In the 1917 case of Louisville & Nashville Railroad Company v. United States, the U.S Supreme Court ruled that a railroad company could not charge more for a short haul than for a long one over the same line in the same direction unless authorized by state law or federal regulation. The court held that this practice violated Section 4 of the Interstate Commerce Act which prohibited unjust discrimination between shippers and places. This decision was significant as it upheld regulations aimed at preventing railroads from exploiting their monopoly power to discriminate against certain customers or locations.

In the dissenting opinion for the case of Louisville & Nashville Railroad Company v. United States et al., Justice McReynolds expressed concern over the majority's decision to uphold a federal law that allowed railroad companies to set their own rates, subject only to review by an administrative agency. He argued that this was essentially giving legislative power to private entities and non-judicial public bodies, which he saw as unconstitutional. Furthermore, he contended that it violated due process rights because it did not provide adequate judicial review or protection against arbitrary rate changes. The justice also feared potential abuse of power without proper checks and balances in place, leading potentially towards monopolistic practices at the expense of consumers' interests.