In the Exxon Corp. et al. v. Eagerton, Commissioner of Revenue of Alabama, et al., case in 1982, the Supreme Court ruled on a dispute regarding an Alabama law that prohibited natural gas producers from passing on a newly imposed state severance tax to consumers. The court held that this law did not violate either the Commerce Clause or Contract Clause of the U.S Constitution and was therefore constitutional. The decision was based on two main points: firstly, it found no discrimination against interstate commerce as both local and out-of-state companies were treated equally under this law; secondly, it determined there was no impairment of contractual obligations because contracts between private parties do not diminish states' power to enact laws for public purposes.

In the dissenting opinion for Exxon Corp. et al. v. Eagerton, Commissioner of Revenue of Alabama, et al., Justice Rehnquist disagreed with the majority's view that Alabama's statute prohibiting oil and gas producers from passing on a severance tax to consumers violated the Commerce Clause and Contract Clause of the U.S Constitution. He argued that there was no evidence showing this law would affect interstate commerce negatively or discriminate against out-of-state businesses since it applied equally to all producers operating within Alabama, regardless of their location elsewhere in America. Additionally, he contended that any potential contractual issues should be resolved by state courts rather than federal ones as they are more familiar with local contract laws and regulations.