In the case of Western Pacific Railroad Company v. United States in 1920, the Supreme Court ruled on a dispute involving land grants for railroad construction. The U.S government had granted certain lands to Western Pacific Railroad Company for building railroads under an act passed by Congress in 1862 and amended in 1864. However, some of these lands were also claimed by settlers under preemption laws which allowed them to purchase public land before it was offered for sale publicly. The court held that the rights of settlers who had made improvements on their claims prior to the grant being issued took precedence over those of the railroad company's right as per its grant from Congress. Therefore, if there was any conflict between settler’s rights and those given to railway companies through congressional acts, priority would be given to individuals who settled first.

In the dissenting opinion for Western Pacific Railroad Company v. United States, it was argued that the Interstate Commerce Commission (ICC) did not have the authority to determine what constituted a fair and reasonable rate without first considering whether or not such rates would allow railroad companies to earn a sufficient return on their investment. The dissenting justices believed that this approach violated due process rights of railroads under the Fifth Amendment by potentially forcing them into bankruptcy. They also disagreed with majority's interpretation of Hepburn Act, arguing that Congress intended for ICC to consider financial health of railroads when setting rates. Furthermore, they contended that ICC had failed in its duty as an impartial arbiter between public interest and private property rights by ignoring evidence presented by Western Pacific about its costs and potential insolvency if forced to comply with proposed lower freight rates.