In the case of District of Columbia v. Lyon, the U.S Supreme Court ruled in favor of Mr. Lyon who had been charged with violating a local ordinance by erecting a wooden building within fire limits without obtaining permission from city authorities. The court found that while it was reasonable for the district to regulate construction within fire limits to prevent hazards, it was not permissible for them to grant or deny permits based on arbitrary decisions or personal judgment. Therefore, since there were no established standards guiding permit approvals and denials at that time, the ordinance under which Mr. Lyon was prosecuted violated his rights as protected by due process clause of Fifth Amendment.

In the dissenting opinion for the District of Columbia v. Lyon case, it was argued that there should be a clear distinction between public and private property rights. The justice disagreed with the majority's decision to uphold an act which allowed Washington D.C.'s city authorities to open, extend or widen any street, avenue or alley without providing compensation to affected property owners. He believed this violated citizens' Fifth Amendment rights against government taking private property for public use without just compensation. Furthermore, he contended that such actions could lead to potential abuses by local governments who might seize properties under false pretenses of urban development while actually serving their own interests or those of influential parties. This dissent emphasized respect for individual property rights as fundamental in maintaining a fair and democratic society.