alterations were part of necessary public improvements and thus did not constitute an illegal taking under eminent domain law. Furthermore, he asserted that any damage incurred was indirect and incidental rather than direct or intentional harm inflicted upon private property rights. He also emphasized that holding municipalities liable for such consequences would severely impede their ability to make essential infrastructure upgrades or modifications needed for urban development and growth.