In the case of Northern Pacific Railway Company v. State of Minnesota ex rel. The City of Duluth, 1907, the U.S Supreme Court was tasked with determining whether a state law requiring railroads to provide equal and reasonable services violated the Commerce Clause or Fourteenth Amendment. The Northern Pacific Railway Company argued that it had been unfairly targeted by an order from Minnesota's Railroad and Warehouse Commission which demanded they construct a depot in Duluth for passenger service. They claimed this requirement infringed upon their rights under both clauses as it interfered with interstate commerce and deprived them of property without due process. The court ruled against the railway company, stating that states have authority to regulate local aspects of railroad operations within their borders provided such regulations do not interfere directly with interstate commerce or violate any federal laws or constitutional provisions. It held that building a depot did not constitute an unreasonable burden on interstate commerce nor did it deprive the railway company of its property without due process.

In the dissenting opinion for Northern Pacific Railway Company v. State of Minnesota, Justice Holmes argued that the majority's decision was inconsistent with previous rulings and principles of law. He contended that the railway company had voluntarily entered into a contract with Duluth when it accepted its charter from Congress, which included an obligation to maintain equal rates between different locations on its line. The state court's order requiring this did not constitute a taking without compensation or due process violation as claimed by the railway company; rather, it was simply enforcing terms agreed upon in advance. Furthermore, he disagreed with the majority’s view that federal courts could override state decisions regarding local matters such as railroad rate regulation unless there is clear conflict with federal laws or constitutionally protected rights.