The U.S Supreme Court case City of Cleveland v. Cleveland City Railway Company in 1903 revolved around a dispute between the city and the railway company over streetcar fare prices. The city had granted a franchise to the railway company with an agreement that fares would not exceed five cents, but later passed an ordinance reducing this to three cents. The railway company argued that this was unconstitutional as it violated their contract rights under the Fourteenth Amendment's Due Process Clause, which prohibits states from depriving any person of life, liberty or property without due process of law. However, the court ruled in favor of the city by upholding its power to regulate public utilities for public welfare purposes even if such regulation interferes with private contractual arrangements.

In the dissenting opinion for the City of Cleveland v. Cleveland City Railway Company case, it was argued that the city had no right to impose a reduction in fares on the railway company without offering just compensation. The justice believed this action violated constitutional protections against taking private property for public use without fair payment. He contended that while cities have certain regulatory powers over utilities and other businesses operating within their limits, these powers do not extend to altering or impairing contractual obligations between parties unless there is an overriding public interest at stake. In this case, he did not see such an interest as being present and therefore disagreed with majority's decision which upheld city's ordinance reducing streetcar fares from five cents to three cents per ride.