In the case of Louisville and Nashville Railroad Company v. Woodford in 1913, the U.S Supreme Court ruled on a dispute involving railroad taxation. The state of Kentucky had imposed taxes on the Louisville and Nashville Railroad Company based on an assessment of its total franchise value, which included both tangible property such as tracks and trains, as well as intangible assets like rights-of-way granted by other states. The railroad company argued that this method of taxation was unconstitutional because it taxed property outside Kentucky's jurisdiction. The Supreme Court sided with the railroad company, ruling that while a state could tax all shares representing ownership in corporations operating within its borders (regardless where shareholders live), it couldn't tax physical property located out-of-state or intangible elements derived from interstate operations without violating due process clause under Fourteenth Amendment to Constitution. This decision clarified how states could levy taxes against corporations operating across multiple jurisdictions.

In the dissenting opinion for Louisville and Nashville Railroad Company v. Woodford, it was argued that the majority's decision to uphold a state law requiring railroads to provide separate but equal accommodations for black and white passengers violated the Fourteenth Amendment of the U.S. Constitution, which guarantees all citizens equal protection under the law. The dissenting justices believed that this segregation inherently implied an inequality between races, thus violating constitutional rights. They also expressed concern about how such laws could be used as a tool of racial discrimination by states in violation of federal civil rights protections.