In the case of Porto Rico Sugar Company v. Lorenzo, 1911, the U.S Supreme Court was tasked with determining whether a Puerto Rican court had jurisdiction over a dispute involving land ownership between an American company and local residents. The Porto Rico Sugar Company claimed that it owned certain lands in Puerto Rico based on deeds from Spanish authorities dating back to before Spain ceded control of Puerto Rico to the United States following the Spanish-American War. Local residents disputed this claim, arguing that they held rightful title to these lands through long-term possession and use. The Supreme Court ruled against the sugar company stating that after sovereignty transferred from Spain to America post-war, all property rights were subject to American law which required registration for valid claims - something not done by Porto Rico Sugar Co. This ruling upheld previous decisions made by lower courts in favor of local inhabitants' right over their ancestral lands despite foreign corporate interests.

In the dissenting opinion for Porto Rico Sugar Company v. Lorenzo, Justice Oliver Wendell Holmes Jr. argued that the majority's decision to uphold a Puerto Rican law taxing foreign corporations at a higher rate than domestic ones was inconsistent with previous rulings and principles of fairness. He contended that this ruling violated the equal protection clause of the Fourteenth Amendment by treating similarly situated entities differently based on their place of incorporation. Furthermore, he suggested that it contradicted prior decisions which held that states could not discriminate against out-of-state businesses in favor of local ones without violating constitutional protections for interstate commerce. In his view, these same principles should apply to territories like Puerto Rico as well as states within the Union.