In the case of Peoples Natural Gas Company v. Public Service Commission of Pennsylvania et al., the U.S Supreme Court was asked to determine whether a state public service commission had the authority to regulate rates charged by a natural gas company for interstate commerce. The Peoples Natural Gas Company, which operated in both Ohio and Pennsylvania, argued that its operations were part of interstate commerce and therefore outside the jurisdiction of Pennsylvania's Public Service Commission. However, the court ruled against this argument stating that while it is true that states cannot directly regulate or interfere with interstate commerce, they can indirectly affect it through regulations on local aspects related to safety, welfare or convenience within their borders as long as these do not conflict with federal laws governing such commerce. Therefore, since there was no conflicting federal law at play here regarding rate regulation for natural gas companies operating across state lines; henceforth allowing Pennsylvania's Public Service Commission could indeed set rates for services provided within its territory even if those services are part of an operation also extending into another state.

In the dissenting opinion for Peoples Natural Gas Company v. Public Service Commission of Pennsylvania, Justice McReynolds disagreed with the majority's decision to uphold a state law that allowed public utility companies to be regulated by a commission. He argued that this was an overreach of government power and violated property rights protected under the Fourteenth Amendment. According to him, it is not within the purview of states or commissions to determine rates for private businesses; rather, these should be dictated by market forces alone. Furthermore, he contended that such regulation could lead to arbitrary and discriminatory practices against certain businesses without any real justification or benefit for consumers. This would ultimately undermine economic freedom and individual liberty in favor of excessive governmental control.