In the 1896 case of St. Joseph and Grand Island Railroad Company v. Steele, the U.S Supreme Court ruled in favor of the railroad company. The dispute arose when Steele sued for damages after his cattle were killed by a train on an unfenced section of track running through his property in Nebraska. However, under Nebraska law at that time, landowners had to fence their properties against railways rather than vice versa - this was known as "fencing out". The court held that it was not incumbent upon railway companies to erect fences along their tracks unless specifically required by state law or if they voluntarily agreed to do so; hence, no liability could be attached to them for failing to prevent livestock from straying onto unfenced sections of track where accidents might occur.

In the dissenting opinion for the St. Joseph and Grand Island Railroad Company v. Steele case, it was argued that the majority's decision to uphold a Nebraska law regulating railroad rates was incorrect. The dissenting justices believed that this state law interfered with interstate commerce, which is under federal jurisdiction according to the Constitution. They contended that railroads are instruments of interstate commerce and therefore should not be subject to individual state regulations regarding their operations or pricing structures. This view held that allowing states such power could lead to inconsistencies in regulation across different states, potentially disrupting smooth operation of nationwide transportation networks like railroads. Furthermore, they expressed concern about potential violation of due process rights if businesses were subjected to arbitrary rate-setting by states without any recourse or appeal mechanism available at a higher level.