In Railroad Co. v. Alabama, the United States Supreme Court was asked to decide whether a state could impose a tax on a railroad company that operated within its borders. The railroad company argued that the tax was unconstitutional because it violated the Commerce Clause of the United States Constitution. The Court held that the tax was constitutional because it was a valid exercise of the state's power to tax and regulate businesses within its borders. The Court also held that the tax did not discriminate against interstate commerce, as the railroad company argued, because it was applied equally to all railroads operating within the state. The Court further held that the tax was not an undue burden on interstate commerce, as the railroad company argued, because it was not excessive or discriminatory. The Court concluded that the tax was a valid exercise of the state's power to tax and regulate businesses within its borders and did not violate the Commerce Clause.

Justice Field delivered the dissenting opinion in Railroad Co. v. Alabama, arguing that the state of Alabama had violated its contract with the railroad company by passing a law that imposed additional taxes on it beyond what was agreed upon in their original agreement. He argued that this constituted an unconstitutional taking of property without due process and compensation as guaranteed under the Fifth Amendment to the United States Constitution. Justice Field further asserted that while states have broad powers to regulate businesses within their borders, they cannot do so if such regulations violate existing contracts between private parties or interfere with vested rights protected by federal law. He concluded his dissent by noting that even though Congress has granted certain powers to states over interstate commerce, those powers must be exercised consistent with constitutional protections for individuals and corporations alike.