The United States Supreme Court case, United States v. Louisville & Nashville Railroad Company (1914), involved the interpretation of the Hepburn Act of 1906 which regulated railroad rates. The U.S. government, represented by Attorney General McReynolds, argued that the Louisville & Nashville Railroad Company was charging excessive and discriminatory freight rates for transporting coal in violation of this act. The railroad company countered that its rates were justifiable due to market competition and operating costs. In a unanimous decision led by Justice Oliver Wendell Holmes Jr., the court ruled in favor of the government stating that railroads must adhere to reasonable rate regulations set forth under federal law regardless of competitive circumstances or operational expenses.

In the dissenting opinion for United States v. Louisville & Nashville Railroad Company, Justice Holmes disagreed with the majority's decision to uphold an order by the Interstate Commerce Commission that required railroads to provide equal rates for short and long hauls. He argued that there was no evidence of discrimination against small shippers or favoritism towards large ones, which would have justified such a regulation under the Interstate Commerce Act. Instead, he believed this case involved purely economic considerations about how best to price railroad services in different markets - matters better left to business judgment than government intervention. Furthermore, he warned that forcing railroads into unprofitable pricing structures could ultimately harm consumers more than it helped them by destabilizing these companies' financial health and ability to invest in their operations.