In the 1895 case of Planters' Insurance Company v. Tennessee for the Use of Memphis, the U.S Supreme Court dealt with a dispute over insurance claims related to property damage caused by a tornado in Memphis, Tennessee. The city had taken out policies with several insurance companies including Planters' Insurance Company. After the disaster, these insurers refused to pay on their policies arguing that they were not liable as per certain clauses in their contracts which exempted them from such liability under specific circumstances like natural disasters. However, upon review and interpretation of these contract provisions and relevant state laws governing insurance contracts at that time, the court ruled against Planters'. It held that such exemption clauses were invalid and unenforceable because they contravened public policy considerations inherent in state law regarding fair dealing between insurers and insured parties.

In the dissenting opinion for Planters' Insurance Company v. Tennessee, it was argued that the majority's decision to uphold a state law requiring out-of-state insurance companies to deposit bonds with the state as a condition of doing business there violated principles of interstate commerce and federalism. The dissent contended that such laws unfairly discriminated against out-of-state businesses by imposing burdensome requirements on them not faced by in-state competitors. Furthermore, they believed this case represented an overreach of states’ rights into areas more appropriately governed at a national level due to their impact on interstate trade and commerce. They feared this ruling could set a dangerous precedent allowing states too much power in regulating interstate businesses which could potentially disrupt economic unity across states.