In the 1918 case of Postal Telegraph-Cable Company v. Tonopah & Tidewater Railroad Company, the U.S Supreme Court ruled in favor of the defendant, Tonopah & Tidewater Railroad Company. The dispute arose when Postal Telegraph-Cable Co., a telegraph company operating under federal license, sought to install its lines along and across the railroad's right-of-way without obtaining consent from or compensating the railroad company. The court held that while federal law permitted telegraph companies to construct their lines over public lands and along post roads, it did not grant them an absolute right to use private property (such as railroads) without permission or compensation. Therefore, despite having a federal license for operation, Postal Telegraph was still required to respect private property rights.

In the dissenting opinion for Postal Telegraph-Cable Company v. Tonopah & Tidewater Railroad Company, Justice Louis Brandeis argued that the majority's decision was inconsistent with previous court rulings and violated principles of federalism. He contended that states should have authority over local matters such as intrastate telegraph services, unless Congress explicitly preempts state law. According to him, there was no clear evidence in this case that Congress intended to preempt Nevada’s laws regulating rates charged by telegraph companies operating within its borders. Therefore, he believed it was inappropriate for the Court to interfere with a state's ability to regulate businesses within its jurisdiction based on an assumption about Congressional intent not clearly expressed in legislation.