In the case of MacLeod et al., constituting the Public Service Commission of Massachusetts, v. New England Telephone & Telegraph Company (1918), the Supreme Court ruled in favor of New England Telephone & Telegraph Company. The court held that a state could not regulate interstate commerce rates for telephone services because it was under federal jurisdiction according to the Commerce Clause in Article I, Section 8, Clause 3 of the U.S Constitution. This decision came after Massachusetts' Public Service Commission attempted to set rates for both intrastate and interstate calls made by customers within their state boundaries. The ruling reinforced that only Congress has power over interstate commerce regulation.

In the dissenting opinion for MacLeod et al., Constituting The Public Service Commission of Massachusetts, v. New England Telephone & Telegraph Company, Justice Holmes disagreed with the majority's decision to overturn a state law that regulated telephone rates. He argued that states should have the power to regulate businesses within their borders and set reasonable rates for services provided by public utilities like telephone companies. He believed this was especially important in cases where these companies operated as monopolies without competition to naturally control prices. Furthermore, he contended that courts should not interfere with such regulations unless they were clearly unreasonable or arbitrary. In his view, it was not enough for a company simply to show it could make more money under different circumstances; instead, it had to prove an actual confiscation of property due its inability to operate profitably under existing regulations.