In the case of Greene, Auditor, et al., Constituting the Board of Valuation and Assessment for the State of Kentucky, et al. v. Louisville & Interurban Railroad Company in 1916, The U.S Supreme Court ruled that a state tax assessment on a railroad company was not unconstitutional under the Fourteenth Amendment's due process clause. The Louisville & Interurban Railroad Company had argued that Kentucky's method for assessing property taxes was arbitrary and discriminatory because it valued its tangible property at its full cash value while other personal properties were assessed at only a fraction of their actual value. However, the court held that states have broad discretion to classify different types of property for taxation purposes as long as those classifications are reasonable and not arbitrary or capricious.

In the dissenting opinion for Greene, Auditor, et al., Constituting The Board Of Valuation And Assessment For The State Of Kentucky, et al. v. Louisville & Interurban Railroad Company (1916), Justice Holmes argued that the court should not have intervened in this case as it was a matter of state law and policy rather than federal constitutional law. He believed that the majority's decision to strike down Kentucky’s method of taxing railroad companies interfered with states' rights to manage their own affairs and set their own tax policies. Furthermore, he disagreed with the majority's interpretation of "due process," arguing that it did not require absolute equality in taxation but only prohibited arbitrary or discriminatory practices. In his view, there was no evidence that Kentucky had acted arbitrarily or discriminatorily in setting its tax rates for railroads.