In the case of City of Louisville v. Cumberland Telephone & Telegraph Company, 1911, the Supreme Court was tasked with determining whether a city ordinance that required telephone companies to obtain consent from property owners before installing poles and wires infringed upon state-granted rights. The Cumberland Telephone & Telegraph Company had been granted permission by Kentucky's legislature to construct its network across public lands in cities without needing additional local approval. However, Louisville passed an ordinance requiring further permissions from adjacent property owners for any new installations or repairs on existing ones. The Supreme Court ruled in favor of the telegraph company stating that once a state has given a corporation certain rights and privileges, they cannot be taken away or limited by municipal regulations unless specifically allowed under the charter issued by the state. Therefore, it held that Louisville's ordinance was invalid as it conflicted with powers already granted to Cumberland by Kentucky's legislature.

In the dissenting opinion for the case City of Louisville v. Cumberland Telephone & Telegraph Company, Justice Holmes disagreed with the majority's decision that a city ordinance requiring telephone companies to bury their wires was unreasonable and therefore unconstitutional. He argued that it is not within the purview of courts to determine whether such an ordinance is reasonable or not; rather, this should be left up to local authorities who are more familiar with specific conditions and needs in their areas. Furthermore, he contended that if there were any doubts about reasonableness, they should be resolved in favor of legality since cities have inherent police power to regulate businesses for public safety purposes. Therefore, according to him, unless there is clear evidence showing abuse or misuse of this power by local authorities (which wasn't demonstrated in this case), courts shouldn't interfere with their decisions.