The U.S. Supreme Court case Michigan Central Railroad Company v. Michigan Railroad Commission in 1914 revolved around the issue of whether a state could regulate railroad freight rates within its borders, even if those railroads were part of an interstate system. The Michigan Central Railroad Company challenged the authority of the state's railroad commission to set maximum rates for intrastate shipments, arguing that this power was reserved exclusively for Congress under the Interstate Commerce Act and thus violated their due process rights under Fourteenth Amendment. However, the Supreme Court upheld lower court decisions favoring the state commission by ruling that states had retained their traditional police powers to regulate local aspects of commerce unless explicitly preempted by federal law or policy. Therefore, as long as these regulations did not interfere with interstate commerce or contradict federal regulation on such matters, they were deemed constitutional.

In the dissenting opinion for Michigan Central Railroad Company v. Michigan Railroad Commission, Justice Holmes disagreed with the majority's decision to strike down a state law that required railroads to stop at all county seats. He argued that it was not within the purview of courts to decide on matters of economic policy or business convenience, and such decisions should be left up to legislatures who are better equipped and authorized by voters to make them. Furthermore, he contended that if a railroad company found compliance with such laws burdensome or unprofitable, they could choose not operate in those areas rather than seeking judicial intervention against democratically enacted regulations. The justice also expressed concern about setting a precedent where courts would become arbiters of economic affairs instead of focusing on legal issues.