In the case of Indianapolis and Vincennes Railroad Company v. Backus in 1893, the U.S. Supreme Court ruled on a dispute involving land grants for railroad construction. The court held that when Congress makes a grant of lands to aid in building railroads, it is not an absolute gift but rather a pledge which may be forfeited if conditions are not met by the company receiving it. In this particular case, the Indianapolis and Vincennes Railroad Company had been granted land under certain conditions including completion of their line within five years from July 23rd, 1866 - something they failed to do until February 1871. As such, they were deemed to have forfeited their rights to these lands due to non-compliance with stipulated terms.

In the dissenting opinion for the Indianapolis and Vincennes Railroad Company v. Backus case, it was argued that there were significant errors in judgment by the majority. The main point of contention revolved around whether or not a state law could interfere with interstate commerce, which is under federal jurisdiction according to the Constitution. The dissenting justices believed that Indiana's tax on gross receipts from both intra-state and inter-state business operations of railroad companies did indeed infringe upon this federal power over interstate commerce. They contended that such taxation should be considered unconstitutional as it interfered with free trade among states, thus violating principles established by previous court rulings like Cooley v Board of Wardens (1852) and Robbins v Shelby County Taxing District (1887). Furthermore, they expressed concern about potential negative implications if states were allowed to impose taxes on businesses involved in interstate commerce without any restrictions or guidelines from Congress.