In the case of St. Louis & O'Fallon Railway Company et al. v. United States et al., 1928, the Supreme Court ruled on a dispute involving railroad companies and their obligations under federal law to maintain certain rates for shipping freight. The railway companies argued that they were not bound by these regulations because they had been chartered by individual states rather than the federal government, thus exempting them from such national laws. However, the court disagreed with this interpretation and upheld lower court rulings in favor of the U.S government's right to regulate interstate commerce regardless of how a company was incorporated or where it operated within country borders.

In the dissenting opinion for the case of St. Louis & O'Fallon Railway Company et al. v. United States et al., Justice Stone argued that the Interstate Commerce Commission (ICC) had overstepped its authority by ordering a reorganization of the railway company without sufficient evidence to justify such an action. He contended that while Congress had granted broad powers to ICC, it did not intend for these powers to be used arbitrarily or capriciously, and any orders issued by ICC should be based on substantial evidence and sound reasoning. In this case, he believed that there was insufficient proof of mismanagement or financial instability within the railway company which would warrant a forced reorganization under federal supervision. Therefore, he disagreed with majority's decision upholding ICC's order as lawful and reasonable.