In the Northern Pacific Railway Company v. Houston case of 1913, the U.S Supreme Court ruled in favor of Northern Pacific Railway Company. The dispute arose when Houston claimed that he was entitled to a lower rate for shipping goods because another customer had received preferential treatment and lower rates from the railway company. He argued this violated the Interstate Commerce Act which prohibits discriminatory pricing by transportation companies engaged in interstate commerce. However, it was found that there were significant differences between his situation and that of other customers who received discounted rates due to long-term contracts or high-volume shipments. Therefore, these discounts did not constitute discrimination under law as they were based on different circumstances rather than arbitrary preference by the railway company. Thus, no violation of Interstate Commerce Act occurred according to court's decision.

The dissenting opinion in the Northern Pacific Railway Company v. Houston case argued that the majority's decision to void a contract between the railway company and Houston was incorrect. The dissenters believed that there was no legal basis for invalidating this contract, as it did not violate any federal laws or regulations at its inception. They also pointed out that both parties had willingly entered into this agreement with full knowledge of its terms and conditions, which included an increase in freight rates over time. Therefore, they contended that it would be unjust to nullify such a mutually agreed upon arrangement solely based on subsequent changes in circumstances or regulatory policies. Furthermore, they expressed concern about setting a dangerous precedent where courts could arbitrarily interfere with private contracts whenever deemed expedient or necessary.