In the 1903 case of Allen v. Pullman's Palace Car Company, the U.S. Supreme Court ruled in favor of Pullman's Palace Car Company, a railroad company that provided sleeping cars for long-distance train travel. The plaintiff, Allen, had sued the company after he was denied service due to his race and forced to ride in a second-class car despite having purchased a first-class ticket. However, the court held that since Pullman’s Palace Car Co., as an interstate carrier operating under Illinois law at that time did not have any legal obligation to provide equal accommodations for all races on its trains; it could therefore legally deny services based on racial discrimination without violating any federal laws or constitutional rights.

In the dissenting opinion for Allen v. Pullman's Palace Car Company, it was argued that the majority had erred in their interpretation of the Interstate Commerce Act. The dissenting justices believed that the act did not intend to prohibit all forms of discrimination by railroad companies, but rather only those forms which were unjust or unreasonable. They contended that there was no evidence presented in this case to suggest that Pullman's Palace Car Company had engaged in any such unfair practices. Furthermore, they disagreed with the majority's view on what constituted a "like and contemporaneous service" under the act, arguing instead for a more narrow definition based on specific circumstances and conditions at hand during each individual transaction between a railway company and its customers.