In the 1938 case Baltimore & Ohio Railroad Co. et al. v. United States et al., the U.S Supreme Court ruled in favor of the United States, upholding a decision by the Interstate Commerce Commission (ICC). The ICC had ordered several railroad companies to cease discriminatory practices against certain shippers and ports along their routes, arguing that these practices violated federal law under the Interstate Commerce Act which prohibits unjust or unreasonable preferences or advantages for any particular person or locality. The railroads challenged this order, but both lower courts and ultimately the Supreme Court upheld it as valid exercise of regulatory power by ICC over interstate commerce.

In the dissenting opinion for Baltimore & Ohio Railroad Co. et al. v. United States et al., Justice McReynolds disagreed with the majority's decision to uphold the Interstate Commerce Commission's (ICC) order requiring railroads to install automatic train control devices, arguing that it exceeded its authority and violated due process rights of railroad companies under Fifth Amendment. He contended that ICC lacked legislative power to impose such a requirement without clear Congressional authorization, which was not present in this case. Furthermore, he argued that even if Congress had granted such authority, it would be unconstitutional as an improper delegation of legislative power by Congress to an administrative agency - a violation of separation-of-powers principle inherent in U.S Constitution structure.