In the 1935 case of Pennsylvania Railroad Co. et al. v. Public Utilities Commission of Ohio et al., the U.S Supreme Court ruled in favor of the Pennsylvania Railroad Company, overturning a decision by the Public Utilities Commission of Ohio (PUCO). The PUCO had ordered that grade crossings be eliminated at certain locations and replaced with overpasses or underpasses, with costs to be shared between railroad companies and local governments. The railroads argued this order was unconstitutional as it violated their rights under both due process and equal protection clauses because they were being asked to bear an unfair share of cost for public improvements from which they derived no special benefit compared to other businesses or property owners in those areas. The court agreed, stating that while states have broad powers to regulate railroads for safety purposes, these powers do not extend so far as allowing them to impose undue financial burdens on specific entities without just cause.

In the dissenting opinion for Pennsylvania Railroad Co. et al. v. Public Utilities Commission of Ohio et al., it was argued that the majority's decision to uphold a state law requiring railroads to stop at all grade crossings violated the Commerce Clause of the U.S Constitution, which gives Congress exclusive power over interstate commerce. The dissenters believed that this state regulation placed an undue burden on interstate commerce by significantly slowing down trains and increasing operating costs without providing substantial safety benefits in return. They pointed out that there were other less intrusive ways to promote safety at grade crossings, such as installing warning signals or constructing overpasses or underpasses, which would not interfere with interstate commerce to nearly the same extent.