In the 1928 case of Frost v. Corporation Commission of Oklahoma, the U.S. Supreme Court ruled that a state law requiring cotton ginners to obtain licenses and comply with regulations was unconstitutional because it violated due process rights under the Fourteenth Amendment. The court held that while states have broad power to regulate businesses for public welfare, they cannot impose arbitrary or unreasonable requirements that infrally on personal liberties or property rights without due process of law. In this case, Mr. Frost argued successfully that his business was being unfairly targeted by these regulations and licensing requirements which were not applied equally across all similar businesses in Oklahoma.

In the dissenting opinion for Frost v. Corporation Commission of Oklahoma, Justice Holmes argued that the state had a right to regulate business activities within its borders and protect public interests. He believed that if a company chooses to engage in an industry subject to regulation, it must accept those regulations as part of doing business. The majority's decision was based on the idea that requiring businesses like Mitchell Gin Company to become public utilities violated their 14th Amendment rights by depriving them of property without due process. However, Holmes disagreed with this interpretation and felt it was not unconstitutional for states to impose certain conditions on businesses operating within their jurisdiction. He saw no issue with Oklahoma's law requiring cotton ginners who wanted access to local cotton crops - which were considered essential commodities - becoming public utilities as long as they operated under fair terms set by regulatory authorities.