In the case of Home Telephone and Telegraph Company v. City of Los Angeles, the Supreme Court ruled in 1912 that a city has the right to regulate public utilities within its jurisdiction. The Home Telephone and Telegraph Company had challenged an ordinance by the City of Los Angeles which set rates for telephone service, arguing it was unconstitutional as it violated their rights under Fourteenth Amendment's due process clause. However, Justice Oliver Wendell Holmes Jr., writing for a unanimous court, held that rate regulation did not constitute a taking without just compensation nor did it deny due process or equal protection under law. He reasoned that since public utilities use public property (streets) to conduct business they are subject to reasonable control by cities on behalf of citizens who own those streets.

In the dissenting opinion for Home Telephone and Telegraph Company v. City of Los Angeles, Justice Oliver Wendell Holmes Jr. argued that the majority's decision was inconsistent with previous rulings on similar matters. He contended that a city should have the right to control its own streets and regulate businesses operating within them, including telephone companies like Home Telephone & Telegraph Co., without interference from federal courts unless it clearly violates constitutional rights or federal law. The justice believed that this case did not meet those criteria as there was no clear violation of due process or equal protection clauses by imposing different tax rates on competing telephone companies based on their gross receipts rather than property value alone. Furthermore, he asserted that any potential harm caused by such regulation would be outweighed by public benefits derived from local government’s ability to manage its resources effectively in serving community needs.