In McNulty v. California (1892), the U.S Supreme Court ruled on a case involving an interstate commerce dispute. The plaintiff, McNulty, was a New York resident who sold lottery tickets for lotteries held in Louisiana and other states. He sent these tickets via mail to customers in California where such activity was illegal under state law. After being indicted by a grand jury in San Francisco, he appealed his case all the way up to the Supreme Court arguing that his actions were protected under federal laws governing interstate commerce. The court disagreed with McNulty's argument and upheld his indictment stating that while Congress has power over interstate commerce, it does not have authority to force goods or services into states where they are prohibited by local law. In essence, this ruling affirmed that individual states retain their rights to regulate certain activities within their borders even when those activities involve transactions across state lines.

The dissenting opinion in the McNulty v. California case argued that the majority's decision was a misinterpretation of the Constitution and an overreach of federal power. The dissenters believed that states should have sovereignty to regulate their own commerce, including interstate commerce, as long as it does not conflict with federal law. They contended that California had every right to impose taxes on out-of-state insurance companies operating within its borders because these companies were using state resources and infrastructure for their business operations. Furthermore, they disagreed with the majority's assertion that this tax constituted a burden on interstate commerce; rather, they saw it as a fair way for states to generate revenue from businesses benefiting from their services and protections. The dissenters feared this ruling would set a dangerous precedent by limiting state powers while expanding federal control over areas traditionally governed by individual states.