In the 1903 case of Interstate Commerce Commission v. Baird, the U.S Supreme Court ruled on a dispute involving railroad freight rates. The Interstate Commerce Commission (ICC) had ordered an increase in rates charged by railroads for transporting coal, but George W. Baird challenged this order as being unjust and unreasonable under the Interstate Commerce Act. He argued that it would result in discriminatory pricing against his business interests compared to other shippers who were not subject to such increases. The court sided with Baird, holding that ICC lacked authority to establish specific maximum or minimum rate levels; its power was limited only to determining whether existing rates were reasonable and non-discriminatory. This decision significantly curtailed ICC's regulatory powers over interstate commerce until Congress expanded them later through additional legislation.

In the dissenting opinion for Interstate Commerce Commission v. Baird, it was argued that the Supreme Court should not have jurisdiction over this case as it pertains to a matter of state law rather than federal law. The dissenting justices believed that the issue at hand - whether or not a railroad company could charge different rates for in-state and out-of-state passengers - fell under the purview of individual states' rights to regulate commerce within their borders. They contended that by ruling on this case, the Supreme Court was infringing upon these rights and setting a dangerous precedent for future cases involving interstate commerce. Furthermore, they disagreed with majority's interpretation of what constitutes "unjust discrimination" under Section 3 of Interstate Commerce Act, arguing instead that differential pricing based on geographical considerations does not necessarily constitute unjust discrimination if such pricing is reasonable and justifiable.