In the case of Baltimore & Ohio Railroad Company v. United States et al., 1927, the Supreme Court examined whether a railroad company could be held liable for damages to goods during transportation under the Carmack Amendment to the Interstate Commerce Act. The court ruled that even though there was no negligence on part of the carrier, it would still be held responsible for any damage or loss incurred during transit unless it could prove that one of five exceptions outlined in the amendment applied. These exceptions included an act of God, public enemy action, shipper fault, public authority order or inherent vice/ nature of goods transported. This ruling established strict liability for carriers and clarified their responsibilities under federal law.

In the dissenting opinion for Baltimore & Ohio Railroad Company v. United States et al., Justice Stone argued that the Interstate Commerce Commission (ICC) did not have the authority to order a railroad company to construct and maintain an expensive bridge, as it was beyond their regulatory powers. He contended that such orders could only be made by Congress itself, or under its direct authorization. Furthermore, he disagreed with the majority's interpretation of "just and reasonable" rates in relation to public convenience and necessity; stating this should not extend to compelling railroads into large-scale construction projects without clear legislative direction. The justice also expressed concern about potential abuse of power if agencies like ICC were allowed unchecked discretion over private property rights without explicit statutory guidance from Congress.