In the Yazoo and Mississippi Railroad Company v. Adams case of 1900, the U.S. Supreme Court ruled in favor of Adams, upholding a decision by the Mississippi state courts that required railroads to pay taxes on their property within the state. The railroad company had argued that it was exempt from such taxation due to an agreement with another state (Alabama), but this argument was rejected by both lower courts and ultimately by the Supreme Court as well. The court held that states have sovereign power over taxation within their borders and cannot be bound by agreements made between private corporations and other states. This ruling affirmed states' rights to tax businesses operating within their jurisdiction regardless of any arrangements those businesses may have elsewhere.

In the dissenting opinion of Yazoo and Mississippi Railroad Company v. Adams, it was argued that the majority's decision to uphold a state law requiring railroads to provide separate but equal accommodations for black and white passengers infringed upon interstate commerce regulations. The dissent maintained that this issue fell under federal jurisdiction as per the Commerce Clause of the U.S Constitution, not state law. Furthermore, they contended that enforcing such segregation laws could potentially disrupt trade between states by creating inconsistent travel conditions across different jurisdictions. They also expressed concerns about potential violations of individual civil rights protected by the Fourteenth Amendment due to racial discrimination inherent in these segregation policies.