In the 1907 case of Armour Packing Company v. United States, the Supreme Court ruled on a dispute involving railroad freight rates. The Armour Packing Company had been granted lower rates by several railroads than those offered to other shippers for similar services, which led to allegations of preferential treatment and violation of the Interstate Commerce Act. The U.S. government sued under this act, claiming that these discriminatory practices were unlawful and harmful to competition. The Supreme Court upheld the decision made by lower courts in favor of the U.S., ruling that such rate discrimination was indeed illegal under federal law. It found that giving one company an advantage over others through special shipping rates constituted unjust discrimination between shippers as prohibited by Section 3 of the Interstate Commerce Act. This landmark decision reinforced fair trade principles within interstate commerce and helped establish important precedents regarding anti-discrimination laws in business transactions.

In the dissenting opinion for Armour Packing Company v. United States, it was argued that the Interstate Commerce Commission (ICC) did not have the authority to regulate private contracts between railroads and shippers. The dissenting justices believed that such regulation violated principles of free enterprise and contract law. They contended that if a railroad company voluntarily entered into an agreement with a shipper, then it should be allowed to honor those terms without interference from government regulators. Furthermore, they expressed concern about potential overreach by regulatory bodies like ICC in their attempts to control business practices which could stifle competition and innovation within industries.