In the case of United States et al. v. Baltimore & Ohio Railroad Co. et al., 1934, the Supreme Court ruled on a dispute involving railroad freight rates for transporting coal in interstate commerce and whether they were discriminatory and violated the Interstate Commerce Act (ICA). The Baltimore & Ohio Railroad Company had established lower rates for long-haul transportation than short-haul routes over the same line, which was challenged by competing railroads and coal companies who claimed this practice was unjustly discriminatory under ICA provisions. The Interstate Commerce Commission (ICC) initially sided with complainants but upon review, federal courts set aside ICC's order as it failed to consider competitive conditions that justified these rate differences. The Supreme Court reversed this decision stating that while competition is a relevant factor in determining rate reasonableness under ICA, it does not justify or excuse practices found inherently unjust or unduly preferential/discriminatory. It held that ICC’s original findings were supported by substantial evidence showing undue preference given to certain localities/shippers causing harm to others; thus its order should have been enforced rather than being set aside.

The dissenting opinion in the United States v. Baltimore & Ohio Railroad Co., 1934, argued that the Interstate Commerce Commission (ICC) had overstepped its authority by attempting to regulate intrastate commerce. The ICC's decision to equalize rates between interstate and intrastate freight was seen as an intrusion into state sovereignty, which is protected under the Constitution. This argument hinged on a strict interpretation of federalism principles and states' rights, asserting that only Congress has the power to regulate interstate commerce while individual states retain control over their own internal affairs. The dissenters believed this case represented a dangerous expansion of federal power at the expense of state autonomy.