In the 1923 case of Brooks-Scanlon Corporation v. United States, the U.S Supreme Court ruled that a private logging railroad owned by the Brooks-Scanlon Corporation was subject to regulation by the Interstate Commerce Commission (ICC). The corporation had argued that its railway, which transported logs from forests to mills and also provided passenger service for its employees and local residents, should not be considered a common carrier because it did not offer services to general public or engage in interstate commerce. However, due to an increase in non-employee passengers using their rail line over time, ICC sought regulatory oversight arguing that it had become a de facto common carrier. The court agreed with ICC's argument stating that even though initially set up as an industrial railroad serving primarily company needs; changes over time made it functionally equivalent to other commercial railways thus making them subject under federal regulations meant for common carriers.

In the dissenting opinion for Brooks-Scanlon Corporation v. United States, it was argued that the Interstate Commerce Commission (ICC) did not have jurisdiction over a logging railroad owned by Brooks-Scanlon because its primary purpose was to transport logs from forests to mills and not engage in interstate commerce. The dissenting justices believed that this case represented an unjustified expansion of federal power into areas traditionally regulated by states. They contended that if every business indirectly affecting interstate commerce fell under ICC's control, then virtually all businesses would be subject to federal regulation - something they felt went beyond what the framers intended when drafting the Constitution’s Commerce Clause. Furthermore, they expressed concern about potential negative implications on private property rights and state sovereignty due to such broad interpretation of federal powers.