In the 1966 case Denver & Rio Grande Western Railroad Co. et al. v. United States et al., the U.S Supreme Court ruled in favor of the government, upholding a decision by the Interstate Commerce Commission (ICC). The ICC had approved a merger between Union Pacific and several other railroads but denied Denver & Rio Grande's request to be included in this consolidation due to concerns about competition reduction and potential monopolistic control over certain routes. The court held that there was substantial evidence supporting ICC’s conclusion that inclusion of Denver & Rio Grande would lessen competition contrary to public interest, thus affirming its authority under federal law to approve or disapprove railroad mergers based on their impact on public convenience and necessity.

In the dissenting opinion for Denver & Rio Grande Western Railroad Co. et al. v. United States et al., Justice Douglas argued that the Interstate Commerce Commission (ICC) did not have authority to approve a merger between two railroads without considering its impact on other competing railroads and their employees, as well as public interest in maintaining competition among carriers. He contended that ICC's approval of the merger was arbitrary and capricious because it failed to consider these factors adequately before making its decision. Furthermore, he believed that this case represented an example of administrative agencies overstepping their bounds by interpreting statutes in ways Congress had not intended or foreseen.