In the case of Massachusetts v. Western Union Telegraph Company, 1890, the Supreme Court ruled in favor of Western Union. The state of Massachusetts had attempted to tax out-of-state businesses that were conducting business within its borders. This included companies like Western Union which was based in New York but operated telegraph lines throughout various states including Massachusetts. However, the court found that this violated the Commerce Clause of the U.S Constitution as it interfered with interstate commerce by imposing a direct tax on it. Therefore, such taxation was deemed unconstitutional and struck down by the court.

In the dissenting opinion for Massachusetts v. Western Union Telegraph Company, it was argued that the state of Massachusetts had a right to tax telegraph companies operating within its borders. The dissent disagreed with the majority's interpretation of federal law as preempting state taxation rights in this case. They contended that while Congress has power over interstate commerce, it does not mean states are completely barred from exercising their own powers on businesses within their jurisdiction unless explicitly prohibited by federal legislation or constitutionally forbidden. In this instance, they saw no such prohibition against taxing telegraph poles and wires owned by Western Union located in Massachusetts even if they were used for interstate communication purposes. Therefore, according to them, there should be no constitutional objection to holding these properties subject to local taxation just like any other real estate property situated in the state.