In Wabash Railway Company v. McDaniels, the Supreme Court of the United States was asked to decide whether a state law that prohibited railroads from charging higher rates for transporting passengers than for transporting freight was constitutional. The Court held that the law was unconstitutional because it violated the Commerce Clause of the United States Constitution. The case arose when the Wabash Railway Company, a railroad operating in Illinois, charged higher rates for transporting passengers than for transporting freight. The state of Illinois passed a law that prohibited railroads from charging higher rates for transporting passengers than for transporting freight. The Wabash Railway Company challenged the law, arguing that it violated the Commerce Clause of the United States Constitution, which gives Congress the power to regulate interstate commerce. The Supreme Court agreed with the Wabash Railway Company and held that the law was unconstitutional. The Court reasoned that the law interfered with the power of Congress to regulate interstate commerce and was therefore unconstitutional. The Court also held that the law was an unconstitutional interference with the right of the railroad to set its own rates. The Court's decision in Wabash Railway Company v. McDaniels established the principle that states cannot pass laws that interfere with the power of Congress to regulate interstate commerce. This principle has been applied in numerous cases since then and remains an important part of the law today.

In Wabash Railway Company v. McDaniels, the Supreme Court was tasked with determining whether a state court had jurisdiction to hear a case involving an alleged breach of contract between two parties from different states. The majority opinion held that such cases could not be heard in state courts and must instead be brought before federal courts as they are governed by the Constitution's Commerce Clause. Justice Field dissented, arguing that Congress has no authority to limit or control the power of individual states over their own citizens and matters within their borders unless it is specifically granted under the Constitution. He argued further that since there was no indication in this particular case that any interstate commerce was involved, then it should have been left up to each respective state court to decide if they had jurisdiction or not. Ultimately, he concluded that Congress does not possess exclusive power over all matters related to interstate commerce; rather, individual states retain some degree of autonomy when dealing with issues arising within their borders even if those issues may involve individuals from other states