In the case of Connecticut Railway & Lighting Co. v. Palmer et al., Trustee, 1938, the U.S Supreme Court ruled on a dispute involving bankruptcy and public utilities regulation. The Connecticut Railway & Lighting Company was in receivership and sought to increase its rates for services provided to consumers without approval from state regulators, arguing that it needed additional revenue to pay off creditors as part of its reorganization plan under federal bankruptcy law. However, this move was opposed by both consumers and state officials who argued that any rate increases should be subject to review by state regulatory authorities first before being implemented. The Supreme Court sided with the company's creditors and held that when a utility company is undergoing reorganization under federal bankruptcy laws, it can adjust its rates without prior approval from state regulators if necessary for successful reorganization. This decision underscored the supremacy of federal law over conflicting state regulations in matters related to bankruptcies.

In the dissenting opinion for Connecticut Railway & Lighting Co. v. Palmer et al., Trustee, it was argued that the majority's decision to uphold a state law allowing cities to purchase street railway systems at a price determined by an appointed commission violated the Fourteenth Amendment of the U.S Constitution. The dissenting justices contended that this ruling effectively permitted states to deprive corporations of their property without due process or just compensation, as required by constitutional protections against government takings. They believed that such laws could lead to arbitrary and unfair valuations of corporate assets, undermining private property rights and discouraging investment in public utilities infrastructure. Furthermore, they expressed concern about potential abuses of power if governments were allowed unchecked authority over private businesses operating within their jurisdictions.