In the 1937 case of Coverdale, Sheriff and Ex-Officio Tax Collector v. Arkansas-Louisiana Pipe Line Co., the Supreme Court ruled in favor of Arkansas-Louisiana Pipe Line Co. The dispute arose over a tax assessment by Louisiana on interstate pipelines owned by the company. The state argued that it had jurisdiction to levy taxes because part of the pipeline was within its borders, while the company contended this constituted an undue burden on interstate commerce and violated their Fourteenth Amendment rights. In its decision, the court held that although states have power to tax property within their boundaries, they cannot do so in a way that discriminates against or unduly burdens interstate commerce - which was found to be true in this case due to multiple taxation from different states where pipelines were located.

In the dissenting opinion for Coverdale v. Arkansas-Louisiana Pipe Line Co., Justice Cardozo disagreed with the majority's decision to allow a state tax on interstate commerce, arguing that it violated the Commerce Clause of the U.S. Constitution. He contended that this ruling would open up a floodgate of similar taxes by states, which could potentially disrupt and burden interstate commerce significantly. Furthermore, he argued that such taxation should be regulated by Congress rather than individual states in order to maintain uniformity and prevent potential conflicts between states over taxing rights. In his view, allowing each state to impose its own taxes on interstate commerce would lead to chaos and confusion due to differing tax laws across different jurisdictions.