In the case of People's Railroad v. Memphis Railroad, the Supreme Court was asked to decide whether a state-chartered railroad company had the right to take over a private railroad company. The People's Railroad Company had been chartered by the state of Tennessee in 1867, and it sought to take over the Memphis Railroad Company, which had been chartered by the state in 1853. The Memphis Railroad Company argued that the state had no right to take over its property, and that the People's Railroad Company had no legal authority to do so. The Supreme Court ruled in favor of the Memphis Railroad Company, finding that the state had no right to take over the property of a private company. The Court held that the state had no power to interfere with the rights of private property owners, and that the People's Railroad Company had no legal authority to take over the Memphis Railroad Company. The Court also held that the state had no power to grant a monopoly to a private company, and that the People's Railroad Company had no right to take over the Memphis Railroad Company without the consent of the latter.

In the case of People's Railroad v. Memphis Railroad, the dissenting opinion argued that a state legislature does not have the power to grant exclusive rights for railroad companies to operate in certain areas. The dissent argued that such an act would be unconstitutional as it would amount to taking private property without just compensation and thus violate due process under the Fifth Amendment. Furthermore, they contended that if states were allowed this kind of authority then Congress could delegate its powers over interstate commerce and transportation which is prohibited by Article I Section 8 Clause 3 of the Constitution. In conclusion, they asserted that granting exclusive rights was beyond what legislatures are empowered to do and therefore should be struck down as unconstitutional.