In the case of Detroit United Railway v. People of the State of Michigan, 1916, the U.S Supreme Court ruled in favor of Detroit United Railway (DUR). The dispute arose when DUR challenged a law passed by Michigan that required street railway companies to sell eight tickets for a quarter and accept them as fare on all their lines within city limits. DUR argued this was unconstitutional because it violated its contract rights under Article I, Section 10 ("No state shall...pass any...Law impairing the Obligation of Contracts") and amounted to property confiscation without due process or just compensation under Amendment XIV. The court agreed with DUR's argument stating that while states have power over public utilities' rates through police powers, they cannot use this authority arbitrarily or unreasonably so as to destroy contractual obligations or take private property for public use without fair compensation.

In the dissenting opinion for Detroit United Railway v. People of the State of Michigan, Justice Holmes disagreed with the majority's decision that a state law requiring street railway companies to sell eight tickets for a quarter was unconstitutional. He argued that there was no evidence presented in court to prove that this requirement would prevent these companies from making reasonable profits or maintaining their property value. Furthermore, he stated that it is not within the Court's jurisdiction to decide what constitutes fair compensation unless it is so low as to be confiscatory and violate due process rights under the Fourteenth Amendment. In his view, if businesses choose to operate under conditions set by public authorities, they should accept those conditions without expecting courts to intervene on their behalf based solely on hypothetical scenarios about potential losses.