In the case of Black and White Taxicab Co. v. Brown and Yellow Taxicab Co., the Brown and Yellow Cab Company, a Kentucky corporation, sought to create a business association with the Louisville and Nashville Railroad, where Brown and Yellow would have a monopoly on soliciting passengers of the railroad, effectively eliminating the competition, the Black and White Cab Co.

• Such an agreement was illegal under Kentucky common law, as interpreted by Kentucky's highest court. So, Brown & Yellow lost.
• This case came out before the rules about a corporation existing in their principle place of business were defined.
• Brown and Yellow dissolved itself, reincorporated in Tennessee, and executed the agreement there, where such an agreement was legal, bringing suit against Black and White in a Kentucky Federal Court to prevent them from soliciting passengers.
• The Federal Court upheld the agreement, citing Swift v. Tyson, and arguing that under general Federal common law, the agreement was valid. If Brown and Yellow had brought suit in a Kentucky state court, the agreement would not have been upheld.
• This case would have turned out differently if it had happened after the Erie Doctrine was developed. (see Erie Railroad Co. v. Tompkins)