In the 1896 case of Lake Shore & Michigan Southern Railway Company v. Ohio, the U.S. Supreme Court ruled in favor of the railway company, overturning a decision by an Ohio court that had imposed taxes on its property located outside of Ohio's jurisdiction. The state argued that it could tax all properties owned by companies operating within its borders regardless of where those properties were physically located; however, this was rejected by the Supreme Court as unconstitutional under due process and equal protection clauses. The ruling established a precedent for limiting states' ability to impose taxes beyond their geographical boundaries and reinforced principles related to interstate commerce regulation.

In the dissenting opinion for Lake Shore & Michigan Southern Railway Company v. Ohio, it was argued that the state of Ohio had a right to regulate commerce within its borders, including railway rates. The justice disagreed with the majority's interpretation of interstate commerce and believed that states should retain some control over their internal affairs. He contended that while Congress has authority over interstate commerce, this power is not absolute and does not negate a state's ability to govern local matters affecting health, safety or welfare of its citizens - even if they indirectly touch upon interstate trade. Therefore, he asserted that Ohio’s regulation on railroad fares did not infringe upon federal jurisdiction but rather represented an exercise in legitimate state police powers aimed at protecting public interests within its territory.