The U.S. Supreme Court case New York, New Haven and Hartford Railroad Company v. New York in 1896 revolved around the issue of whether a state could impose taxes on interstate commerce companies without violating the Commerce Clause of the Constitution. The State of New York had imposed taxes on railroad cars that were owned by out-of-state entities but used within its borders, which was challenged by the railroad company as unconstitutional interference with interstate commerce. However, the court ruled in favor of New York stating that such taxation did not violate any constitutional provisions since it was based on property located within its jurisdiction and thus subject to local tax laws despite being part of an interstate business operation. This decision upheld states' rights to levy taxes on properties used for commercial purposes even if they are part of an interstate enterprise.

In the dissenting opinion for the case of New York, New Haven and Hartford Railroad Company v. New York, Justice Harlan argued that the majority's decision was a departure from established principles regarding eminent domain. He contended that private property could only be taken for public use with just compensation under constitutional law. However, he believed this principle had been violated in this case as the railroad company was forced to pay for improvements made by another entity on its land without receiving any direct benefit or having any say in these changes. Furthermore, he disagreed with the majority's view that such an imposition constituted a form of taxation rather than an exercise of eminent domain powers because it did not serve a general public purpose but instead benefited specific individuals or entities at the expense of others.