In the 1935 case Grosjean v. American Press Co., Inc., the U.S. Supreme Court ruled that a Louisiana tax specifically targeting newspapers with large circulations was unconstitutional, as it violated the First Amendment's guarantee of freedom of press. The state had imposed a 2% gross receipts tax on newspapers circulating more than 20,000 copies per week, arguing it was merely an excise or license tax and not intended to limit circulation numbers or suppress free speech. However, the court unanimously held that this selective taxation constituted censorship in disguise and infringed upon newspaper publishers' rights to disseminate information without government interference. This landmark decision reinforced protections for media outlets against punitive economic measures aimed at controlling content or influencing public opinion.

In the dissenting opinion for Grosjean v. American Press Co., Justice McReynolds argued that the tax in question was not a violation of freedom of press as it did not directly target or suppress newspapers' ability to express their views. He contended that this case was about taxation, and should be treated as such, rather than being seen through the lens of First Amendment rights. The justice believed that Louisiana had every right to impose taxes on businesses operating within its borders, including those involved in newspaper publishing. According to him, there were no grounds for claiming discrimination since all newspapers with large circulations were taxed equally under this law regardless of their political affiliations or viewpoints expressed.