In the case of Union Pacific Railroad Co. v. United States in 1959, the Supreme Court ruled on a dispute between several railroad companies and the federal government over who should bear responsibility for paying taxes on fuel used by trains during World War II. The railroads argued that under their contracts with the government, they were entitled to be reimbursed for any "increases in costs" - which they claimed included higher taxes on diesel fuel enacted during wartime. However, the U.S Government contended that these tax increases did not constitute an increase in costs as defined by their contract agreement. The Supreme Court sided with the federal government's interpretation of this contractual language ruling against Union Pacific Railroad Company and other railroads involved in this lawsuit. They held that increased taxation does not equate to an 'increase in cost' within meaning of recapture provisions contained within agreed upon contracts between railway companies and US Government regarding transportation services provided during WWII period.

In the dissenting opinion for Union Pacific Railroad Co. v. United States, Justice Brennan disagreed with the majority's interpretation of Section 15(3) of the Interstate Commerce Act. He argued that this section does not grant authority to the Commission to prescribe maximum reasonable rates based on a percentage division of joint costs between connecting carriers, but rather only allows it to determine whether an existing division is unjust or unreasonable and then correct it if necessary. Furthermore, he contended that even if such power were granted by Section 15(3), its exercise in this case was arbitrary because there was no evidence showing that Union Pacific’s share was excessive compared to what other railroads received for similar services under comparable conditions.