In the case of Baltimore & Ohio Railroad Company v. United States (1922), the U.S Supreme Court ruled in favor of the federal government, upholding its authority to regulate railroad rates under the Interstate Commerce Act. The Baltimore & Ohio Railroad Company had challenged this authority, arguing that it violated their Fifth Amendment rights by not providing just compensation for private property taken for public use. However, Justice Oliver Wendell Holmes Jr., writing for a unanimous court, rejected this argument and held that rate regulation did not constitute a taking of property without due process or just compensation under the Fifth Amendment. Instead, he argued that such regulation was part of Congress's power to regulate interstate commerce and ensure fair competition among businesses.

In the dissenting opinion for Baltimore & Ohio Railroad Company v. United States, Justice McReynolds disagreed with the majority's interpretation of the Hepburn Act of 1906. He argued that Congress did not intend to give such broad authority to the Interstate Commerce Commission (ICC) over private contracts between railroads and shippers. According to him, this would be an unconstitutional delegation of legislative power by Congress. Furthermore, he contended that if a railroad company voluntarily agreed on rates lower than those set by ICC, it should not be penalized as long as these rates were just and reasonable under existing laws governing commerce among states. The justice believed that allowing ICC to interfere in voluntary agreements could lead to arbitrary rate-setting without considering individual circumstances or competition factors affecting different companies.