In the case of Whitehouse et al. v. Illinois Central Railroad Co. et al., 1954, the U.S Supreme Court ruled in favor of Illinois Central Railroad Co., upholding a decision by the Kentucky Court of Appeals that denied damages to plaintiffs who had suffered property damage due to flooding allegedly caused by a railroad embankment built across their land without consent or compensation. The court held that under Kentucky law, an easement for drainage was implied when lands were sold off from larger tracts and this applied even if it wasn't explicitly stated in deeds or other conveyances. Therefore, since there was no physical invasion of plaintiff's property nor any direct obstruction to natural flowage resulting from defendant’s construction activities on its own land, there could be no recovery for consequential damages arising out of alleged increased flood hazards.

In the dissenting opinion for Whitehouse et al. v. Illinois Central Railroad Co. et al., the justice disagreed with the majority's decision to reverse and remand the case back to state court, arguing that it was a federal matter due to its implications on interstate commerce regulation. The dissent argued that because railroads are instrumentalities of interstate commerce, their operations should not be subject to interference from individual states through taxation or otherwise without clear congressional authorization. They contended that allowing states such power could lead to inconsistencies in regulations across different jurisdictions and potentially disrupt national economic stability by affecting railroad companies' ability to provide consistent service nationwide.