In the case of Frick et al. v. Pennsylvania, 1924, the U.S Supreme Court ruled in favor of Pennsylvania's right to tax coal mined and removed from its land by non-residents. The plaintiffs were a group of non-resident owners who argued that this taxation violated their rights under both the Due Process Clause and Commerce Clause of the Constitution. They claimed it was an attempt to regulate interstate commerce as they transported most of their coal across state lines for sale elsewhere after mining it in Pennsylvania. However, Justice Oliver Wendell Holmes Jr., writing for a unanimous court, rejected these arguments stating that since all operations related to mining occurred within Pennsylvania’s borders before transportation began; thus making it intrastate rather than interstate commerce at that point which could be subjected to state taxation without violating any constitutional provisions.

In the dissenting opinion for Frick et al. v. Pennsylvania, Justice Holmes argued that the state of Pennsylvania had no right to impose a tax on stock dividends from corporations outside its jurisdiction simply because the shareholders resided within its borders. He contended that such taxation was an overreach of power and infringed upon interstate commerce laws, as it essentially allowed one state to levy taxes on businesses operating in another state. Furthermore, he asserted that this type of taxation could lead to double taxation if other states followed suit and taxed their residents' out-of-state income similarly. In essence, Justice Holmes believed this ruling violated principles of federalism by allowing individual states too much control over national economic matters.