In the case of Smith v. Interstate Commerce Commission (1917), the U.S Supreme Court was tasked with determining whether a railroad company could be compelled to provide free transportation for livestock owners and their employees who were accompanying their animals during transit. The petitioner, Mr. Smith, argued that this practice constituted an unjust discrimination under the Hepburn Act of 1906 which prohibited railroads from offering free passes or any special privileges in respect to transportation services. However, the court ruled against him stating that such practices did not constitute undue or unreasonable preference or advantage within meaning of act regulating commerce by railroads as it was necessary for ensuring proper care and safety of transported livestock thus serving a legitimate business purpose.

In the dissenting opinion for Smith v. Interstate Commerce Commission, Justice McReynolds disagreed with the majority's decision to uphold a federal law that allowed railroads to give free transportation passes to their employees but not others. He argued that this was an unjustifiable interference in private business affairs by Congress and violated principles of equal protection under the Fourteenth Amendment. According to him, there was no reasonable basis for distinguishing between railroad employees and other individuals when it came to receiving these benefits. Furthermore, he contended that such legislation exceeded Congress' power under the commerce clause as it did not directly regulate interstate commerce but rather intruded into matters of local concern and personal liberty.