In the case of Beaumont, Sour Lake & Western Railway Company et al. v. United States et al., 1930, the U.S Supreme Court was tasked with determining whether a railroad company could be compelled to provide service on a line that had been deemed unprofitable and subsequently abandoned by its owners. The Interstate Commerce Commission (ICC) had ordered the railway company to continue operations despite their financial losses, arguing that public convenience and necessity required it. However, the railway companies contended this order violated their rights under due process clause of Fifth Amendment as it forced them into continued loss without just compensation. The Supreme Court sided with ICC stating that railroads were not entitled to earn profits from every part of their property separately but rather from entire system as whole; thus they could be required to maintain an unprofitable segment if overall operation remained profitable or if there was overriding public need for service in question.

In the dissenting opinion for Beaumont, Sour Lake & Western Railway Company et al. v. United States et al., Justice Stone argued that the Interstate Commerce Commission (ICC) did not have authority to regulate intrastate rates in order to maintain interstate rate structures. He contended that Congress had only given ICC power over intrastate commerce when it directly impacted interstate commerce and there was no evidence of such impact in this case. Furthermore, he believed that the majority's decision would allow federal control over all aspects of local business whenever they are linked with an interstate system, which he saw as a dangerous expansion of federal power into areas traditionally controlled by states.