In the case of Arkansas Natural Gas Company v. Arkansas Railroad Commission et al., 1922, the U.S. Supreme Court was asked to determine whether a state could regulate rates for gas sold and transported within its borders when that gas originated from another state. The court held that once natural gas crosses into a state's boundaries, it becomes part of intrastate commerce and can be regulated by the state as long as such regulation does not interfere with interstate commerce or violate federal law. This decision upheld an order by the Arkansas Railroad Commission setting maximum rates for natural gas sold in Arkansas even though it came from wells located in Louisiana and Texas.

In the dissenting opinion for Arkansas Natural Gas Company v. Arkansas Railroad Commission et al., Justice McReynolds disagreed with the majority's decision to uphold state regulation of natural gas prices. He argued that such regulation was a violation of due process rights under the Fourteenth Amendment, as it did not allow for fair competition or reasonable profit margins for companies involved in interstate commerce. Furthermore, he contended that this ruling would lead to an increase in litigation and uncertainty within the industry, as states could arbitrarily set rates without considering market conditions or company costs. Ultimately, Justice McReynolds believed that federal oversight was necessary to ensure uniformity and fairness in rate-setting across state lines.