In the 1904 U.S. Supreme Court case, Helena Water Works Company v. Helena, the court ruled in favor of the city of Helena, Montana against a private water company that had been granted exclusive rights to supply water to its residents for fifty years. The dispute arose when the city decided to establish its own public water system before this contract expired and without compensating the company for their investment in infrastructure or loss of business. The court held that while contracts between municipalities and utility companies are legally binding, they cannot infrive upon a government's right to exercise eminent domain - i.e., take private property for public use with just compensation - as long as it is done so fairly and not arbitrarily or capriciously. Therefore, although Helena violated their agreement with the Water Works Company by setting up a competing service prematurely, they were within their rights under law provided they compensated them appropriately.

In the dissenting opinion for Helena Water Works Company v. Helena, it was argued that the city of Helena did not have a right to purchase the waterworks system at an arbitrary price set by them without considering its actual value. The justice believed that this action violated constitutional rights and protections against property seizure without just compensation. They also expressed concern over potential misuse of power by municipalities if they were allowed to unilaterally determine prices for private properties under their jurisdiction, which could lead to unfair practices and economic instability in communities across America. This view emphasized respect for individual property rights as a cornerstone of American democracy and free market capitalism.