In the case of Louisville & Nashville Railroad Company et al. v. United States of America et al., 1916, the U.S Supreme Court ruled in favor of the government and upheld a decision by the Interstate Commerce Commission (ICC). The ICC had ordered several railroad companies to stop giving preferential treatment to certain shippers through rebates or reduced rates for large shipments, which was considered discriminatory against smaller shippers. The railroads argued that they were not violating any laws because their actions did not result in unjust discrimination between different localities but rather between individual shippers within those localities. However, this argument was rejected by the court as it held that such practices violated both federal law and regulations set forth by ICC prohibiting unfair pricing methods.

In the dissenting opinion for Louisville & Nashville Railroad Company v. United States, Justice McReynolds disagreed with the majority's decision to uphold the Interstate Commerce Commission's (ICC) order requiring railroads to provide free transportation for federal employees traveling on official business. He argued that this constituted an unlawful taking of property without just compensation, violating the Fifth Amendment rights of railroad companies. The justice contended that while Congress had broad powers over interstate commerce, it could not force private entities like railroads to bear public burdens without fair compensation. Furthermore, he expressed concern about potential abuse and misuse of such free passes by government officials or their friends and relatives under false pretenses of "official business." In essence, Justice McReynolds believed that if a service was essential enough for public use then it should be paid for by public funds rather than being imposed as an uncompensated obligation on private corporations.