In the 1901 case of Schrimpscher v. Stockton, the U.S. Supreme Court dealt with a dispute over land ownership in California that originated from an 1864 Act of Congress granting lands to facilitate construction of railroads and telegraph lines. The plaintiff, Schrimpscher, claimed title through preemption rights under this act while defendant Stockton held title by patent issued by the United States government after completion of railroad construction. The court ruled in favor of Stockton stating that once a company had completed its line and received patents for granted lands from the government, those titles were absolute and could not be challenged on grounds that they should have been preempted earlier under other provisions within the same law or any other laws related to public lands disposal at large.

The dissenting opinion in the Schrimpscher v. Stockton case argued that the majority's decision to uphold a tax on foreign insurance companies operating within California was unconstitutional. The dissent contended that this tax violated the Commerce Clause of the U.S Constitution, which prohibits states from passing laws that unduly burden interstate commerce. They believed that by imposing a higher tax rate on out-of-state insurance companies than those based in California, it unfairly discriminated against interstate commerce and gave an unfair advantage to local businesses over their out-of-state competitors. Furthermore, they argued such protectionist measures were exactly what the framers intended to prevent when drafting the Commerce Clause.