In the 1935 case Baltimore & Ohio Railroad Co. et al. v. United States et al., the U.S Supreme Court ruled in favor of the United States, upholding a decision by the Interstate Commerce Commission (ICC). The ICC had ordered several railroads to stop giving preferential treatment to Standard Oil Company by charging it lower rates for transporting its oil than they charged other companies. The railroads argued that this was not discriminatory because Standard Oil provided its own tank cars and loading facilities, which reduced their costs, but these arguments were rejected both by the ICC and then by the court on appeal. The Supreme Court held that providing such discounts constituted unjust discrimination under federal law even if there were cost differences involved.

In the dissenting opinion for Baltimore & Ohio Railroad Co. et al. v. United States et al., it was argued that the Interstate Commerce Commission (ICC) had overstepped its authority by ordering a reduction in freight rates without sufficient evidence to justify such action. The dissenters believed that the ICC's decision was arbitrary and lacked substantial supporting data, thus violating due process rights of railroads under Fifth Amendment of U.S Constitution. They contended that while ICC has power to regulate railroad rates, this power should be exercised judiciously and based on concrete proof demonstrating necessity for rate adjustment rather than mere speculation or assumption about potential harm to public interest from existing rates.