In the case of White v. Island Transportation Company, 1913, the US Supreme Court was asked to determine whether a state could regulate interstate commerce by imposing taxes on out-of-state corporations operating within its borders. The Island Transportation Company, an out-of-state corporation conducting business in New York State, challenged a tax imposed by the state arguing that it violated their rights under the Commerce Clause of the U.S Constitution which gives Congress exclusive power over interstate commerce. However, Justice Oliver Wendell Holmes Jr., writing for a unanimous court held that states have authority to impose such taxes as long as they do not discriminate against or unduly burden interstate commerce. The court reasoned that while Congress has exclusive control over interstate commerce under the Commerce Clause; this does not prevent states from exercising their traditional taxing powers on businesses operating within their jurisdiction even if those businesses are involved in some form of interstate trade.

In the dissenting opinion for White v. Island Transportation Company, Justice Holmes disagreed with the majority's interpretation of negligence under maritime law. He argued that a ship owner should not be held liable for damages caused by an employee's negligent actions if those actions were outside the scope of their employment or contrary to explicit instructions. In this case, he believed that since the captain was explicitly instructed not to tow other vessels due to dangerous conditions and chose to ignore these orders, his decision constituted willful misconduct rather than simple negligence. Therefore, according to Holmes' view on vicarious liability principles in maritime law, it would be unjust and inappropriate for the ship owner (Island Transportation Company) to bear responsibility for damages resulting from such behavior.