In the case of New York, New Haven & Hartford Railroad Company v. United States in 1919, the Supreme Court ruled on a dispute involving railroad companies and their rights to control water transportation lines. The railroads had purchased or established steamship lines that operated between points served by their rails and other locations. The Interstate Commerce Commission (ICC) argued this was illegal under federal law which prohibited railroads from owning competing forms of transport like water carriers without ICC approval. However, the railroad companies contended they were not subject to these laws as they did not engage in direct competition with themselves but provided additional services for customers' convenience. The Supreme Court sided with the ICC stating that even if there was no actual harm done through competition, potential harm could exist due to unfair practices or preferential treatment towards owned shipping businesses over independent ones. Therefore, it upheld that such ownerships required prior approval from ICC under existing legislation.

In the dissenting opinion for New York, New Haven & Hartford Railroad Company v. United States (1919), Justice McReynolds argued that the Interstate Commerce Commission had overstepped its authority by ordering a reduction in rates without sufficient evidence to justify such action. He contended that the commission's decision was based on mere speculation and conjecture rather than concrete facts or data. Furthermore, he asserted that it is not within the purview of courts to determine what constitutes a reasonable rate; this responsibility lies with regulatory bodies like commissions who have expertise in these matters. However, they must base their decisions on substantial evidence and not arbitrary judgment. In his view, if allowed to stand unchallenged, this ruling could set a dangerous precedent where administrative agencies can make significant policy changes without adequate justification or oversight.