In the case of United States v. Chicago, Burlington & Quincy Railroad Co., 1972, the Supreme Court ruled on whether a railroad company could claim compensation from the government for land taken under eminent domain that was originally granted to it by Congress. The court held that when federal lands are given to railroads as an incentive for construction and those lands later become part of public highways due to condemnation proceedings, no compensation is owed to the railroads. This decision was based on two main factors: firstly, because these grants were made with conditions attached which included potential reversionary interests in favor of the government; secondly, because allowing such claims would result in unjust enrichment for railroad companies at taxpayers' expense. Therefore, even though physical taking had occurred through eminent domain process initiated by state highway authorities acting under "color" of federal law (i.e., pursuant Federal-Aid Highway Act), this did not entitle railroad company to just compensation under Fifth Amendment's Takings Clause.

In the dissenting opinion for United States v. Chicago, Burlington & Quincy Railroad Co., Justice Douglas argued that the majority's decision failed to properly interpret and apply the Interstate Commerce Act. He contended that Congress intended for railroads to bear some of the costs associated with improving highway-rail crossings under Section 1(18) of this act. The majority ruling, he believed, effectively shifted all financial responsibility onto state and local governments which was not in line with congressional intent or previous court interpretations of this law. Furthermore, he disagreed with their interpretation regarding what constituted a 'reasonable' expenditure by railroad companies on these improvements as per Section 1(20). In his view, it should be determined case-by-case rather than setting an absolute limit at zero cost to railroads as decided by the majority.