In the United States v. Stone & Downer Company et al., 1926, the Supreme Court dealt with a dispute over customs duties on imported merchandise. The Stone & Downer Company and other importers had brought in goods from foreign countries which were classified by the Collector of Customs as "compositions similar to two or more materials." This classification resulted in higher duty rates under paragraph 7 of the Tariff Act of October 3, 1913. The importers protested this decision, arguing that their goods should have been classified under different paragraphs resulting in lower duties. The case was taken to court where it was ruled that these items did not fall into any specific category listed within paragraph seven but rather fell into a general 'basket' provision for mixed materials not otherwise provided for. Therefore, they should be subjected to lower tariff rates than those initially imposed by the Collector of Customs. This ruling highlighted how important accurate classification is when determining custom duties and set precedent for future cases involving disputes over tariffs on imported goods.

In the dissenting opinion for United States v. Stone & Downer Company et al., Justice Holmes disagreed with the majority's decision to uphold a tax on foreign-built yachts, arguing that it was unconstitutional as it violated the uniformity clause of Article I, Section 8 of the Constitution. He argued that this clause requires all duties, imposts and excises to be uniform throughout the United States. The tax in question was only applied to yachts built abroad and not those constructed domestically, creating an uneven application of taxation which he believed contradicted this constitutional requirement. Furthermore, he contended that there is no justification for such a discriminatory tax under any interpretation or precedent related to importation laws or customs duties.