In the case of Broad River Power Company et al. v. South Carolina ex rel. Daniel, Attorney General (1929), the Supreme Court ruled in favor of South Carolina's right to regulate hydroelectric power companies operating within its borders. The Broad River Power Company and other utility corporations challenged a state law requiring them to obtain certificates from the Public Service Commission before constructing new facilities or making significant changes to existing ones, arguing that it violated their rights under the Fourteenth Amendment due to lack of due process and equal protection clauses. However, Justice Holmes delivered an opinion for a unanimous court upholding this regulation as constitutional because states have inherent police powers allowing them to protect public welfare by regulating businesses affecting public interests such as utilities.

The dissenting opinion in the Broad River Power Company v. South Carolina case argued that the majority's decision to uphold a state law requiring power companies to obtain approval from a public service commission before selling their assets was unconstitutional. The dissenters believed this law violated the Contract Clause of the U.S Constitution, which prohibits states from passing laws that impair contractual obligations. They contended that when Broad River Power Company entered into contracts with other entities for sale of its properties, it had an expectation those contracts would be honored without interference from state legislation. Therefore, they viewed South Carolina’s requirement as an unlawful intrusion on private contract rights and economic liberty. Furthermore, they disagreed with the majority's interpretation of "public interest" used to justify regulation; arguing it was too broad and could potentially lead to excessive government control over private business transactions.