The Southern Railway Co. v. Seaboard Allied Milling Corp et al., 1978, is a U.S Supreme Court case that revolved around the interpretation of the Interstate Commerce Act and its application to rail carriers' liability for damages incurred during transit. The dispute arose when Southern Railway Company was held liable by lower courts for damage to a shipment of corn transported from Illinois to North Carolina despite not being directly responsible for the damage as it occurred while in another carrier's custody (Louisville & Nashville Railroad). In this context, the Supreme Court had to decide whether Section 20(11) of the Interstate Commerce Act imposed absolute liability on initial carriers like Southern Railway or if they could limit their responsibility through "interline" agreements with other involved carriers. The court ruled in favor of Southern Railway Co., stating that under Section 20(11), an initial carrier can contractually limit its liability once goods are handed over to subsequent connecting lines unless such limitation would be unjust or unreasonable.

In the dissenting opinion for Southern Railway Co. v. Seaboard Allied Milling Corp., Justice Rehnquist disagreed with the majority's interpretation of the Interstate Commerce Act, arguing that it was not intended to provide a private cause of action for damages caused by unreasonable practices. He contended that Congress had established an administrative remedy through the Interstate Commerce Commission (ICC) and did not intend to also create a judicial one. The ICC should be responsible for determining whether a practice is reasonable or not before any legal proceedings take place, he argued, as this would prevent courts from making such determinations without expertise in interstate commerce matters. Furthermore, he expressed concern about potential negative impacts on railroads due to increased litigation costs and uncertainty over what constitutes an "unreasonable" practice.