In the 1944 case American Power & Light Co. v. Securities & Exchange Commission, the Supreme Court upheld the constitutionality of a provision in the Public Utility Holding Company Act of 1935 that allowed for reorganization and dissolution of utility holding companies deemed to be "unnecessary or obsolete". The court ruled that Congress had not overstepped its bounds by delegating this authority to an administrative agency (the SEC), as it was within their power under interstate commerce regulation. Furthermore, they found no violation of due process rights because affected parties were given notice and opportunity for hearing before any action was taken. This decision affirmed federal regulatory powers over complex economic structures like public utilities.

In the dissenting opinion for American Power & Light Co. v. Securities & Exchange Commission, Justice Roberts argued that the majority's decision was a misinterpretation of the Public Utility Holding Company Act of 1935 and an overreach of federal power. He contended that Congress did not intend to give such broad authority to the SEC in regulating utility companies' capital structures or business operations when it passed this legislation. The justice believed that under proper interpretation, only those holding companies which were detrimental to public interest due to their size or complexity should be subject to regulation by SEC; otherwise, they should be left alone as per state laws governing corporations and securities transactions. Furthermore, he warned against potential negative implications on private property rights and free enterprise system from excessive government intervention into corporate affairs based on vague statutory language.