In the case of Gromer, Treasurer of Porto Rico v. Standard Dredging Company (1911), the Supreme Court was tasked with determining whether a tax imposed by Puerto Rico on foreign corporations doing business in its territory violated the U.S. Constitution's uniformity clause. The Standard Dredging Company, a New Jersey corporation operating in Puerto Rico, argued that this tax was unconstitutional as it discriminated against non-resident corporations and favored resident ones. The court ruled in favor of Gromer, upholding the constitutionality of Puerto Rican law taxing foreign corporations at higher rates than domestic ones. It held that although Congress had granted Puerto Rico certain powers to govern itself under Foraker Act (1900), these did not include all constitutional protections applicable within states; specifically, they were not bound by uniformity clause which requires taxation to be geographically uniform across United States territories. This decision affirmed that while Congress could extend constitutional rights and privileges to territories like Puerto Rico through legislation if it chose to do so - absent such action from Congress - those territories were not automatically entitled to full range of constitutional protections enjoyed by states.

In the dissenting opinion for Gromer v. Standard Dredging Company, Justice Holmes disagreed with the majority's ruling that a tax imposed by Puerto Rico on foreign corporations was unconstitutional. He argued that as long as Congress had not explicitly prohibited such taxation, it should be allowed under the Foraker Act which granted Puerto Rico significant autonomy in local matters. Furthermore, he contended that this case did not involve interstate commerce and thus did not violate the Commerce Clause of the U.S Constitution. In his view, if every law affecting foreign commerce were to be struck down due to its potential impact on international relations or federal policy, then states would have virtually no power over their own economic affairs. Thus, he believed that unless there is clear evidence of congressional intent to prohibit such laws or they directly conflict with federal policy or treaties, they should be upheld.