The U.S. Supreme Court case City of Opelika v. Opelika Sewer Company in 1923 revolved around a dispute between the city and a private sewer company over the validity of an ordinance passed by the city council that established rates for sewage disposal services provided by the company to its residents. The sewer company argued that this action violated their rights under both state law and federal Constitution, specifically citing infringement on due process clause of Fourteenth Amendment which prohibits any state from depriving "any person of life, liberty or property without due process of law." However, after careful consideration, the Supreme Court ruled in favor of City Of Opelika stating that setting such rates was within its regulatory powers as long as it did not result into confiscation. The court also noted that while private companies have right to fair return on their investments; they are subject to regulation when providing public utilities like sewage disposal service.

In the dissenting opinion for the case of City of Opelika v. Opelika Sewer Company, Justice Holmes argued that a city's power to regulate utilities should not extend to setting rates so low as to effectively confiscate property. He contended that while public interest is important, it cannot justify taking private property without just compensation. The justice believed that if a company has invested in infrastructure under an agreement with the city and then the city changes its mind about acceptable rates, this constitutes a breach of contract and unfair treatment towards businesses who have made significant investments based on those agreements. Therefore, he disagreed with majority’s decision which upheld such regulation by cities.