In the Southern Cotton Oil Company v. Texas case of 1904, the U.S. Supreme Court ruled in favor of Texas, upholding a state law that prohibited the sale of cottonseed oil products not clearly labeled as such to prevent misrepresentation as lard or butter. The Southern Cotton Oil Company argued that this law violated their Fourteenth Amendment rights by depriving them of property without due process and denying equal protection under the laws since other food producers were not subjected to similar labeling requirements. However, the court disagreed with these claims stating that public health was a legitimate concern for states and they had every right to enact regulations ensuring it even if those rules affected interstate commerce indirectly.

In the dissenting opinion for Southern Cotton Oil Company v. Texas, it was argued that the state of Texas did not have jurisdiction to regulate interstate commerce and therefore could not impose a tax on cottonseed oil produced outside of its borders but sold within them. The dissenting justices believed this case fell under federal jurisdiction as per the Commerce Clause in the U.S Constitution which gives Congress exclusive power over interstate trade. They contended that by allowing states to levy taxes or regulations on goods from other states, it would lead to protectionism and disrupt free trade among states. This view held that such actions were unconstitutional as they interfered with Congress's ability to regulate commerce "among several States". Thus, according to this perspective, Texas' imposition of a tax on out-of-state cottonseed oil infringed upon federal powers and disrupted national economic unity.