In the United States v. Elgin, Joliet & Eastern Railway Co., 1935 case, the U.S. Supreme Court ruled in favor of the government and against a railway company that had been accused of violating federal safety regulations. The dispute arose when an inspector from the Interstate Commerce Commission (ICC) found several violations on one of Elgin's trains during a routine inspection. These included faulty brakes and other equipment issues which were deemed to pose significant risks to public safety if not addressed immediately. The railway company argued that it was exempt from these regulations because its operations were confined within Illinois state borders and did not cross into any other states or engage in interstate commerce activities as defined by law at that time. However, after reviewing evidence presented by both sides, including detailed maps showing how Elgin’s rail network connected with others across multiple states thus forming part of an integrated national transportation system - even though its own tracks stayed within Illinois - the court concluded otherwise. It held that despite their intrastate nature, Elgin's operations still affected interstate commerce significantly enough for federal laws to apply under what is known as "the stream-of-commerce doctrine". This landmark decision helped establish important legal precedents regarding federal jurisdiction over local businesses involved indirectly in interstate commerce.

In the dissenting opinion for United States v. Elgin, Joliet & Eastern Railway Co., Justice Stone argued that the Interstate Commerce Commission (ICC) should not have jurisdiction over intrastate commerce when it interferes with interstate commerce. He believed this case was a matter of state authority and did not fall under federal regulation as per the Constitution's Commerce Clause. The majority decision allowed ICC to regulate rates on purely local traffic within Illinois because they indirectly affected interstate commerce by causing congestion, but Justice Stone disagreed. He contended that such an interpretation would give Congress virtually unlimited power over all aspects of business in every state, which he saw as contrary to constitutional principles of federalism and states' rights.