In the case of Portland Railway, Light and Power Company v. Railroad Commission of Oregon (1912), the U.S. Supreme Court was asked to determine whether a state could regulate rates for an interstate commerce company that also operated within its borders. The Portland Railway, Light and Power Company argued that it should not be subject to rate regulation by the Railroad Commission of Oregon because it engaged in both intrastate and interstate commerce. However, the court ruled against them stating that while states cannot interfere with interstate commerce directly, they can regulate aspects related to local or intrastate operations even if those operations are part of a larger entity involved in interstate trade. Therefore, despite being involved in both intra- and inter-state business activities, companies like Portland Railway were still subject to state regulations regarding their local affairs.

In the dissenting opinion for Portland Railway, Light and Power Company v. Railroad Commission of Oregon, it was argued that the state's regulation of intrastate rates did not infringe upon interstate commerce rights. The justice disagreed with the majority's view that federal law preempted state authority in this matter. He contended that states should retain their power to regulate local matters unless there is a clear conflict with federal law or policy. In his view, no such conflict existed in this case because Congress had not enacted legislation specifically addressing rate-setting for street railways operating within city limits. Therefore, he believed that the decision to strike down Oregon’s regulatory scheme as unconstitutional represented an unwarranted expansion of federal power at the expense of traditional state prerogatives.