In the 1905 case of California Reduction Company v. Sanitary Reduction Works, the Supreme Court ruled on a dispute involving two waste management companies in San Francisco. The city had granted an exclusive contract to the Sanitary Reduction Works for disposing of garbage and dead animals within its limits, which was challenged by the California Reduction Company as violating their rights under both state law and federal antitrust laws. However, the court upheld this arrangement based on public health concerns and necessity for efficient disposal services. It found that such contracts did not constitute a monopoly or restraint of trade because they were part of legitimate government functions aimed at protecting public health and safety. Therefore, it concluded that municipalities have broad powers to regulate waste disposal within their jurisdictions without infringing upon competition laws.

In the dissenting opinion for California Reduction Company v. Sanitary Reduction Works, Justice Harlan disagreed with the majority's interpretation of a city ordinance in favor of one company over another. He argued that it was not within the purview of the court to interpret local laws and ordinances unless they were clearly unconstitutional or violated federal law. In this case, he believed that there was no such violation and thus, it should have been left up to local authorities to decide on its implementation. Furthermore, he expressed concern about potential monopolistic practices if courts could arbitrarily rule in favor of one business over another based on their interpretations of municipal regulations rather than relying on established legal principles or constitutional rights.