In the case of Covington and Lexington Turnpike Road Company v. Sandford in 1896, the U.S Supreme Court ruled on a dispute involving toll road rights. The plaintiff, Covington and Lexington Turnpike Road Company, had been granted by Kentucky's legislature exclusive rights to collect tolls along a specific route for a period of twenty years. However, defendant Sandford constructed another road parallel to it within less than half mile distance which was free for public use. This led to significant loss in revenue for the plaintiff who then sued Sandford claiming violation of its contract with the state. The court held that while states have power to make contracts regarding property used for public purposes like roads or bridges; they cannot create monopolies or exclusivities that infringe upon citizens' right of travel or transport goods freely without paying unnecessary tolls unless absolutely necessary due to lack of alternatives. Therefore, despite having an agreement with Kentucky's legislature granting them exclusive rights over their turnpike road; this did not prevent others from constructing similar routes nearby as long as they were not using same exact path.

In the dissenting opinion for Covington and Lexington Turnpike Road Company v. Sandford, Justice Harlan disagreed with the majority's ruling that a state could not regulate rates of private companies without violating their constitutional rights. He argued that such regulation was within a state's police power to protect public welfare, especially when it concerned businesses affected with a public interest like transportation or communication companies. He believed these types of businesses had obligations towards society due to their nature and thus should be subject to government control in terms of setting reasonable rates. This would prevent them from exploiting consumers by charging excessive fees while still ensuring they received fair compensation for their services. Furthermore, he contended that courts should defer to legislative judgment on what constituted "reasonable" rates unless there was clear evidence of abuse or discrimination against certain groups.