In the case of Kansas City Southern Railway Company v. Kaw Valley Drainage District, 1913, the U.S Supreme Court was tasked with determining whether a state law that required railroads to pay for drainage improvements violated the Fourteenth Amendment's due process clause. The railway company argued that it should not be held responsible for these costs as they did not directly benefit from them. However, the court ruled in favor of Kaw Valley Drainage District stating that such assessments were within a state’s police power if they were reasonable and conferred some benefit on property owners subject to them. It concluded that while there may have been no direct advantage to the railroad from this particular improvement project, there was an indirect one because better overall community conditions would likely lead to increased business for it in future.

In the dissenting opinion for Kansas City Southern Railway Company v. Kaw Valley Drainage District, Justice Holmes disagreed with the majority's ruling that a railway company could be held liable for damages caused by its failure to maintain proper drainage under its tracks. He argued that the state law requiring railroads to provide adequate drainage was not intended to create a private right of action for property owners affected by flooding due to inadequate maintenance. Instead, he believed it was designed as a regulatory measure enforceable through fines or other penalties imposed by public authorities. Furthermore, he contended that even if such a right did exist, it should only apply in cases where there is direct and immediate damage resulting from negligence on part of the railroad company rather than indirect harm caused over time due to natural causes like rainfall which are beyond control of any entity.