In the 1916 case of Chicago, Milwaukee & St. Paul Railway Company v. State Public Utilities Commission of Illinois, the U.S Supreme Court ruled in favor of the railway company. The dispute arose when the state commission ordered a change to an existing grade crossing without providing compensation for property taken or damaged during construction as required by law under eminent domain principles. The court held that this action violated both federal and state constitutions which protect private property from being taken for public use without just compensation. Therefore, it was decided that any order issued by a public utilities commission requiring railroads to alter their tracks at their own expense is unconstitutional if it results in taking or damaging property rights without due process and fair compensation.

In the dissenting opinion for the case of Chicago, Milwaukee & St. Paul Railway Company v. State Public Utilities Commission of Illinois, Justice Oliver Wendell Holmes Jr., joined by Justice Charles Evans Hughes, argued that the court majority had overstepped its authority in striking down a state regulation as unconstitutional without sufficient evidence to support such a decision. He contended that it was not within the purview of courts to second-guess legislative or regulatory decisions unless there was clear proof those decisions were unreasonable or arbitrary. In this case, he believed no such proof existed and hence disagreed with his colleagues' ruling against an Illinois law requiring railroads to install safety devices on their trains operating within state borders.