In the case of Cleveland v. Cleveland Electric Railway Company, 1903, the city of Cleveland filed a lawsuit against the railway company for not complying with an ordinance that required them to pave and maintain streets where their tracks were laid. The Supreme Court ruled in favor of the railway company stating that such an ordinance was unreasonable and oppressive as it imposed onerous obligations upon street railways which are beyond what is necessary for public safety or convenience. The court held that while municipalities have power over local improvements, they cannot impose undue burdens on companies operating under legislative franchises without clear authority from legislature itself. This decision reinforced limits on municipal powers when dealing with private corporations operating within their boundaries.

In the dissenting opinion for Cleveland v. Cleveland Electric Railway Company, Justice Harlan disagreed with the majority's decision that a city ordinance requiring street railway companies to sell eight tickets for a quarter was unconstitutional. He argued that this case did not involve any federal question warranting Supreme Court review because it was essentially about local affairs and state legislation. The justice believed that states should have the power to regulate public utilities within their jurisdiction, including setting reasonable rates for services provided by such entities. He also noted there were no allegations of confiscation or violation of due process rights in this case; rather, it seemed like an attempt by corporations to escape regulation under cover of constitutional protections meant for individuals' personal liberties and property rights.