In the case of Pullman's Palace Car Company v. Hayward in 1890, the U.S Supreme Court ruled on a dispute involving interstate commerce and state taxation. The Pullman's Palace Car Company, an Illinois-based corporation that manufactured and operated sleeping cars for railroads across multiple states, was challenging a tax levied by California on its operations within the state. The company argued that this tax interfered with interstate commerce and violated federal law. The court disagreed with Pullman’s argument, ruling in favor of California. It held that while states cannot interfere directly with interstate commerce through taxation or other means (which is under Congress' exclusive control), they can still impose taxes on corporations operating within their borders as long as those taxes do not discriminate against out-of-state entities or impede free trade among states. This decision affirmed the principle of dual sovereignty where both federal government and individual states have powers to regulate different aspects of business activities without infringing upon each other’s jurisdiction.

In the dissenting opinion for Pullman's Palace Car Company v. Hayward, Justice Lamar disagreed with the majority's ruling that a state could not tax out-of-state corporations operating within its borders. He argued that if a corporation chooses to do business in another state and uses its resources, it should be subject to taxation by that state just like any other resident or local business entity. According to him, this was necessary for maintaining fairness and equality among businesses regardless of their origin or domicile status. Furthermore, he contended that denying states this right would undermine their sovereignty and fiscal autonomy while granting undue privileges to foreign corporations at the expense of domestic ones. This view contradicted the court’s decision which held such taxes as unconstitutional interference with interstate commerce.