In the case of Puerto Rico v. The Shell Co., 1937, the Supreme Court ruled in favor of Puerto Rico. The issue at hand was whether or not a tax imposed by the government of Puerto Rico on foreign corporations doing business within its territory violated the U.S Constitution's commerce and due process clauses. The Shell Company argued that it did, as they were being taxed for importing oil into Puerto Rico from Venezuela - an action which they claimed fell under interstate commerce and thus should be exempt from local taxation according to federal law. However, Justice Benjamin Cardozo disagreed with this interpretation, stating that while Congress had indeed given certain constitutional protections to territories like Puerto Rico, these did not extend to complete immunity from territorial taxation for foreign corporations operating there. He further noted that such taxes were necessary for supporting local governments in their efforts towards self-sufficiency and development.

The dissenting opinion in the case of Puerto Rico v. The Shell Co., argued that the majority's decision to uphold a tax imposed by Puerto Rico on foreign corporations was inconsistent with previous rulings and principles established by the Supreme Court. They contended that this ruling effectively allowed for discriminatory taxation against interstate commerce, which is contrary to constitutional protections. Furthermore, they disagreed with the majority's interpretation of what constitutes "foreign" commerce, arguing that it should include trade between U.S territories and states as well as international transactions. This broader definition would make such taxes unconstitutional under existing precedents protecting interstate commerce from undue burdens or discrimination.