The U.S. Supreme Court case Nashville, Chattanooga & St. Louis R. Co et al v Morgan et al in 1929 revolved around the issue of whether a state could regulate interstate commerce by imposing taxes on railroad companies for using tracks that crossed state lines. The plaintiffs were two railway companies who argued that Tennessee's tax was unconstitutional as it interfered with interstate commerce and violated the Commerce Clause of the Constitution which gives Congress exclusive power to regulate such matters. However, the court ruled against them stating that while states cannot directly control or burden interstate commerce, they can indirectly affect it through legitimate exercises of their taxing powers unless those effects are clearly excessive in relation to what states stand to gain from a valid public purpose. In this case, Tennessee's tax was seen as an acceptable exercise of its taxing authority because railroads used and benefited from services provided by the state like police protection and other facilities necessary for their operation.

In the dissenting opinion for Nashville, Chattanooga & St. Louis R. Co et al. v. Morgan et al., Justice Stone argued that the majority's decision to uphold a Tennessee law requiring railroads to provide equal but separate accommodations for white and African American passengers was inconsistent with previous Supreme Court rulings on similar issues of racial segregation in transportation services. He contended that this ruling violated the Commerce Clause of the U.S Constitution by allowing states to regulate interstate commerce, which should be under federal jurisdiction only according to him. Furthermore, he believed it also infringed upon individuals' Fourteenth Amendment rights by endorsing racially discriminatory practices without sufficient justification or compelling state interest.