In the case of Gila Valley, Globe & Northern Railway Company v. Hall in 1913, the U.S. Supreme Court ruled on a dispute involving land rights and railway construction. The plaintiff, Hall, owned property that was bisected by the defendant's railroad tracks which were built without his permission or any legal right to do so. He sued for damages and to have the tracks removed from his property but lost in lower courts due to an Arizona law allowing railroads to be constructed across private lands without consent if compensation is paid. The Supreme Court reversed these decisions stating that this state law violated both federal laws governing railways and also contradicted with constitutional protections against seizure of private property without just compensation (Fifth Amendment). It held that while states could regulate local aspects of railroads within their borders they couldn't authorize trespassing onto privately-owned lands for constructing rail lines unless it was done under federally-approved processes ensuring fair compensation.

In the dissenting opinion for Gila Valley, Globe & Northern Railway Company v. Hall, Justice Holmes disagreed with the majority's decision to uphold a state law that allowed an injured employee to sue their employer in court rather than going through arbitration as stipulated in their employment contract. He argued that this violated the Due Process Clause of the Fourteenth Amendment because it interfered with freedom of contract and deprived employers of property without due process. Furthermore, he contended that if such laws were upheld then any contractual agreement could be invalidated by legislation which would lead to chaos and uncertainty in business relations. He also pointed out inconsistencies between this ruling and previous decisions where similar laws had been struck down as unconstitutional.