In the 1896 case Gulf, Colorado and Santa Fe Railway Company v. Ellis, the U.S. Supreme Court ruled in favor of a Texas law that allowed individuals to sue out-of-state corporations within their local county courts. The railway company argued that this law violated both the Fourteenth Amendment's Equal Protection Clause and Article IV’s Privileges and Immunities Clause by discriminating against non-resident corporations. However, the court disagreed with this argument stating that these protections did not extend to corporations but only applied to citizens of states. Furthermore, it held that as long as a corporation conducts business within a state, it is subject to its laws even if incorporated elsewhere.

In the dissenting opinion for Gulf, Colorado and Santa Fe Railway Company v. Ellis, Justice Brewer argued that the majority's decision was a violation of the Fourteenth Amendment's Equal Protection Clause. He contended that by allowing Texas to impose different regulations on in-state corporations compared to out-of-state ones, it unfairly discriminated against interstate commerce. Furthermore, he believed this ruling could potentially lead to states imposing burdensome regulations on out-of-state companies as a form of economic protectionism which would be detrimental to free trade among states. In his view, such discriminatory laws were unconstitutional unless they served a clear public interest or necessity - something he did not believe was present in this case.