In the case of Baltimore & Ohio Railroad Company v. United States in 1922, the Supreme Court ruled on a dispute involving railroad freight rates. The Interstate Commerce Commission (ICC) had ordered reduced rates for certain commodities transported by railroads, which was challenged by the Baltimore & Ohio Railroad Company. They argued that these reductions were unjust and unreasonable as they did not allow them to earn a fair return on their property invested in transportation services. However, the Supreme Court upheld ICC's decision stating that it was within its power to regulate interstate commerce including setting reasonable and just railway rates after considering all relevant factors such as cost of service, value of service provided etc., even if this meant lower returns for railways than what they expected or desired.

In the dissenting opinion for Baltimore & Ohio Railroad Company v. United States, Justice McReynolds argued that the Interstate Commerce Commission (ICC) had overstepped its bounds in ordering a reduction of rates without providing sufficient evidence to justify such action. He contended that while the ICC has broad powers to regulate interstate commerce, it does not have unlimited authority and must provide substantial proof when making decisions affecting private property rights. In this case, he believed there was no adequate demonstration of unreasonableness or discrimination in existing rates set by railroads which would warrant interference by the ICC. Furthermore, he expressed concern about potential economic consequences if regulatory bodies could arbitrarily lower rates without proper justification.