In the 1901 case Dooley v. United States, the U.S. Supreme Court ruled that duties imposed by Congress on goods imported into Puerto Rico from foreign countries after Spain ceded Puerto Rico to the United States were constitutional and did not violate Article I, Section 8 of the Constitution which grants Congress power "to regulate Commerce with foreign Nations." The plaintiff, a merchant in San Juan, had argued that such import taxes constituted double taxation since they were levied in addition to tariffs already paid upon their initial entry into other parts of U.S territory. However, the court held that as per Treaty of Paris ending Spanish-American War (1898), until Congress enacts legislation for governance of territories acquired from Spain including Puerto Rico; these territories are considered foreign countries under US customs laws thus allowing imposition of duties on goods entering them from abroad or even mainland USA.

In the dissenting opinion for Dooley v. United States, Justice John Marshall Harlan argued that the imposition of duties on goods transported from Puerto Rico to New York after the ratification of a peace treaty with Spain was unconstitutional. He contended that once Puerto Rico became a territory of the U.S., its inhabitants were entitled to all constitutional protections, including those against taxation without representation. Harlan believed that Congress had exceeded its authority by imposing taxes on goods moving between American territories and states, as this violated principles of uniformity in taxation outlined in Article I Section 8 Clause 1 of the Constitution. Furthermore, he disagreed with majority's interpretation regarding "foreign countries," arguing it should not include U.S territories like Puerto Rico.