In the case of Louisville & Nashville Railroad Company v. United States in 1914, the Supreme Court ruled on a dispute involving railroad freight rates. The Interstate Commerce Commission (ICC) had ordered reduced rates for certain commodities transported between Southern and Central states, which was challenged by several railroads including Louisville & Nashville Railroad Company. They argued that ICC's order violated their Fifth Amendment rights as it did not allow them to earn a reasonable return on their investments. However, the Supreme Court upheld ICC's decision stating that it was within its power to regulate interstate commerce and ensure just and reasonable rates for consumers while also considering whether or not such regulations allowed railroads to make fair profits. This ruling reinforced federal regulatory authority over private industries engaged in interstate commerce.

In the dissenting opinion for Louisville & Nashville Railroad Company v. United States, Justice Holmes disagreed with the majority's decision that a railroad company could not charge more for shorter distances than longer ones under the Interstate Commerce Act. He argued that there was no explicit prohibition in the law against such pricing and it should be left to market forces to determine rates. Furthermore, he contended that if Congress had intended to regulate this aspect of commerce so closely, they would have clearly stated so in legislation. The absence of such language suggested an intention not to interfere with these business decisions made by private companies operating within their legal rights and responsibilities.