In the case of Federal Power Commission v. Texaco Inc., 1973, the Supreme Court ruled in favor of the Federal Power Commission (FPC). The FPC had ordered Texaco and other natural gas companies to refund certain amounts they had collected from customers due to increased rates that were initially allowed by the FPC but later deemed unjust and unreasonable. The companies argued that this order was a violation of their constitutional rights as it retroactively changed legally set rates. However, the court held that since these rate changes were subject to being made permanent or denied after a hearing, there was no contractual obligation for them to remain unchanged. Therefore, ordering refunds did not constitute an unconstitutional deprivation of property without due process nor did it amount to taking private property for public use without just compensation.

In the dissenting opinion for Federal Power Commission v. Texaco Inc., Justice Douglas argued that the majority's decision to uphold the Federal Power Commission's (FPC) jurisdiction over independent producers of natural gas was a misinterpretation of both legislative intent and previous court rulings. He contended that Congress, in passing the Natural Gas Act, did not intend to give FPC authority over these independent producers who were already subject to state regulation. Furthermore, he believed that prior Supreme Court decisions had established a clear distinction between companies involved in interstate commerce and those merely affecting it - with only the former falling under FPC jurisdiction. By blurring this line, Douglas feared that all aspects of energy production could potentially be federalized which would undermine states' rights and upset our system of dual sovereignty.