In the 1906 case of Covington and Cincinnati Bridge Company v. Hager, the U.S Supreme Court ruled in favor of the plaintiff, Mr. Hager. The dispute arose when a Kentucky law was enacted that required companies to provide free passage across bridges for individuals traveling with horse-drawn vehicles if they were going to or returning from church services on Sundays. The bridge company refused to comply with this law and charged tolls regardless of the day or purpose of travel, arguing that it violated their Fourteenth Amendment rights by depriving them property without due process as well as equal protection under laws since other businesses weren't subjected to similar requirements. The court disagreed with these arguments stating that states have broad powers in regulating private property used for public purposes such as transportation infrastructure like bridges; therefore, requiring free passage did not constitute an unreasonable regulation nor violate any constitutional rights. Furthermore, it held that there was no violation regarding equal protection because different types of businesses can be treated differently based on reasonable classifications made by state legislatures.

In the dissenting opinion for Covington and Cincinnati Bridge Company v. Hager, Justice Holmes argued that the majority's decision to uphold a Kentucky law regulating tolls on privately owned bridges was incorrect. He believed that this ruling violated the Contract Clause of the U.S. Constitution by interfering with private contractual rights without providing just compensation or serving a significant public interest. According to him, while states have broad powers to regulate businesses in their jurisdiction, they cannot arbitrarily interfere with private contracts or property rights under guise of regulation unless it is necessary for protecting public health, safety or welfare. In this case, he saw no such necessity and hence disagreed with majority’s view which upheld state’s power over private contract rights.