In the case of United States and Interstate Commerce Commission v. Pennsylvania Railroad Company in 1916, the Supreme Court was asked to determine whether a railroad company could charge different rates for similar services provided on different routes. The Pennsylvania Railroad Company had been charging more for freight transport on its shorter route than it did on a longer one, arguing that market competition justified this discrepancy. However, both the U.S government and Interstate Commerce Commission (ICC) disagreed with this practice as they believed it violated laws against unreasonable or discriminatory pricing under the Interstate Commerce Act. The Supreme Court sided with the ICC and U.S government stating that railroads cannot justify higher prices for shorter routes simply based on what competitors are charging; instead, their rates must be reasonable when compared to costs incurred by providing such service. This ruling reinforced regulatory authority over interstate commerce ensuring fair practices within transportation industries.

In the dissenting opinion for United States and Interstate Commerce Commission v. Pennsylvania Railroad Company, it was argued that the Supreme Court should not have jurisdiction over this case as it pertains to a matter of state law rather than federal law. The dissenters believed that the Pennsylvania Railroad Company had acted within its rights under state laws when setting freight rates and therefore, any disputes regarding these rates should be settled at a state level. They also disagreed with the majority's interpretation of what constitutes 'reasonable' rates, arguing that this is subjective and can vary greatly depending on individual circumstances or perspectives. Furthermore, they contended that by intervening in such matters, the court was effectively undermining states’ rights to regulate their own industries which could set a dangerous precedent for future cases.