In the 1926 case of Fort Smith Light and Traction Company v. Board of Improvement of Paving District No. 16, the U.S Supreme Court ruled in favor of the Board, upholding an assessment for street improvements against a public utility company operating under a franchise from the city. The court held that such assessments did not constitute an unlawful impairment of contract rights or deprive property without due process as claimed by Fort Smith Light and Traction Company. The court reasoned that when accepting its franchise to operate within city limits, it was implicit that the company accepted potential obligations like these improvement assessments which were part and parcel with maintaining infrastructure necessary for their operations.

In the dissenting opinion for Fort Smith Light and Traction Company v. Board of Improvement of Paving District No. 16, it was argued that the majority's decision to uphold a special assessment on the company's property violated principles of equal protection under law. The dissenting justices contended that this tax unfairly targeted one specific entity without clear justification or equitable distribution among other similar entities in the area. They also questioned whether there was sufficient benefit to justify such an imposition, arguing that any improvements made by paving would be offset by increased costs and burdens placed upon them due to their unique position as a public utility provider within this district. Furthermore, they expressed concerns about potential abuse of power if local governments were allowed unchecked authority to levy taxes against select businesses or individuals at their discretion.