In the 1906 case of Gulf, Colorado and Santa Fe Railway Company v. Texas, the U.S Supreme Court examined whether a state law that required railroads to provide equal but separate accommodations for white and African American passengers was constitutional under the Fourteenth Amendment's Equal Protection Clause. The railway company argued that it was not financially feasible to provide separate cars on all trains or routes due to varying passenger numbers. However, they were fined by Texas authorities for violating this segregation law when an African American woman was found in a car designated for whites only. The Supreme Court ruled against the railway company stating that as long as facilities provided are substantially equal in quality and comfort, racial segregation does not violate the Fourteenth Amendment's Equal Protection Clause. This decision upheld 'separate but equal' doctrine which allowed racial segregation until it was overturned later by Brown v Board of Education in 1954.

In the dissenting opinion for Gulf, Colorado and Santa Fe Railway Company v. Texas, Justice Harlan argued that the majority's decision was inconsistent with previous rulings of the court. He contended that a state has no power to regulate interstate commerce rates unless expressly authorized by Congress. The principle established in this case would allow states to impose burdens on interstate commerce without any control or supervision from Congress, which he believed contradicted constitutional provisions protecting such commerce from undue state interference. Furthermore, he disagreed with the majority’s view that there is no distinction between property used exclusively for intrastate business and property used partly for intrastate and partly for interstate business when it comes to taxation purposes; instead arguing each should be treated differently under law due its distinct nature of use.