In the 1934 case of Nashville, Chattanooga & St. Louis Railway v. Walters, Commissioner of Highways et al., the U.S Supreme Court ruled in favor of the railway company. The dispute arose when Tennessee's Highway Commission ordered that a bridge be constructed over one of the railway's tracks and demanded that half its cost should be borne by the railroad company. The court held this order to be unconstitutional as it violated due process rights under Fourteenth Amendment because there was no hearing or opportunity for challenge provided before imposing such financial obligation on them. Furthermore, it was determined that railroads were not directly benefited from highway improvements and therefore could not justifiably bear part of their costs.

In the dissenting opinion for Nashville, Chattanooga & St. Louis Railway v. Walters, Commissioner of Highways et al., Justice Stone argued that the majority's decision was inconsistent with previous rulings regarding interstate commerce and taxation. He contended that a state tax on gross receipts from interstate transportation would be unconstitutional if it were not apportioned to reflect only in-state activities. The justice believed this principle should also apply to property taxes levied by states on railroad companies operating across state lines; otherwise, he warned it could lead to multiple taxation of the same property by different states - an outcome contrary to established legal principles protecting against undue burdens on interstate commerce. Therefore, Justice Stone disagreed with the majority's ruling upholding Tennessee’s method of taxing railroads based solely upon mileage within its borders without considering their operations outside the state.