The U.S. Supreme Court case Looney, Attorney General, et al. v. Eastern Texas Railroad Company et al., 1917 revolved around a dispute over the constitutionality of a state law in Texas that regulated railroad freight rates within the state's borders. The Eastern Texas Railroad Company and other railroads challenged this law on grounds that it violated their rights under both the Due Process Clause and Equal Protection Clause of the Fourteenth Amendment to the Constitution by setting unreasonable and discriminatory rates for intrastate commerce which were lower than those set for interstate commerce by federal regulation. However, after reviewing evidence presented about these rate structures, including testimony from experts on railway operations and economics as well as data comparing revenues from different types of traffic (passenger vs freight), distances traveled etc., Justice Day delivered an opinion for a unanimous court upholding this legislation as constitutional because it did not appear to be arbitrary or unjustly discriminatory nor did it deprive them of fair return on their property.

In the dissenting opinion for Looney, Attorney General, et al. v. Eastern Texas Railroad Company et al., Justice Holmes disagreed with the majority's decision to strike down a Texas law that regulated railroad freight rates within the state. He argued that states should have broad powers to regulate their own economies and protect their citizens from economic harm. He also contended that courts should defer to legislative judgments about economic policy unless they clearly violate constitutional rights or principles. In his view, it was not clear in this case whether the challenged law violated any such rights or principles because its impact on interstate commerce was indirect and incidental rather than direct and substantial as required by existing precedents.