In the case of McCoy v. Shaw, State Auditor et al., 1927, the U.S Supreme Court was tasked with determining whether a state law that required all foreign corporations to pay an annual license tax violated the Fourteenth Amendment's Equal Protection Clause. The plaintiff, McCoy, represented a Delaware corporation conducting business in West Virginia and argued that this requirement unfairly discriminated against out-of-state businesses as domestic corporations were not subject to such taxes. However, the court ruled in favor of Shaw (the defendant), upholding West Virginia’s right to impose different regulations on foreign and domestic entities under its taxing power. The court reasoned that states have broad discretion when it comes to taxation matters and found no violation of equal protection rights because there was no arbitrary or unreasonable discrimination involved.

In the dissenting opinion for McCoy v. Shaw, State Auditor et al., Justice Stone argued that the majority's decision to invalidate a California law requiring foreign corporations to pay an annual fee was incorrect. He believed that this requirement did not violate the Equal Protection Clause of the Fourteenth Amendment as it treated all foreign corporations equally and did not discriminate against any particular group. Furthermore, he contended that states have a right to regulate commerce within their borders and can impose reasonable fees on businesses operating in their jurisdiction. Therefore, he disagreed with the majority's view that such laws were unconstitutional interferences with interstate commerce.