This case was a dispute between the Chicago, Burlington and Kansas City Railroad (CB&K) and the state of Kansas. The CB&K had been operating in Kansas since 1872, and in 1887, the state passed a law that imposed a tax on the CB&K's gross receipts. The CB&K argued that the tax was unconstitutional, as it violated the Commerce Clause of the United States Constitution. The Supreme Court agreed with the CB&K, ruling that the tax was unconstitutional because it interfered with interstate commerce. The Court held that the tax was an undue burden on interstate commerce, and that it was not a legitimate exercise of the state's power to tax. The Court also held that the tax was discriminatory, as it only applied to the CB&K and not to other railroads operating in the state. The Court concluded that the tax was unconstitutional and invalidated it.

In the case of Chicago, Burlington and Kansas City Railroad v. Guffey, the Supreme Court was asked to decide whether a state law that set maximum rates for railroads violated the Commerce Clause of the Constitution. The majority held that it did not violate this clause because Congress had not yet regulated interstate commerce in this area. However, Justice Field dissented from this opinion on two grounds: firstly, he argued that states have an inherent right to regulate their own internal affairs; secondly, he argued that even if Congress had authority over interstate commerce in this area (which he believed they did), then any state regulation would be valid as long as it does not conflict with federal legislation or interfere with its purpose. He concluded by stating his belief that "the power of a State to protect its citizens against extortionate charges is one which should never be denied."