In the case of Fifth Avenue Coach Company v. City of New York in 1910, the Supreme Court ruled on a dispute between a private transportation company and the city government over operating rights for horse-drawn omnibuses. The Fifth Avenue Coach Company had been granted an exclusive franchise by New York State to operate these vehicles along certain routes within Manhattan. However, when the city attempted to introduce its own municipal bus service along similar routes, the company sued, claiming that this violated their state-granted monopoly. The Supreme Court sided with the City of New York in this matter. It held that while states have broad powers to grant franchises like those given to Fifth Avenue Coach Company, they cannot use such grants as a way to limit or interfere with local governments' inherent right and responsibility for managing public streets and thoroughfares within their jurisdiction - including deciding who can provide services like bus transport on them. This ruling affirmed cities' authority over local transportation matters against potential encroachments from both private companies and higher levels of government.

The dissenting opinion in the Fifth Avenue Coach Company v. City of New York case argued that the city's decision to revoke a franchise agreement with the coach company was unjustified and violated contractual obligations. The justice believed that once a contract is made, it should be upheld unless there are compelling reasons for its termination. In this case, he did not see any such reason as there were no allegations of misconduct or failure on part of the company to fulfill its duties under the contract. He also pointed out that public franchises like these involve significant investments from private entities who rely on their contracts being honored by government bodies and thus, revoking them arbitrarily can have serious financial implications for those involved. Therefore, he disagreed with majority's ruling favoring city's right to terminate franchise agreements at will without providing sufficient justification.