Black and White Taxicab Co. v. Brown and Yellow Taxicab Co. 276 U.S. 518 (1928) 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. Black and White sued. The Kentucky Supreme Court found for Black and White. The Kentucky Supreme Court found that such an agreement was illegal under Kentucky common law. Note that 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 same exact business agreement with Louisville there, Unlike Kentucky, in Tennessee, that kind of agreement was perfectly legal. Brown and Yellow sued Black and White in a Kentucky Federal Court to prevent them from soliciting passengers. The Federal Court found for Brown and Yellow. The Federal Court upheld the agreement, citing Swift v. Tyson (41 U.S. 1 (1842)), and arguing that under general Federal common law, the agreement was valid. The Court didn't care whether the agreement would be legal under Kentucky law or Tennessee law, they only considered whether it would be legal under Federal common law. Note that if Brown and Yellow had brought suit in a Kentucky State court, then Kentucky common law would have applied and 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 (304 U.S. 64 (1938)).