In the case of State of Missouri v. Chicago, Burlington & Quincy Railroad Company in 1915, the Supreme Court ruled on a dispute between the state and a railroad company concerning rates for intrastate commerce. The State of Missouri had established maximum freight rates that railroads could charge within its borders. However, these were challenged by several railroad companies including Chicago, Burlington & Quincy Railroad Company who argued that they were unreasonably low and violated their rights under the Fourteenth Amendment to earn a fair return on their property used in providing transportation services. The Supreme Court held that while states have authority to regulate intrastate commerce including setting reasonable rate regulations for railroads operating within their jurisdiction, such regulations must not be confiscatory or result in denial of due process under the Fourteenth Amendment. Therefore it ordered lower courts to examine whether Missouri's rate regulation was indeed unreasonable or confiscatory as claimed by the railroads.

In the dissenting opinion for the case of State of Missouri v. Chicago, Burlington & Quincy Railroad Company, it was argued that the state had a right to regulate railroad rates within its borders and that this power should not be undermined by federal authority unless there is clear evidence of unreasonable or discriminatory practices. The dissenters believed that states have an inherent sovereign power over commerce within their boundaries and thus can set reasonable rates for railroads operating in their territory. They contended that while Congress has regulatory powers under the Commerce Clause, these do not nullify or diminish state powers unless they are exercised in such a way as to conflict with federal law or policy. Therefore, according to them, if a state's regulation does not interfere with interstate commerce nor contradict any act of Congress then it should stand valid and enforceable.