The U.S. Supreme Court case Arkadelphia Milling Company v. St. Louis Southwestern Railway Company et al., 1918, revolved around the issue of freight rates set by a state railroad commission and whether they were discriminatory or not under federal law. The Arkadelphia Milling Company sued the railway company for charging higher freight rates than those established by the Arkansas Railroad Commission, arguing that these charges violated both state laws and the Interstate Commerce Act which prohibits unreasonable and discriminatory pricing in interstate commerce. The court ruled in favor of St. Louis Southwestern Railway Co., stating that while states have authority to regulate intrastate commerce, they cannot interfere with interstate commerce as it falls under federal jurisdiction - a principle known as "federal preemption". It was determined that although some of the goods transported originated within Arkansas (intrastate), their final destination was outside of Arkansas (interstate). Therefore, this fell under federal regulation rather than state control. This ruling reinforced principles related to dual sovereignty between states and federal government over matters concerning trade regulations.

In the dissenting opinion for Arkadelphia Milling Company v. St. Louis Southwestern Railway Company, it was argued that the court majority had overstepped its authority by substituting its judgment for that of a regulatory body (the Interstate Commerce Commission). The dissenters believed that the commission's decision to allow higher freight rates should have been upheld because it was not shown to be unreasonable or unlawful. They contended that courts should defer to such agencies unless there is clear evidence of error or abuse of power, and they saw no such evidence in this case. Furthermore, they pointed out inconsistencies in how the majority applied legal principles regarding rate regulation and suggested these inconsistencies undermined their conclusion.