In the case of Louisville and Nashville Railroad Company v. Smith, Huggins & Company in 1906, the U.S Supreme Court ruled on a dispute involving transportation charges for goods shipped across state lines. The plaintiff, Smith, Huggins & Co., had sued to recover overcharges from the defendant railroad company based on rates established by an Alabama statute. However, these rates were lower than those set by federal law under the Interstate Commerce Act (ICA). The court held that when there is a conflict between state and federal regulations regarding interstate commerce - as was present in this case - federal law prevails according to the Supremacy Clause of the Constitution. Therefore, it found that while states have authority to regulate intrastate commerce within their borders; they cannot interfere with or control interstate commerce which falls under exclusive jurisdiction of Congress through ICA. Thus ruling favored Louisville and Nashville Railroad Company stating it was not liable for alleged overcharges since it followed federally mandated prices rather than lower ones imposed by Alabama's legislation.

In the dissenting opinion for Louisville and Nashville Railroad Company v. Smith, Huggins & Company, Justice Harlan argued that the majority's decision was inconsistent with previous rulings of the Court regarding interstate commerce. He contended that a state has no power to regulate rates for transportation of goods from one state to another or within its own borders if such regulation directly burdens interstate commerce. The justice believed that this case involved an attempt by Alabama to control rates on freight transported entirely within its boundaries but which originated outside of it - something he saw as a direct burden on interstate trade. Furthermore, he disagreed with the majority's view about 'indirect' effects on interstate commerce being permissible areas for state legislation; instead asserting any law having more than an incidental effect should be deemed unconstitutional under Commerce Clause jurisprudence.