The U.S. Supreme Court case Baltimore & Ohio Railroad Company v. United States in 1922 revolved around the issue of whether or not a railroad company could be held liable for damages caused by fire that started from sparks emitted by one of its locomotives. The court ruled in favor of the United States, stating that under the Federal Safety Appliance Act and Boiler Inspection Act, railroads were responsible for maintaining safe equipment and operations to prevent such incidents. Therefore, if a fire was indeed caused due to negligence on part of the railway company's maintenance or operation procedures, they would be held accountable for any resulting damage or loss.

In the dissenting opinion for Baltimore & Ohio Railroad Company v. United States, Justice McReynolds disagreed with the majority's view that the Interstate Commerce Commission (ICC) had authority to determine fair and reasonable joint rates without first determining whether existing rates were unjust or unreasonable. He argued that this interpretation of ICC’s powers was a departure from precedent and an overreach of its statutory authority under the Interstate Commerce Act. According to him, before setting new rates, it should be necessary for ICC to find current ones unfair or unreasonable; otherwise, it would mean giving arbitrary power to administrative bodies which could lead them into making decisions based on their own preferences rather than lawfully established standards. Furthermore, he expressed concern about potential harm such broad regulatory power might cause to private property rights if not properly checked.