The U.S. Supreme Court case Standard Oil Company of New Jersey v. Southern Pacific Company and James C. Davis, Director General of Railroad in 1924 revolved around the issue of whether a railroad company could charge more for transporting oil in tanks owned by the shipper than it did for oil transported in its own tanks. The court ruled that such differential pricing was not inherently discriminatory or unlawful under the Interstate Commerce Act, which required railroads to provide equal services at equal rates to all shippers. However, if this practice resulted in unjust discrimination against certain shippers or gave undue preference to others, it would be considered illegal under the act's provisions.

In the dissenting opinion for Standard Oil Company of New Jersey v. Southern Pacific Company and James C. Davis, Director General of Railroad (1924), Justice McReynolds expressed his disagreement with the majority's interpretation of the Hepburn Act. He argued that it was not Congress' intention to allow a shipper to recover damages from a carrier when they had been charged more than what was considered reasonable by the Interstate Commerce Commission (ICC). According to him, if such an overcharge occurred, it should be treated as a penalty or forfeiture rather than as compensation for actual damage suffered by the shipper. Furthermore, he contended that allowing shippers to sue carriers would lead to excessive litigation and undermine uniformity in rates set by ICC which could potentially destabilize commerce across state lines.