The U.S. Supreme Court case of State of Georgia v. The Trustees of the Cincinnati Southern Railway and the Cincinnati, New Orleans & Texas Pacific Railway Company in 1918 revolved around a dispute over taxation. The state of Georgia sought to tax the property owned by these railway companies within its borders, but they resisted on grounds that their property was exempt from such taxes under an agreement with Tennessee (where they were based). They argued this exemption extended to all states where their railroads operated. However, the court ruled against them stating that while interstate commerce is generally free from state interference, it does not grant immunity from fair and just state taxation laws for properties located within those states' boundaries. Therefore, even though these companies were chartered in another state (Tennessee), they still had to pay taxes on properties they owned in Georgia as per Georgian law.

In the dissenting opinion for the case of State of Georgia v. The Trustees of the Cincinnati Southern Railway and The Cincinnati, New Orleans & Texas Pacific Railway Company, it was argued that states should retain their sovereign immunity from lawsuits in federal courts even when they engage in commercial activities. This view is based on a strict interpretation of the Eleventh Amendment to the U.S Constitution which grants states this immunity. It was contended that allowing such suits would undermine state sovereignty by subjecting them to potentially burdensome litigation and financial liability. Furthermore, it was suggested that if Congress intended to abrogate this immunity for cases involving commerce or other governmental functions, it could have explicitly done so through legislation rather than leaving it up to judicial interpretation.