In the 1932 case of Transit Commission et al. v. United States et al., the U.S Supreme Court ruled in favor of federal jurisdiction over interstate commerce, specifically regarding railroad rates and operations. The New York State Transit Commission sought to prevent five major railroads from implementing a rate increase that had been approved by the Interstate Commerce Commission (ICC). The state commission argued that it should have authority over these changes as they affected intrastate commerce within New York. However, the Supreme Court held that because railway systems are part of an interconnected national network, their operation is inherently involved in interstate commerce and thus falls under federal regulation through agencies like ICC. Therefore, states cannot interfere with federally-approved decisions on matters such as rate increases.

In the dissenting opinion for the case of Transit Commission et al. v. United States et al., Justice McReynolds argued that the Interstate Commerce Commission (ICC) did not have jurisdiction over intrastate rates, even if they affected interstate commerce indirectly. He believed this was a matter reserved to individual states under their police powers and that federal intervention would undermine state sovereignty. Furthermore, he contended that Congress had not intended to give such broad power to regulate intrastate commerce when it established the ICC in 1887 or amended its charter in 1910 and 1920. The majority's interpretation of these laws, according to him, went beyond what was constitutionally permissible and threatened an unwarranted expansion of federal authority at expense of states' rights.