In the 1932 case of Williams, Receiver of the Washington, Baltimore & Annapolis Railroad Co., v. Mayor and City Council of Baltimore, the Supreme Court ruled in favor of Williams. The dispute arose when the city council attempted to collect taxes from a railroad company that was under receivership (a form of bankruptcy where a receiver is appointed by court or creditors to run the company). The court held that while municipalities have broad powers to tax businesses within their jurisdiction, they cannot interfere with federal judicial proceedings such as receiverships. Therefore, any attempt by local authorities to impose taxes on property under control of a federal court-appointed receiver would be considered an infringement upon federal authority. This ruling reinforced principles regarding supremacy and immunity associated with federally controlled properties.

In the dissenting opinion for Williams v. Mayor and City Council of Baltimore, Justice Cardozo disagreed with the majority's decision to uphold a lower court ruling that allowed Baltimore to tax a railroad company operating in its jurisdiction. He argued that this was unconstitutional as it violated the Commerce Clause by placing an undue burden on interstate commerce. The justice contended that such taxation could potentially lead to economic protectionism among states, which would be detrimental to national unity and free trade within the country. Furthermore, he believed there should be clear guidelines regarding when local governments can impose taxes on businesses involved in interstate commerce so as not to disrupt or impede their operations unnecessarily.