In the 1915 case of Houck v. Little River Drainage District, the U.S Supreme Court ruled in favor of a drainage district's right to tax landowners for improvements that would benefit their property. The plaintiff, Houck, owned land within Missouri's Little River Drainage District and objected to being taxed for drainage improvements he claimed did not directly benefit his property. He argued this violated his Fourteenth Amendment rights by depriving him of property without due process or equal protection under law. The court disagreed with Houck’s argument stating that it was reasonable for all lands benefiting from an improvement project to share its cost even if some parcels benefited more than others. It held that such taxation did not violate the Constitution as long as it was done fairly and reasonably related to benefits received by properties assessed. This decision affirmed states' power over local matters like water management and reinforced principles of fairness in taxation policy; confirming government entities can levy taxes on private citizens when those funds are used towards public projects which indirectly or directly enhance value or utility of their properties.

In the dissenting opinion for Houck v. Little River Drainage District, Justice Holmes argued that the state of Missouri had a right to alter its natural resources in order to promote public health and welfare. He disagreed with the majority's view that this action constituted an infringement on private property rights without due process of law. Instead, he contended that it was within Missouri’s police power to make such changes if they were deemed necessary for public good. Furthermore, he believed there was no violation of interstate commerce laws as claimed by Houck because any potential impact on navigation would be incidental and not substantial enough to warrant federal intervention under those grounds.