In the 1922 case of Columbia Railway, Gas & Electric Company v. State of South Carolina, the Supreme Court ruled in favor of the state. The dispute arose when South Carolina imposed a tax on gross receipts from passenger fares and sales of electricity and gas by public utilities operating within its borders. Columbia Railway, Gas & Electric Company argued that this taxation was unconstitutional as it violated both due process under the Fourteenth Amendment and interfered with interstate commerce. The court disagreed with these arguments stating that states have broad powers to levy taxes for revenue purposes unless expressly prohibited by federal law or constitutionally impermissible. It further clarified that such taxation does not interfere with interstate commerce if it is applied to intrastate business activities only. Moreover, regarding due process violation claims, the court held that there was no deprivation without due process since all businesses were treated equally under this tax scheme regardless of whether they operated solely within South Carolina or had operations extending beyond state lines too.

In the dissenting opinion for Columbia Railway, Gas & Electric Company v. State of South Carolina, Justice Holmes argued that the majority's decision was based on an incorrect interpretation of the law and a misunderstanding of economic principles. He contended that it is not unconstitutional for a state to regulate rates charged by public utilities, as long as those rates allow for reasonable returns on investment. According to him, there was no evidence presented in this case suggesting that regulated rates were confiscatory or did not permit such returns. Furthermore, he criticized the majority's reliance on market value rather than actual cost in determining what constitutes just compensation under eminent domain laws. This approach fails to consider depreciation and other factors affecting asset values over time which could lead to unjust enrichment at public expense if unregulated monopolies are allowed excessive profits due their unique position in society.