In the 1898 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 it based on its total capital stock value. The railway company argued this was unconstitutional as it included property located outside of Ohio's jurisdiction and thus violated due process rights under the Fourteenth Amendment. The Supreme Court agreed with this argument, stating that states could only tax entities within their own borders and not interstate commerce or out-of-state properties owned by those entities. This ruling reinforced limitations on state taxation powers over interstate businesses.

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 and protect its citizens from unfair practices by corporations such as railroads. The justice disagreed with the majority's interpretation of the Commerce Clause in this case, arguing that it did not preclude states from exercising their police powers to ensure fair business practices. He believed that allowing federal courts to interfere with state regulations would undermine states' rights and disrupt local economies. Furthermore, he contended that if every regulation affecting interstate commerce were deemed unconstitutional, then many necessary and beneficial laws would be invalidated. Thus, he concluded that Ohio’s law should have been upheld because it was a reasonable exercise of its police power aimed at preventing discrimination against shippers.