In the case of Board of Assessors of the Parish of Orleans, The City Of New Orleans v. New York Life Insurance Company in 1909, the U.S Supreme Court ruled in favor of the insurance company. The issue at hand was whether or not a state could tax premiums on policies issued by an out-of-state insurer to residents within its borders when those premiums were collected outside that state's jurisdiction. In this instance, Louisiana attempted to impose such taxes on New York Life Insurance Company for policies sold to Louisiana residents but where payments were made and received in New York. The court held that these transactions took place entirely within another state (New York), and therefore fell outside Louisiana’s taxing authority under constitutional principles governing interstate commerce and due process rights.

In the dissenting opinion for the case of Board of Assessors of the Parish of Orleans, The City Of New Orleans v. New York Life Insurance Company, Justice Holmes argued that there was no constitutional violation in taxing an insurance company's business within a state based on its total worldwide income. He disagreed with the majority's view that this constituted extraterritorial taxation and thus violated due process rights. Instead, he believed it was merely a practical way to assess taxes on businesses operating across multiple jurisdictions. Furthermore, he contended that if such tax assessments were deemed unconstitutional simply because they included out-of-state earnings or assets in their calculations, then many other common forms of taxation could also be challenged as unconstitutional under similar grounds - potentially leading to widespread disruption and uncertainty in tax law enforcement.