The U.S. Supreme Court case Missouri Pacific Railway Company v. McGrew Coal Company in 1916 revolved around a dispute over freight rates for the transportation of coal. The McGrew Coal Company sued the Missouri Pacific Railway, alleging that it had charged unreasonable and discriminatory rates for transporting its coal from Kansas to Nebraska, which violated the Interstate Commerce Act. The railway company argued that because these states were part of its charter territory - an area where it was authorized to operate by government charter - it could set whatever prices it deemed appropriate without violating federal law. However, the Supreme Court disagreed with this argument and ruled in favor of the McGrew Coal Company. It held that even though a railroad might have special privileges within its charter territory under state law, such rights did not exempt them from compliance with federal laws regulating interstate commerce like reasonable pricing and non-discrimination requirements.

The dissenting opinion in the case of Missouri Pacific Railway Company v. McGrew Coal Company argued that the majority's decision to uphold a lower court ruling, which found the railway company liable for damages due to its failure to provide sufficient cars for coal transportation, was incorrect. The dissent contended that there was no breach of duty on part of the railway company as it had made reasonable efforts under difficult circumstances (a nationwide car shortage) to fulfill its obligations. It also pointed out that there were no specific contractual terms regarding car supply and thus, any liability should be based on negligence rather than contract law. Furthermore, it emphasized that public utilities cannot guarantee absolute performance and are only expected to do their best within their means; hence they should not be held accountable for uncontrollable factors such as an unexpected surge in demand or shortages beyond their control.