The Supreme Court upheld state use of the initiative and referendum to make laws as being compatible with the Constitution’s promise of a republican form of government.
Oregon, along with other relatively new Western states, used initiatives and referendums to give voters the option of legislating directly on some questions. The state used this power to impose a tax on the phone companies. The phone companies could no longer use their lobbying power in the legislature as effectively, so Pacific States Telephone and Telegraph Company sued, attempting to have practices such as the initiative and referendum declared contrary to the Constitution’s promise of a republican form of government. Relying on Luther v. Borden
Luther v. Borden