In Louisville Gas Company v. Citizens' Gas Company, the United States Supreme Court was asked to decide whether a state law that granted a monopoly to a gas company was constitutional. The Louisville Gas Company had been granted a monopoly by the state of Kentucky, and the Citizens' Gas Company challenged the law, arguing that it violated the Fourteenth Amendment's Equal Protection Clause. The Supreme Court held that the state law was constitutional. The Court reasoned that the state had a legitimate interest in protecting the public health and safety, and that the monopoly granted to the Louisville Gas Company was a reasonable means of achieving that goal. The Court also noted that the monopoly was not absolute, as the state had the power to revoke it if the company failed to meet its obligations. The Court concluded that the state law did not violate the Equal Protection Clause, and that the Louisville Gas Company was entitled to the monopoly granted by the state. The Court's decision established that states have the power to grant monopolies in certain circumstances, provided that the monopoly is reasonable and serves a legitimate public purpose.

In Louisville Gas Company v. Citizens' Gas Company, the Supreme Court was asked to decide whether a state law that allowed for the consolidation of two gas companies violated the Fourteenth Amendment's Equal Protection Clause. The majority opinion held that it did not violate this clause because there were rational reasons behind allowing for such a merger and thus no discrimination had occurred. Justice Field dissented from this opinion, arguing that while there may have been some valid reasons behind allowing for such a merger, they could not outweigh the fact that it resulted in unequal treatment between similarly situated entities and therefore violated equal protection under the law as guaranteed by the Constitution. He argued further that if states are allowed to pass laws which result in unequal treatment based on arbitrary distinctions then all citizens would be subject to "the caprice of legislative majorities."