In the case of Kansas City Southern Railway Company v. Wolf et al., 1922, the U.S Supreme Court was tasked with determining whether a state tax imposed on foreign corporations violated the Commerce Clause and Fourteenth Amendment. The State of Louisiana had levied a franchise tax on all corporations operating within its borders, including those incorporated in other states or countries. The Kansas City Southern Railway Company, an out-of-state corporation, challenged this taxation as unconstitutional interference with interstate commerce and violation of equal protection rights under the Fourteenth Amendment. The Supreme Court ruled against the railway company stating that there was no constitutional impediment to such taxation by individual states. It held that while Congress has exclusive authority over interstate commerce, it does not prevent a state from imposing taxes for corporate privileges granted by it - even if these corporations engage in interstate commerce activities. Furthermore, regarding alleged violations of equal protection rights under the Fourteenth Amendment due to differential treatment between domestic and foreign companies; court found no substantial difference in their treatment which could be deemed unjustifiable discrimination.

In the dissenting opinion for Kansas City Southern Railway Company v. Wolf et al., Justice Holmes argued that the majority's decision to hold a railway company liable for damages caused by sparks from its locomotives was unjustified. He contended that such an occurrence is a common and unavoidable risk associated with operating trains, and therefore should not be considered negligence on part of the railway company. Furthermore, he believed it was unreasonable to expect companies to completely eliminate all risks associated with their operations, as doing so would place an undue burden on them and potentially hinder economic progress. Instead, he suggested that individuals who choose to live or work near railways must accept certain risks as inherent in their choice of location.