In the case of Chesapeake and Ohio Railway Company v. Kentucky, 1900, the U.S Supreme Court ruled in favor of the state of Kentucky. The railway company had challenged a tax imposed by Kentucky on all freight carried within its borders, arguing that it violated both their due process rights under the Fourteenth Amendment and also interfered with interstate commerce. However, the court held that as long as a tax is not discriminatory or unreasonable in its application to interstate commerce activities occurring within a state's boundaries, it does not violate either constitutional provision. Therefore, since this particular tax was applied equally to both intrastate and interstate freight transported by railroads operating in Kentucky - regardless of whether they were incorporated there or elsewhere - it did not infringe upon Chesapeake & Ohio’s rights nor interfere with Congress’ power over interstate commerce.

In the dissenting opinion for Chesapeake and Ohio Railway Company v. Kentucky, it was argued that the majority's decision violated principles of federalism by allowing a state to regulate interstate commerce. The dissent emphasized that under the Constitution, only Congress has this power. They contended that if each state were allowed to impose its own regulations on interstate commerce, it would lead to chaos and inefficiency in trade across state lines. Furthermore, they pointed out that such regulation could potentially be used as a tool of economic protectionism by states seeking to favor their own industries over those from other states. Therefore, they believed that the court should have ruled in favor of the railway company rather than upholding Kentucky's law.