In the case of City of Houston v. Southwestern Bell Telephone Company, the Supreme Court ruled in favor of Southwestern Bell. The city had attempted to regulate and reduce rates for telephone services provided by the company within its jurisdiction. However, Southwestern Bell argued that this was an infringement on their Fourteenth Amendment rights as it deprived them of property without due process and denied them equal protection under law. The court agreed with this argument, stating that while cities have a right to ensure fair and reasonable rates for public utilities, they cannot do so in a way that is confiscatory or unjustly impairs the value or return on investment for these companies.

In the dissenting opinion for the case City of Houston v. Southwestern Bell Telephone Company, it was argued that the city had no right to regulate rates charged by a private company like Southwestern Bell. The justice believed that such regulation constituted an overreach of government power and violated principles of free enterprise. He contended that if customers found rates too high, they could simply choose not to use the service or switch to another provider - market competition would naturally keep prices in check without need for governmental interference. Furthermore, he pointed out potential dangers inherent in allowing governments to control pricing within private industries; this could lead down a slippery slope towards more extensive forms of economic intervention and potentially even socialism. Therefore, from his perspective, it was crucially important for courts to uphold limits on governmental authority as defined by constitutional law.