The U.S. Supreme Court case Stebbins and Hurley, as Executrix and Executor of the Will of Watkinson, Deceased v. Riley, Controller of the State of California in 1924 revolved around a dispute over inheritance tax laws in California. The executors (Stebbins and Hurley) argued that certain provisions within these laws were unconstitutional because they taxed property located outside the state if it was left to residents by non-residents who died while owning it. They claimed this violated both due process rights under the Fourteenth Amendment and also infringed upon federal jurisdiction over interstate commerce. However, the court ruled against them stating that states have broad powers to levy taxes for public purposes unless expressly prohibited by constitutional law or principles. It held that there was no violation since taxation did not interfere with any federal power nor deprive anyone without due process; rather it merely imposed an obligation on beneficiaries receiving such properties irrespective of where those assets are situated.

In the dissenting opinion for Stebbins and Hurley v. Riley, Justice McReynolds argued that California's inheritance tax law was unconstitutional as it violated the Fourteenth Amendment by imposing a higher rate of taxation on non-residents than residents. He contended that this discriminatory treatment based on residency status was not justified by any difference in protection or benefits provided to residents versus non-residents. The majority ruling upheld the state's right to impose such differential rates, but Justice McReynolds disagreed, asserting that there should be equal protection under the law regardless of one’s place of residence.