The U.S. Supreme Court case Interstate Commerce Commission v. Southern Pacific Company in 1913 revolved around the issue of whether the Interstate Commerce Commission (ICC) had authority to regulate intrastate rates on railroads that were part of an interstate route, even if those specific segments did not cross state lines. The Southern Pacific Company argued that ICC's regulation over their intrastate railroad segment was unconstitutional as it didn't involve interstate commerce directly. However, the court ruled in favor of ICC stating that while Congress cannot regulate purely internal affairs of a State, it has power to foster and protect interstate commerce and can take all necessary means to make such commerce effective. Therefore, if local carriage is so intermingled with interstate traffic that discriminatory practices would adversely affect or burden the latter, then Congress can control such situations for protecting public interest.

The dissenting opinion in the case of Interstate Commerce Commission v. Southern Pacific Company argued that the majority's decision to uphold federal regulation over intrastate railroad rates was an unwarranted expansion of federal power. The dissenters believed that this ruling undermined state sovereignty and violated principles of federalism by allowing a national agency, namely the Interstate Commerce Commission (ICC), to regulate commerce within individual states. They contended that such authority should be reserved for state governments under their police powers as provided by the Constitution. Furthermore, they expressed concern about potential abuses and inefficiencies resulting from centralized control over local matters, arguing it could lead to arbitrary or unfair decisions due to lack of familiarity with specific regional conditions and needs.