In the case of Thompson, Trustee, et al. v. Texas Mexican Railway Co., 1945, the U.S Supreme Court was tasked with determining whether a railway company could be held liable for damages caused by a fire that started from sparks emitted by one of its locomotives. The fire had spread to nearby land owned by Thompson and others who subsequently sued for compensation. However, under Texas law at that time, railroads were not responsible for such damages unless negligence could be proven - which it couldn't in this instance as the railroad had taken all reasonable precautions against fires starting from their locomotives' sparks. The plaintiffs argued that this state law violated their Fourteenth Amendment rights (which guarantees equal protection under the law) because it unfairly protected railroads over other types of businesses which would have been held accountable in similar circumstances. However, the Supreme Court disagreed and upheld the validity of Texas's statute on grounds that states have broad powers to regulate industries within their borders and determine liability rules accordingly; thus no constitutional violation occurred here since there was a rational basis behind treating railways differently due to unique risks associated with operating them.

In the dissenting opinion for Thompson, Trustee, et al. v. Texas Mexican Railway Co., Justice Frank Murphy argued that the majority's decision to uphold a lower court ruling allowing a railroad company to abandon its line without state approval undermined states' rights and threatened public welfare. He contended that railroads are not merely private businesses but serve vital public functions and thus should be subject to both federal and state regulation. In his view, while it is necessary for bankrupt or financially struggling railroads to have some means of relief, this should not come at the expense of overriding state laws designed to protect local communities' interests in maintaining essential transportation services.