In the case of Pennsylvania Railroad Company v. Wabash, St. Louis and Pacific Railway Company in 1894, the U.S Supreme Court ruled on a dispute between two railway companies over freight rates. The Pennsylvania Railroad Company had accused the Wabash, St. Louis and Pacific Railway Company of violating an agreement by charging lower rates for long-haul transportation than for short-haul transportation over the same route in violation of federal law (the Interstate Commerce Act). However, it was determined that this practice did not violate any laws as there were no specific provisions prohibiting such actions within existing legislation at that time. Therefore, despite being seen as unfair competition by some parties involved, it was deemed legal under current regulations.

The dissenting opinion in the case of Pennsylvania Railroad Company v. Wabash, St. Louis and Pacific Railway Company argued that the majority's decision was a significant departure from established principles of law regarding interstate commerce regulation. The dissenters believed that states should retain their power to regulate rates for rail transportation within their borders, even if such transportation is part of an interstate journey. They contended that allowing federal control over intrastate segments would lead to excessive centralization and undermine state sovereignty. Furthermore, they expressed concern about practical implications: If every rate change required federal approval, it could create administrative chaos and hinder efficient operation of railways. Thus, while acknowledging Congress' authority over interstate commerce as a whole, they maintained this did not extend to individual components within each state's jurisdiction.