In the case of City of Philadelphia et al. v. New Jersey et al., 1976, the U.S. Supreme Court ruled that states cannot discriminate against out-of-state waste under the Commerce Clause of the Constitution. The state of New Jersey had passed a law prohibiting importation into its territory any solid or liquid waste which originated outside its borders in an effort to protect public health and natural resources from pollution caused by such wastes disposal activities. However, this was challenged by several cities including Philadelphia who argued that it violated their rights under interstate commerce clause as they were unable to dispose off their garbage in New Jersey's landfills due to this law. The court held that while states have legitimate interest in protecting environment and can regulate matters related with garbage disposal within their jurisdiction, they cannot use these powers to discriminate against other states' economic interests without valid reasons supported by substantial evidence showing harm or risk involved if such restrictions are not imposed. This decision reaffirmed principle of non-discrimination among states on issues affecting interstate commerce and clarified limits on regulatory powers available for environmental protection at state level.

In the dissenting opinion for CITY OF PHILADELPHIA et al. v. NEW JERSEY et al., Justice Rehnquist argued that states should have the right to protect their natural resources and maintain a clean environment, even if it means discriminating against other states in terms of waste disposal. He contended that New Jersey's ban on out-of-state waste was not an attempt to regulate interstate commerce but rather a legitimate exercise of its police powers aimed at preserving public health and safety. The majority ruling, he believed, failed to recognize this important state interest and instead prioritized economic considerations over environmental ones.