Erie Railway Company v. Pennsylvania was a United States Supreme Court case that addressed the issue of whether a state could impose a tax on a railroad company that operated within its borders. The Court held that the state could not impose such a tax, as it would be in violation of the Commerce Clause of the United States Constitution. The case arose when the Pennsylvania legislature passed a law that imposed a tax on the Erie Railway Company, a railroad company that operated within the state. The company argued that the tax was unconstitutional, as it violated the Commerce Clause of the United States Constitution. The clause states that Congress has the power to regulate commerce among the states. The Court agreed with the company, holding that the tax was unconstitutional. The Court reasoned that the tax was a burden on interstate commerce, as it would make it more expensive for the company to operate within the state. The Court also noted that the tax was not necessary to protect the health and safety of the citizens of Pennsylvania, as the company was already subject to federal regulations. The Court's decision in this case established the principle that states cannot impose taxes on interstate commerce, as such taxes would be in violation of the Commerce Clause. This principle has been applied in numerous cases since then, and has been an important part of the development of the law of interstate commerce.

Justice Field delivered the dissenting opinion in Erie Railway Company v. Pennsylvania, arguing that the majority had misinterpreted and misapplied a prior Supreme Court decision from 1842 (Charles River Bridge v. Warren Bridge). He argued that this case was not analogous to Charles River because it did not involve two competing bridges over the same river; instead, it involved a railroad company's attempt to build its own tracks on land owned by another party without permission or compensation. Furthermore, he argued that there were no federal laws governing such disputes between private parties and thus Congress could not have intended for them to be resolved through federal courts. Instead, Justice Field believed these matters should be left up to state legislatures as they are better equipped than federal courts when dealing with local issues like this one. In conclusion, he felt strongly that states should retain their sovereignty over such matters unless Congress explicitly grants authority otherwise - something which has yet to occur in this particular dispute between Erie Railroad Company and Pennsylvania