In the 1896 case of Wabash Railroad Company v. Defiance, the U.S Supreme Court ruled in favor of the railroad company. The dispute arose when Defiance, a city in Ohio, demanded that Wabash Railroad Company pay for improvements made to a street crossing over its tracks. The court held that under Ohio law and its constitution, cities could not impose such costs on railroads without providing just compensation as required by the Fourteenth Amendment's due process clause. This ruling was significant because it established limits on local governments' power to regulate railroads and other corporations operating within their jurisdictions without violating constitutional protections against taking private property for public use without fair compensation.

In the dissenting opinion for Wabash Railroad Company v. Defiance, the justice argued that states should retain some regulatory power over interstate commerce when federal law is silent or insufficient. The justice disagreed with the majority's interpretation of the Commerce Clause, which stripped states of their ability to regulate rates on goods transported both within and across state lines by railroads. This view held that such a broad interpretation could lead to monopolistic practices by railroad companies and harm consumers due to lack of competition or regulation. Furthermore, it was contended that this ruling would create an imbalance between federal and state powers as envisioned in the Constitution's framework for dual sovereignty.