In the case of Southern Pacific Company and Oregon & California Railroad Company v. Campbell et al., constituting the Railroad Commission of Oregon, 1912, the Supreme Court ruled in favor of Southern Pacific and against the state commission. The dispute arose when a rate set by Oregon's railroad commission was challenged as being too low to allow for reasonable profit. The court found that while states have authority to regulate commerce within their borders, this power is not absolute if it infringes upon interstate commerce or violates constitutional protections on property rights without due process. In this instance, they determined that setting rates so low as to prevent reasonable earnings constituted an unlawful taking of property without just compensation under the Fifth Amendment. Therefore, they held that such regulations were unconstitutional unless they allowed for fair return on investment.

In the dissenting opinion for Southern Pacific Company and Oregon & California Railroad Company v. Campbell et al., it was argued that the state of Oregon had a right to regulate railroad rates within its borders, even if those railroads were part of an interstate system. The dissenting justices believed that the majority's decision undermined states' rights and gave too much power to federal regulatory bodies. They contended that as long as a state's regulations did not interfere with interstate commerce or violate any other constitutional provisions, they should be allowed to stand. This view emphasized respect for local autonomy and control over industries directly impacting their communities.