In the 1916 case of Gulf, Colorado & Santa Fe Railway Company v. Texas Packing Company et al., the Supreme Court ruled in favor of the railway company. The dispute arose when a shipment of peaches was delayed and arrived at its destination in spoiled condition. The Texas Packing Company sued for damages, arguing that the railroad had breached their contract by not delivering goods on time. However, it was found that there were no specific delivery times agreed upon in their contract and therefore no breach occurred according to common carrier laws which state railroads are only required to deliver within a reasonable timeframe unless otherwise specified. Furthermore, it was determined that even if there had been an agreement about timing, this would have been superseded by federal law under Interstate Commerce Act regulations which prohibit preferential treatment or scheduling for certain customers over others.

The dissenting opinion in the case of Gulf, Colorado & Santa Fe Railway Company v. Texas Packing Company et al., argued that the majority's decision was a departure from established principles governing interstate commerce and railroad transportation charges. The dissent contended that under existing law, it is not within the power of a state to regulate rates for services rendered by an interstate carrier solely within its borders when such services are part of continuous interstate transportation. It further asserted that if a rate for any part of such service is unreasonable or discriminatory, redress should be sought through federal authorities rather than state courts. Therefore, they disagreed with the majority's ruling which allowed Texas Packing Co to recover overcharges made by Gulf Railroad on intrastate portions of their shipments because it interfered with uniformity in regulation and operation essential to efficient functioning of national rail networks.