In the case of Wabash Railroad Company v. Flannigan in 1903, the United States Supreme Court ruled on a dispute involving railroad property rights and compensation for damages. The plaintiff, Flannigan, had leased land from the defendant, Wabash Railroad Company. A fire originating from sparks emitted by one of the company's passing locomotives destroyed his crops and fences on this leased land. He sued for damages but was denied recovery by lower courts because his lease agreement contained a clause exempting the railroad company from liability for such losses. The Supreme Court upheld these rulings stating that it is not against public policy to include clauses in contracts that limit or absolve parties of liability under certain circumstances as long as they are reasonable and do not violate any statutory provisions or constitutional principles. In this instance, since both parties were aware of potential risks associated with proximity to railway operations when entering into their contract (as evidenced by inclusion of said clause), no unfair advantage was taken nor undue burden imposed upon either party.

The dissenting opinion in the Wabash Railroad Company v. Flannigan case argued that the majority's decision was a departure from established precedent and an overreach of federal power. The dissenters believed that states should retain their authority to regulate railroad rates within their borders, as long as those regulations do not interfere with interstate commerce or violate any other constitutional provision. They contended that the majority's ruling effectively stripped states of this right, giving too much regulatory power to Congress and potentially leading to monopolistic practices by railroads unchecked by state-level oversight. Furthermore, they expressed concern about potential negative impacts on local economies due to lack of competition if only federal regulation were allowed.