In the case of St. Louis Southwestern Railway Company v. State of Arkansas, 1909, the U.S Supreme Court ruled in favor of the state's right to regulate railroad rates within its borders. The railway company had challenged an Arkansas law that set maximum freight and passenger rates for railroads operating in the state, arguing it violated their constitutional rights by depriving them of property without due process and denying them equal protection under laws. However, Justice David Brewer delivered a unanimous opinion upholding the constitutionality of such regulation as long as it was reasonable and did not result in confiscation or destruction of property rights without just compensation. This decision affirmed states' power to control commerce within their boundaries while also recognizing federal authority over interstate commerce.

In the dissenting opinion for St. Louis Southwestern Railway Company v. State of Arkansas, it was argued that the court majority had overstepped its jurisdiction by interfering with a state's right to regulate commerce within its own borders. The dissenting justices believed that the Arkansas law in question, which set maximum rates for intrastate freight transportation, did not violate any federal laws or regulations and should therefore be upheld. They contended that states have inherent power to control their internal affairs and protect their citizens from excessive charges imposed by corporations operating within their boundaries unless such regulation directly conflicts with federal legislation or constitutional provisions. In this case, they saw no such conflict existing between state and federal authority on rate-setting powers; hence they disagreed with the majority’s decision invalidating Arkansas’ law as an unconstitutional interference with interstate commerce.