The U.S. Supreme Court case Pacific Co., Ltd. v. Johnson, State Treasurer in 1931 revolved around the issue of taxation on interstate commerce and its constitutionality under the Commerce Clause of the Constitution. The appellant, a shipping company incorporated in Washington but operating between ports in California and other states or foreign countries, challenged a tax imposed by California on gross receipts from such operations as an unconstitutional burden on interstate commerce. However, the court upheld the state's right to impose this tax stating that it was not discriminatory against out-of-state entities nor did it create any direct burden upon interstate commerce since it was levied equally upon all companies doing business within its jurisdiction regardless of whether their activities were local or involved interstate trade.

In the dissenting opinion for Pacific Co., Ltd. v. Johnson, State Treasurer, 1931, it was argued that the majority's decision to uphold a California law taxing foreign corporations violated both the Due Process and Commerce Clauses of the Constitution. The dissenting justices believed that this tax unfairly burdened interstate commerce by placing an additional financial obligation on out-of-state businesses operating in California compared to their in-state counterparts. They also contended that due process was not served because these companies were being taxed without having sufficient connections or activities within California to justify such taxation under existing legal principles and precedents. Furthermore, they expressed concern about potential retaliatory measures from other states which could lead to a chaotic situation detrimental to national unity and economic stability.