In the 1980 case Western & Southern Life Insurance Co. v. State Board of Equalization of California, the U.S Supreme Court ruled that a California law taxing out-of-state insurance companies at a higher rate than in-state companies was unconstitutional. The court found that this tax violated both the Commerce Clause and the Equal Protection Clause of the Constitution as it discriminated against interstate commerce by favoring local businesses over their out-of-state competitors. The decision emphasized that states cannot use their tax systems to give an advantage to in-state businesses at the expense of those from other states, reinforcing principles established in previous cases such as Boston Stock Exchange v. State Tax Commission and Complete Auto Transit Inc., v Brady.

In the dissenting opinion for Western & Southern Life Insurance Co. v. State Board of Equalization of California, Justice Brennan disagreed with the majority's decision that upheld a California tax on out-of-state insurance companies as constitutional under the Commerce Clause. He argued that this ruling contradicted previous decisions by allowing states to discriminate against interstate commerce and impose burdensome taxes on out-of-state businesses without any substantial justification or connection to services provided by the state. Furthermore, he contended that such discriminatory taxation could lead to economic protectionism and retaliatory measures from other states, which would undermine national unity and free trade among states - key principles underlying the Commerce Clause in his view.