In the 1921 case of Terral v. Burke Construction Company, the U.S. Supreme Court ruled in favor of Burke Construction Company, a corporation based outside Arkansas that had been denied permission to do business within the state due to its refusal to consent to service of process there for causes unrelated to its activities in Arkansas. The court held that this denial violated the Fourteenth Amendment's Due Process Clause and was an unreasonable burden on interstate commerce. The ruling emphasized that states cannot impose conditions on foreign corporations which infringe upon their constitutional rights or interfere with federal authority over interstate commerce.

In the dissenting opinion for Terral v. Burke Construction Company, Justice Holmes argued that the majority's decision was inconsistent with previous rulings of the Court and violated principles of federalism. He contended that Arkansas had a right to regulate its own internal affairs without interference from outside corporations or other states. The state law in question required foreign corporations doing business within Arkansas to consent to being sued there as a condition of their license. According to Holmes, this requirement did not violate due process rights because it simply regulated how lawsuits could be brought against companies operating within the state's borders - an area traditionally left up to individual states' discretion under our system of federalism. Furthermore, he pointed out that similar laws existed in many other states at the time and were generally accepted as constitutional by both courts and legal scholars alike.