The Ann Arbor Railroad Company v. United States case in 1929 revolved around the legality of a rate order issued by the Interstate Commerce Commission (ICC). The ICC had ordered an increase in freight rates for railroads, which was challenged by several railroad companies including the Ann Arbor Railroad Company. They argued that this order violated their rights under the Fifth Amendment to due process and just compensation as it would cause them significant financial loss. However, after reviewing evidence presented regarding operating costs and revenue needs of these railroads, the Supreme Court upheld ICC's decision stating that there was no violation of constitutional rights since it is within ICC's power to regulate interstate commerce rates based on public interest considerations.

In the dissenting opinion for Ann Arbor Railroad Company v. United States, Justice Stone argued that the Interstate Commerce Commission (ICC) did not have the authority to mandate a reduction in intrastate rail rates without first establishing that these rates were causing harm to interstate commerce. He contended that there was no evidence presented showing any such damage or threat of damage to interstate commerce by Michigan's intrastate railroad rates. The majority decision allowed ICC intervention based on potential future harm, but Justice Stone believed this was an overreach of their powers and could lead to unnecessary federal interference in state affairs. He also expressed concern about setting a precedent where federal agencies could intervene preemptively rather than reactively, potentially disrupting balance between state and federal power.