In the case of Oregon-Washington Railroad & Navigation Company v. State of Washington, 1925, the U.S Supreme Court ruled in favor of the state. The dispute arose when Washington imposed a tax on railroad companies operating within its borders based on their gross earnings from interstate commerce activities. The Oregon-Washington Railroad & Navigation Company challenged this tax as unconstitutional under the Commerce Clause and Due Process Clause arguing that it was an undue burden on interstate commerce and violated their right to due process. The court held that states have a right to impose taxes for benefits conferred by them such as police protection or public safety services provided to these corporations, even if they are engaged in interstate commerce. It further stated that there is no violation of due process rights unless there is clear proof showing arbitrary action or discrimination against out-of-state entities by local authorities. This decision upheld states' power to levy taxes on businesses involved in both intrastate and interstate trade while ensuring constitutional protections against discriminatory taxation practices.

In the dissenting opinion for Oregon-Washington Railroad & Navigation Company v. State of Washington, it was argued that the majority's decision to uphold a state law requiring trains to stop at certain designated points violated the Commerce Clause of the U.S. Constitution. The dissenters believed that this regulation placed an undue burden on interstate commerce and exceeded states' regulatory powers under federalism principles. They contended that such decisions should be left up to Congress or federal agencies with expertise in transportation safety regulations rather than individual states, as inconsistent state laws could disrupt national rail networks and impede efficient transport across state lines. Furthermore, they expressed concern about potential negative impacts on economic growth and development if each state were allowed to impose its own unique set of rules governing railroad operations.