The U.S. Supreme Court case New York, Lake Erie and Western Railroad Company v. Pennsylvania in 1893 revolved around the issue of interstate commerce and taxation by states. The state of Pennsylvania imposed a tax on freight transported within its borders, including goods that were merely passing through en route to other destinations. The New York, Lake Erie and Western Railroad Company challenged this tax as an unconstitutional burden on interstate commerce. The Supreme Court ruled in favor of the state of Pennsylvania, upholding the validity of the tax. It held that while Congress has exclusive authority over interstate commerce under the Commerce Clause, it does not prevent a state from imposing taxes for services provided or benefits conferred within its jurisdiction even if they involve interstate transactions. This decision affirmed states' rights to levy taxes on activities occurring within their boundaries regardless if those activities are part of larger commercial operations spanning multiple states.

In the dissenting opinion for New York, Lake Erie and Western Railroad Company v. Pennsylvania, Justice Brewer argued that the state of Pennsylvania did not have jurisdiction over a corporation from another state unless it had given its consent to be sued there. He contended that merely doing business in a state does not equate to giving consent for legal action within that jurisdiction. The majority's decision, he believed, violated principles of federalism by allowing states too much power over interstate commerce and corporations based outside their borders. Furthermore, he expressed concern about potential abuses if every state could impose its own laws on out-of-state companies simply because they conducted some business within its boundaries.