In the 1897 case of Backus v. Fort Street Union Depot Company, the U.S Supreme Court ruled in favor of the defendant, Fort Street Union Depot Company. The plaintiff, Backus, was a shareholder who sued to prevent the company from issuing additional stock without receiving payment for it. He argued that this would dilute his shares and decrease their value. However, he had signed an agreement when purchasing his shares which allowed for such action by the company under certain circumstances. The court held that since Backus voluntarily entered into this contract with full knowledge of its terms and conditions at time of purchase, he could not later challenge those same provisions simply because they no longer suited him or were disadvantageous to him as a shareholder.

In the dissenting opinion for Backus v. Fort Street Union Depot Company, Justice Harlan argued that the majority's decision was a misinterpretation of both Michigan state law and federal constitutional law. He contended that under Michigan law, railroads were public highways and therefore subject to regulation by the state legislature in matters concerning public safety or convenience. Furthermore, he disagreed with the majority's view that such regulations violated railroad companies' due process rights under the Fourteenth Amendment. In his view, these laws did not deprive them of their property without due process but simply regulated its use for public benefit - an inherent power of any sovereign government. Therefore, he believed it was within Michigan’s right to require all trains stopping at Detroit to stop at one central depot if it deemed this necessary for public safety or convenience.