In the case of Northern Pacific Railway Company v. State of North Dakota on Relation of McCue, Attorney General in 1914, the U.S Supreme Court ruled that a state law requiring railroads to provide free transportation for certain state officials was unconstitutional. The court held that such laws violated the Fourteenth Amendment's Due Process Clause because they constituted an unlawful taking of property without just compensation. This decision reaffirmed previous rulings which established that states cannot force private companies to provide services or goods without fair payment under their police power authority. It also clarified that while states have broad powers to regulate businesses within their borders for public welfare purposes, these powers are not unlimited and must respect constitutional protections against uncompensated takings.

The dissenting opinion in the case of Northern Pacific Railway Company v. State of North Dakota, argued that the state had a right to regulate railroad rates within its borders and that this did not interfere with interstate commerce. The justice disagreed with the majority's interpretation of what constituted an undue burden on interstate commerce, arguing that it was too broad and would invalidate many legitimate exercises of state power. They believed that states should have more leeway to protect their citizens from potentially exploitative practices by large corporations like railroads. Furthermore, they contended that if a rate is reasonable for intrastate traffic, it cannot be deemed unreasonable for interstate traffic simply because it might affect profits or competition among carriers.