The U.S. Supreme Court case, Market Street Railway Co. v. Railroad Commission of California et al., 1944, revolved around the issue of whether a state could regulate rates for privately-owned public utilities without violating the due process clause in the Fourteenth Amendment. The Market Street Railway Company challenged an order by the California Railroad Commission that reduced its transit fares from seven to five cents and eliminated free transfers between lines owned by different companies but operated as part of a single system under municipal control. The company argued this would lead to financial losses and was therefore unconstitutional. However, the Supreme Court upheld the commission's decision stating that it did not violate any constitutional rights or principles because rate regulation is within states' police power if it serves public interest and does not confiscate property without just compensation; furthermore, potential future loss doesn't constitute confiscation per se unless proven otherwise with clear evidence which wasn't provided in this case.

In the dissenting opinion for Market Street Railway Co. v. Railroad Commission of California, Justice Robert H. Jackson argued that the majority's decision to uphold a rate order by the California Railroad Commission was an overreach of federal power and infringed upon states' rights to regulate their own public utilities. He contended that there was no constitutional basis for this interference in state affairs, as it did not involve interstate commerce or any other federal interest. Furthermore, he expressed concern about potential consequences of such intervention on local economies and governance structures; if states could not control their own utility rates without fear of federal courts overturning them, they would be left powerless in managing critical aspects of their infrastructure and economy.