In Bates vs. Illinois Central Railroad Company, the Supreme Court ruled that a state could not interfere with interstate commerce by imposing taxes on out-of-state companies. The case involved an 1851 Illinois law which imposed a tax on all railroad companies doing business in the state, including those from other states who were operating within its borders. The plaintiff argued that this was unconstitutional as it violated the Commerce Clause of the Constitution and interfered with interstate commerce. After considering arguments from both sides, the court agreed and held that such taxation was prohibited under Article I Section 8 of the US Constitution because it impeded free trade between states and thus violated Congress’s exclusive power to regulate interstate commerce. This ruling established important precedent for future cases involving similar issues regarding federalism and economic regulation by individual states

Justice Field delivered the dissenting opinion in Bates vs. Illinois Central Railroad Company, arguing that the majority's decision was an unconstitutional extension of federal power over state law. He argued that Congress had no authority to pass a law which interfered with or regulated contracts between individuals and corporations created by state laws. Furthermore, he argued that if such a law were allowed to stand it would be tantamount to allowing Congress to regulate all private contracts within each State - something which is clearly beyond its constitutional powers. Justice Field also noted that while states have certain rights under the Constitution, they are not absolute and can be limited when necessary for public safety or welfare; however, this case did not involve any such issue as there was no evidence presented showing how allowing this contract would endanger public safety or welfare in any way. Finally, he concluded by noting his belief that if Congress could interfere with private contracts then it could effectively nullify all existing state laws regarding those same matters - something which should never be allowed given our system of government where States retain their sovereignty unless specifically ceded away through Constitutional amendment