The In re Rahrer case in 1890 revolved around the constitutionality of a federal law that allowed states to regulate or prohibit the sale of alcoholic beverages, even if they were imported from other states. The petitioner, Rahrer, was convicted for selling imported beer without a license in Kansas - a state which had laws prohibiting such sales. He argued that his conviction violated the Commerce Clause of the U.S. Constitution because it interfered with interstate commerce. However, the Supreme Court upheld his conviction and ruled against him. It held that once an item has been introduced into the market of any given state (in this case alcohol), it becomes part of its internal commerce and is thus subject to local regulations and prohibitions as long as these do not conflict with federal legislation or treaties. This ruling essentially affirmed states' rights over their own internal affairs while also upholding Congress's power to regulate interstate trade under certain conditions.

In the dissenting opinion for In re Rahrer, it was argued that the court majority had erred in its interpretation of Congress's power over interstate commerce. The dissenters believed that while Congress has broad authority to regulate such commerce, this does not extend to a right to control or prohibit the sale of an article after it has reached its destination state and is no longer part of interstate trade. They contended that once goods have arrived within a state and are held there for use or sale, they become subject to local laws and regulations. Thus, according to them, if a state law prohibits the sale of alcohol (as was at issue in this case), then federal legislation cannot override these restrictions simply because the alcohol originally came from another state. This view essentially supports states' rights over federal powers when it comes to regulating goods within their own borders.