In the 1920 case of Missouri, Kansas & Texas Railway Company v. United States, the Supreme Court ruled on a dispute regarding railroad rates for interstate commerce. The Interstate Commerce Commission (ICC) had ordered reduced rates for certain freight services provided by several railway companies including the Missouri, Kansas & Texas Railway Company. The railroads argued that these rate reductions were confiscatory and violated their rights under the Fifth Amendment to just compensation for private property taken for public use. However, in its decision, the Supreme Court upheld ICC's authority to set reasonable and non-confiscatory rates without judicial intervention unless there is clear illegality or constitutional violation involved. It concluded that while courts could intervene if a rate was so low as to be confiscatory and thus unconstitutional, they should not otherwise second-guess what constitutes a fair return on investment for regulated industries.

In the dissenting opinion for the case of Missouri, Kansas & Texas Railway Company v. United States (1920), it was argued that the Interstate Commerce Commission did not have authority to regulate intrastate rates even if they indirectly affected interstate commerce. The dissenting justices believed this interpretation overstepped constitutional boundaries and infringed upon states' rights to control their own economic affairs. They contended that only Congress had explicit power under the Constitution to regulate interstate commerce, while individual states retained inherent power over intrastate matters unless explicitly prohibited by federal law or constitutionally delegated powers. Therefore, any attempt by a federal agency like ICC to extend its regulatory reach into purely state matters would be unconstitutional without clear congressional authorization or constitutional amendment granting such powers.