In the case of New York Central & Hudson River Railroad Company v. Gray, 1915, the U.S. Supreme Court ruled in favor of Gray and upheld a decision by the Interstate Commerce Commission (ICC). The ICC had previously ordered that railroads could not charge more for short hauls than long ones over the same line unless they received approval from ICC to do so. This was based on an interpretation of Section 4 of the Hepburn Act which sought to prevent price discrimination by railroads against small shippers or those located at less competitive points along their routes. The railroad company argued this violated its Fifth Amendment rights as it constituted taking property without due process and equal protection under law because it interfered with contractual freedom and ignored differences in competition between different locations. However, Justice Oliver Wendell Holmes Jr., writing for a unanimous court, rejected these arguments stating that public interest can override private interests when regulating business operations.

In the dissenting opinion for New York Central & Hudson River Railroad Company v. Gray, Justice Holmes disagreed with the majority's ruling that a railroad company could be held liable for injuries sustained by an employee due to negligence of another employee. He argued that this interpretation was not in line with federal law at the time, which only imposed liability on employers when injury resulted from their own negligence or fault. Furthermore, he contended that even if such vicarious liability were permissible under federal law, it should not apply in cases where employees knowingly and voluntarily assumed risks associated with their work - as was arguably true in this case given its facts. Thus, according to Justice Holmes' dissenting view, the plaintiff should have been barred from recovering damages because his injury resulted from a risk inherent to his job and one he willingly undertook.