In the case of Missouri Pacific Railroad Company v. Prude in 1923, the U.S Supreme Court ruled that a state could not impose taxes on interstate commerce beyond its jurisdictional boundaries. The dispute arose when Louisiana imposed a tax on fuel consumed by trains traveling through the state but purchased outside of it. The Missouri Pacific Railroad Company argued this was an unconstitutional interference with interstate commerce and won their case at both district court and circuit court levels before reaching the Supreme Court. In affirming these decisions, Justice Oliver Wendell Holmes Jr., writing for the majority, held that while states have broad powers to tax businesses operating within their borders, they cannot extend those powers to transactions occurring entirely outside their jurisdiction because doing so would interfere with Congress's exclusive power over interstate commerce.

In the dissenting opinion for Missouri Pacific Railroad Company v. Prude, it was argued that the plaintiff should not be barred from seeking damages due to a technicality in filing procedures. The dissent emphasized that the court's decision effectively denied justice to an injured party based on a minor procedural error rather than any substantive issue related to his claim. It was noted that while rules of procedure are important, they should not be used as tools for denying individuals their right to seek redress in court. This view held that strict adherence to formalities over substantial justice is contrary to the principles upon which our legal system is founded.