In the 1910 case of Cincinnati, Indianapolis and Western Railway Company v. City of Connersville, the U.S Supreme Court ruled in favor of the railway company. The city had attempted to enforce an ordinance that required all trains passing through it to stop at a certain point for inspection. The railway company argued this was an unreasonable interference with interstate commerce and therefore unconstitutional under federal law which gives Congress exclusive power over such matters. The court agreed, stating that while cities have some authority to regulate local aspects of rail traffic for safety reasons, they cannot impose regulations that significantly interfere with interstate commerce without approval from Congress or a relevant federal agency.

In the dissenting opinion for Cincinnati, Indianapolis and Western Railway Company v. City of Connersville, the justice argued that the majority's decision was flawed because it failed to consider important factors in determining whether or not a tax imposed by a city on railway companies is constitutional. The justice believed that there should be more emphasis placed on whether or not the tax is reasonable and does not discriminate against interstate commerce rather than just focusing solely on if it has been authorized by state law. He also disagreed with how much weight was given to previous court decisions which he felt were either irrelevant or wrongly decided. Furthermore, he contended that even though states have broad powers when it comes to taxation, they must still abide by federal laws and regulations governing interstate commerce.