In the case of Butte City Water Company v. Baker in 1904, the US Supreme Court dealt with a dispute over water rights between two Montana companies: The Butte City Water Co., which supplied drinking water to local residents, and the Boston & Montana Consolidated Copper & Silver Mining Co., which used large amounts of water for its mining operations. The court ruled that while both parties had valid claims to use the same source of water, priority should be given to domestic uses over industrial ones when there was not enough supply for both. Therefore, it upheld an injunction preventing Boston & Montana from using so much water that it interfered with Butte City's ability to provide sufficient drinking supplies.

The dissenting opinion in the case of Butte City Water Company v. Baker argued that the majority's decision to uphold a Montana law regulating water rates was an overreach of judicial power and infringed upon private property rights. The justice contended that it is not within the purview of courts to determine what constitutes reasonable or fair rates for public utilities, as this responsibility lies with legislative bodies. Furthermore, they expressed concern about potential abuse by state governments if such regulatory powers were left unchecked by federal oversight. They also disagreed with the majority's interpretation of "due process," arguing that it should protect businesses from arbitrary rate-setting which could effectively result in confiscation without compensation - a violation of constitutional rights.