In the case of Lindheimer et al. v. Illinois Bell Telephone Co., 1933, the U.S Supreme Court ruled in favor of Illinois Bell Telephone Company (IBTC). The issue at hand was whether or not a state could regulate and reduce rates for a private utility company without violating its constitutional rights to due process and equal protection under law. The State Public Utilities Commission had ordered IBTC to lower their rates, which they argued would result in inadequate returns on their investments, thereby infringing upon their property rights protected by the Fourteenth Amendment. However, the court held that states have broad powers to regulate utilities within reasonable bounds for public interest purposes as long as it does not lead to confiscation of property or destruction of value - this is known as "rate base" regulation principle. In this case, while acknowledging that rate reduction might decrease profits slightly, it did not amount to confiscation nor destroy fair return opportunity on investment; hence no violation occurred.

In the dissenting opinion for Lindheimer et al. v. Illinois Bell Telephone Co., Justice Brandeis argued that the court had overstepped its bounds by intervening in a state regulatory matter, which he believed should have been left to local authorities. He contended that it was not within the jurisdiction of federal courts to determine fair rates for public utilities, as this responsibility fell under state police power and administrative expertise. Furthermore, he expressed concern about potential negative impacts on states' rights and their ability to regulate industries within their borders if such interventions were allowed to continue unchecked. In his view, only when there is clear evidence of confiscation or violation of constitutional rights should federal courts interfere with rate-setting decisions made by state commissions.