In the case of Gunter, Attorney General of the State of South Carolina, v. Atlantic Coast Line Railroad Company in 1905, the U.S Supreme Court dealt with a dispute over railroad rates within South Carolina. The state's attorney general filed suit against Atlantic Coast Line Railroad Company for allegedly violating a state law that set maximum freight and passenger rates for railroads operating within its borders. The railroad company argued that this law was unconstitutional as it interfered with interstate commerce and violated their rights under the Fourteenth Amendment to due process and equal protection. However, the Supreme Court ruled in favor of South Carolina stating that states have authority to regulate businesses within their boundaries including setting reasonable rate regulations on railroads even if they are part of an interstate system unless Congress has legislated otherwise or such laws directly conflict with federal laws governing interstate commerce.

In the dissenting opinion for Gunter v. Atlantic Coast Line Railroad Company, it was argued that the majority's decision to uphold a South Carolina law requiring railroads to provide separate but equal accommodations for black and white passengers violated principles of federalism. The dissent contended that this state law interfered with interstate commerce, which is under the jurisdiction of Congress according to the Constitution. It also pointed out inconsistencies in how similar laws were treated by different courts across states, suggesting a lack of uniformity in interpreting what constitutes an undue burden on interstate commerce. Furthermore, it expressed concern over potential conflicts between state and federal authorities if each could regulate railroad operations within their respective jurisdictions independently from one another.