The United States Supreme Court case, United States of America, Interstate Commerce Commission, Atchison, Topeka & Santa Fe Railway Company et al. v. Merchants & Manufacturers Traffic Association of Sacramento et al., 1916 revolved around the issue of discriminatory railway rates by the Atchison, Topeka and Santa Fe Railway Company (ATSF). The Merchants and Manufacturers Traffic Association claimed that ATSF was charging higher freight rates for shorter distances than longer ones in violation of federal law. The Interstate Commerce Commission sided with the association but ATSF appealed to the Supreme Court arguing it had a right to set its own prices based on market conditions rather than distance traveled. However, the court upheld ICC's decision stating that while railroads could consider factors other than distance when setting prices under certain circumstances; they were still bound by laws against unreasonable discrimination between shippers.

The dissenting opinion in this case argued that the Interstate Commerce Commission (ICC) did not have the authority to set aside a rate established by a railroad company unless it was proven to be unreasonable. The justices contended that while Congress had given the ICC power to regulate interstate commerce, it did not grant them unlimited discretion. They believed that if a rate is within reasonable limits, then its reasonableness should be determined by market competition and not regulatory intervention. Furthermore, they held that there was no evidence presented proving these rates were causing harm or were unjustly discriminatory against any particular group of shippers. Therefore, they disagreed with the majority's decision which upheld ICC's order for reduced rates on certain commodities shipped from California to points eastward.