The U.S. Supreme Court case Knott et al., Railroad and Warehouse Commissioners of the State of Missouri, 1912 revolved around a dispute between the state's railroad and warehouse commissioners and several railroads over freight rates. The commission had ordered reduced rates that were challenged by the railroads as being confiscatory, violating their rights under the Fourteenth Amendment to earn a reasonable return on their property. The court ruled in favor of the railroads, finding that while states have power to regulate commerce within their borders including setting maximum charges for transportation services provided by public utilities like railways, such regulation must not be so restrictive as to deny just compensation for use of property or destroy its value. Therefore, if rate reductions result in earnings below a fair return on investment value - which was found to be true in this case - they are unconstitutional.

In the dissenting opinion for Knott et al., Railroad and Warehouse Commissioners of the State of Missouri, it was argued that the majority's decision to uphold a state law requiring railroads to provide separate but equal accommodations for black and white passengers violated both federal commerce laws and individual rights. The dissenters believed that such segregation inherently created inequality by stigmatizing one racial group as inferior. They also contended that this ruling interfered with interstate commerce because it imposed additional burdens on railroad companies operating across state lines, which could potentially disrupt trade between states. Furthermore, they asserted that this case raised serious constitutional issues about personal liberty and equality before the law, arguing against any legislation promoting racial discrimination or infringing upon citizens' freedom to travel freely within their own country.