In the case of Susquehanna Coal Company v. Mayor and Council of the City of South Amboy, 1912, the Supreme Court ruled in favor of Susquehanna Coal Company. The company had been using a coal tipple located on navigable waters to unload its coal from barges onto railroad cars for distribution. However, an ordinance passed by South Amboy required that all such tipples be licensed and regulated by city officials. The court found this requirement unconstitutional because it interfered with interstate commerce which is under federal jurisdiction according to Article I Section 8 Clause 3 (the Commerce Clause) of the U.S Constitution. Therefore, local governments cannot impose regulations or restrictions on activities related to interstate commerce without violating constitutional law.

In the dissenting opinion for Susquehanna Coal Company v. Mayor and Council of the City of South Amboy, Justice Holmes argued that a city ordinance requiring coal to be screened before being shipped was not an unreasonable regulation on commerce. He believed that it fell within the police power of states to regulate local matters in order to protect public health and safety. The majority held this ordinance as unconstitutional interference with interstate commerce but Holmes disagreed, asserting that such regulations were necessary for protecting citizens from harmful dust produced by unscreened coal. He contended that if every state had similar laws, there would still be no burden upon interstate trade beyond what is essential for maintaining public health standards locally.