The Producers Transportation Company v. Railroad Commission of the State of California case in 1919 revolved around a dispute between an oil transportation company and the state's railroad commission over rate regulation. The Producers Transportation Company argued that the rates set by the commission were unjust, unreasonable, and discriminatory. They also claimed that their due process rights under the Fourteenth Amendment had been violated as they were not given a fair hearing before these rates were established. However, after reviewing evidence presented by both parties, including expert testimony on cost analysis for transporting oil products via pipelines versus railroads, it was determined that there was no violation of constitutional rights or any form of discrimination against pipeline companies compared to railroads in terms of rate setting. The Supreme Court upheld lower court rulings favoring California’s Railroad Commission stating its authority to regulate public utilities within its jurisdiction is constitutionally sound.

In the dissenting opinion for Producers Transportation Company v. Railroad Commission of the State of California, it was argued that the majority's decision to uphold state regulation over interstate commerce contradicted previous court rulings and threatened federal authority. The dissenting justices believed that by allowing a state commission to regulate rates on oil shipments originating within its borders but destined for other states, they were infringing upon Congress' exclusive power to regulate interstate commerce as stated in the Constitution. They feared this ruling could lead to chaotic conditions if each state started imposing their own regulations on interstate trade. Furthermore, they disagreed with the majority's interpretation of 'direct effect' on commerce; while acknowledging some local activities can affect interstate trade indirectly and thus fall under state jurisdiction, they contended that setting shipping rates had a direct impact on such trade and should be federally regulated instead.