In the case of Davis v. Cornwell, 1923, the Supreme Court examined whether a provision in the Transportation Act of 1920 that allowed for an agent appointed by the President to fix rates and divisions between rail carriers was constitutional. The respondent, Cornwell, argued that this power was legislative in nature and could not be delegated to an executive officer under Article I Section 1 of the Constitution which vests all legislative powers in Congress. However, Justice Brandeis delivered a unanimous opinion rejecting this argument on behalf of the court. He stated that while it is true Congress cannot delegate its lawmaking authority to another branch or entity; it can make laws with flexible terms allowing administrative officers discretion when applying them based on facts presented within defined limits set by Congress itself. Therefore, since these rate-making provisions were part of a comprehensive regulatory scheme established by Congress with clear guidelines for their application they did not violate non-delegation principles.

In the dissenting opinion for Davis v. Cornwell, Justice Holmes disagreed with the majority's interpretation of the Transportation Act of 1920. He argued that Congress intended to give broad powers to the President and his agents under this act in order to ensure efficient operation and management of railroads during a critical period after World War I. The majority's decision, according to Holmes, undermined these powers by allowing individual states' laws on garnishment proceedings (a legal process by which a creditor can collect what a debtor owes) to interfere with federal control over railroad wages. This could potentially disrupt railway operations if employees found their wages being seized under different state laws. Therefore, he believed that federal law should supersede state law in this context due its national importance and scope.