In the case of Chesapeake & Potomac Telephone Company v. United States, 1929, the U.S. Supreme Court ruled that a telephone company was not exempt from paying taxes on its property used for interstate business under an act passed by Congress in 1914. The court held that while the law did provide tax exemptions to railroad companies and other transportation businesses involved in interstate commerce, it did not extend these same privileges to telephone companies. The decision upheld a lower court ruling which had ordered the Chesapeake & Potomac Telephone Company to pay back taxes owed on its property used for conducting interstate business.

In the dissenting opinion for Chesapeake & Potomac Telephone Company v. United States, Justice Stone argued that the majority's decision was inconsistent with previous rulings and principles of administrative law. He contended that the Interstate Commerce Commission (ICC) had overstepped its authority by ordering a reduction in rates without sufficient evidence to justify such action. Furthermore, he criticized the ICC's reliance on general statistics rather than specific data about Chesapeake & Potomac’s operations and costs. According to Justice Stone, this approach violated due process rights because it did not provide an adequate opportunity for companies to challenge rate reductions based on their individual circumstances. He also expressed concern about potential harm to public interest if regulatory agencies could arbitrarily lower rates without proper justification or consideration of possible adverse effects on service quality and financial stability of regulated entities.