In the 1902 case of Interstate Commerce Commission v. Louisville and Nashville Railroad Company, the U.S. Supreme Court ruled in favor of the railroad company, asserting that the Interstate Commerce Commission (ICC) did not have authority to set specific rates for railroads. The ICC had previously ordered a reduction in what it deemed were excessive rates charged by the Louisville and Nashville Railroad Company for transporting goods between two points within Kentucky but across Tennessee lines. However, this decision was challenged on grounds that it exceeded ICC's powers as granted by Congress under federal law at that time. The court held that while ICC could investigate complaints about unreasonable charges and order cessation if found unjust or unfair, they lacked explicit statutory power to establish particular rates themselves.

In the dissenting opinion for Interstate Commerce Commission v. Louisville and Nashville Railroad Company, Justice Harlan argued that the majority's decision undermined the power of Congress to regulate interstate commerce. He contended that by allowing railroads to set their own rates without oversight from a regulatory body like the Interstate Commerce Commission (ICC), it would lead to potential abuses and discrimination against smaller shippers or less populated areas. Harlan believed that this interpretation was contrary to what Congress intended when they established ICC, which was meant as an instrument of public control over powerful transportation monopolies. In his view, if railroads could ignore orders from ICC regarding rate adjustments then there is no effective regulation at all; thus defeating its purpose entirely.