In Memphis and Charleston Railroad Company v. Alabama, the Supreme Court of the United States was asked to decide whether the state of Alabama had the right to tax the Memphis and Charleston Railroad Company. The railroad company argued that the tax was unconstitutional because it violated the Commerce Clause of the United States Constitution. The Court held that the tax was unconstitutional because it discriminated against interstate commerce. The Court reasoned that the tax was discriminatory because it was imposed on the railroad company's property located in Alabama, but not on the property of other companies located in the state. The Court also noted that the tax was imposed on the railroad company's property located in other states, but not on the property of other companies located in those states. The Court concluded that the tax was unconstitutional because it violated the Commerce Clause of the United States Constitution. The Court's decision in this case established the principle that states cannot impose taxes that discriminate against interstate commerce. This principle has been applied in numerous cases since then, and it remains an important part of the law today.

The Memphis and Charleston Railroad Company (M&C) argued that the state of Alabama had violated its constitutional rights by imposing a tax on it. The M&C claimed that this was an unconstitutional burden, as they were already taxed by the federal government for their operations in interstate commerce. The majority opinion held that since Congress had not expressly forbidden such taxation, then states could impose taxes on railroads operating within their borders. However, Justice Field dissented from this decision and argued that while Congress may have not explicitly prohibited such taxation, it did implicitly do so through its power to regulate interstate commerce under Article I of the Constitution. He further stated that if each state imposed different taxes or regulations on railroad companies operating within them then these companies would be unable to effectively operate across multiple states due to conflicting laws and regulations; thus impeding interstate commerce which is something only Congress has authority over according to Article I of the Constitution.