In the case of Illinois Central Railroad Company v. The People of the State of Illinois, the Supreme Court of the United States was asked to decide whether the state of Illinois had the right to take a portion of the land owned by the Illinois Central Railroad Company for public use. The railroad company argued that the state had no right to take the land, as it was granted to them by the federal government in 1851. The Supreme Court ruled in favor of the railroad company, finding that the state of Illinois had no right to take the land without the consent of the federal government. The Court held that the federal government had exclusive jurisdiction over the land, and that the state could not take it without the consent of the federal government. The Court also held that the state could not take the land for public use without just compensation. The Court's decision in this case established the principle of eminent domain, which states that the government has the right to take private property for public use, provided that the owner is justly compensated. This case also established the principle of federal preemption, which states that the federal government has exclusive jurisdiction over certain matters, and that the states cannot act without the consent of the federal government.

In Illinois Central Railroad Company v. The People of the State of Illinois, Justice Field delivered a dissenting opinion in which he argued that the state had no right to tax land owned by the railroad company as it was granted to them by Congress under an act of 1851. He reasoned that while states have broad powers when it comes to taxation, they cannot interfere with federal grants and thus could not impose taxes on lands given away by Congress for public purposes such as transportation or navigation. Furthermore, he noted that if this were allowed then any state would be able to nullify congressional acts simply through taxation and thereby undermine federal authority over its own property. As such, Justice Field concluded that since Congress had already granted these lands for use in interstate commerce without imposing any conditions regarding their taxation status then there was no legal basis upon which the state could levy taxes against them.