In the case of Vandalia Railroad Company v. Public Service Commission of Indiana, 1916, the U.S Supreme Court ruled in favor of the Public Service Commission. The dispute arose when the state commission ordered Vandalia Railroad to construct and maintain a railway crossing at its own expense for safety reasons. The railroad company argued that this order was an unconstitutional taking without just compensation under the Fifth Amendment as it imposed all costs on them without considering benefits accruing to public or other companies using same track. However, the court held that such regulation falls within police power of states and does not constitute a 'taking' in constitutional sense unless it has no reasonable relation to public safety or is so arbitrary and oppressive in nature as to interfere with use and enjoyment of property rights. Therefore, if there's substantial basis for believing that construction would promote public safety then cost allocation isn't unreasonable even if some benefit accrues to others too.

In the dissenting opinion for Vandalia Railroad Company v. Public Service Commission of Indiana, it was argued that the Supreme Court should not have jurisdiction over this case as it pertains to a state's internal affairs. The justice contended that the regulation and control of railroads within a state is an issue reserved for individual states under their police power, rather than federal authority. They further asserted that unless there is clear evidence of constitutional violation or infringement on interstate commerce, federal courts should refrain from interfering in such matters. In this particular case, they believed no such violations were present and thus deemed the court’s intervention inappropriate and unnecessary.