The Connolly v. Union Sewer Pipe Company case in 1901 revolved around the Sherman Antitrust Act, which prohibits certain business activities that reduce competition in the marketplace. The plaintiff, Connolly, accused Union Sewer Pipe Company of violating this act by forming a trust to control prices and eliminate competition within the sewer pipe industry. However, the Supreme Court ruled against Connolly stating that while trusts are illegal under federal law if they restrain trade or commerce among states or with foreign nations; it does not apply when such restraint is imposed as an indirect result of lawful contracts or agreements pertaining solely to intrastate commerce (commerce occurring within one state). In other words, since Union Sewer Pipe's actions were confined only to Illinois and did not directly affect interstate commerce - despite having some indirect effects - they were deemed legal under federal law.

In the dissenting opinion for Connolly v. Union Sewer Pipe Company, Justice Harlan argued that the Sherman Act should not be interpreted to prohibit all contracts or agreements that may potentially restrain trade but only those which unduly and unreasonably do so. He contended that a literal interpretation of the law would lead to absurd results as it could outlaw any contract or agreement involving commerce among states, no matter how reasonable or necessary they might be. Furthermore, he disagreed with the majority's view on monopolies, arguing that they are inherently harmful regardless of their impact on prices because they stifle competition and hinder economic freedom. He also criticized the Court's decision for failing to provide clear guidelines about what constitutes an illegal restraint of trade under Sherman Act.