In the case of Boise Artesian Hot and Cold Water Company, Limited v. Boise City in 1912, the Supreme Court ruled on a dispute between a private water company and the city of Boise over water rights. The court upheld that municipalities have an inherent right to provide for public utilities such as water services, even if it means competing with or superseding existing private companies. The ruling was based on the principle that providing essential services like clean drinking water is within a municipality's police power - its authority to regulate behavior and enforce order within their jurisdiction for better health, safety, morals or general welfare of their inhabitants. Therefore, despite having granted franchises to private entities like the plaintiff (Boise Artesian Hot and Cold Water Company), cities are not barred from establishing similar enterprises themselves when they deem it necessary for public interest.

In the dissenting opinion for Boise Artesian Hot and Cold Water Company, Limited v. Boise City, it was argued that the city's ordinance to regulate water rates infringed upon private property rights without due process of law. The justice contended that while a municipality has the power to control public utilities within its jurisdiction, this authority does not extend to dictating prices in such a way as to deprive owners of their just profits. It was further asserted that there should be an impartial tribunal or judicial review available before any rate changes are enforced by local governments on privately owned utility companies. This would ensure fairness and prevent potential abuses of power by municipal authorities over businesses operating within their territories.