In the case of Memphis Light, Gas & Water Division et al. v. Craft et al., 1977, the United States Supreme Court ruled that a public utility company's decision to terminate service constitutes "state action" and thus falls under the purview of due process protections provided by the Fourteenth Amendment. The Crafts had their utilities disconnected without notice or opportunity for hearing after they refused to pay disputed charges on their bill. They sued Memphis Light, Gas & Water Division (MLGW), alleging violation of procedural due process rights as MLGW was acting under color of state law in terminating services essential to health and safety. The court held that because MLGW was a publicly owned entity with monopoly power granted by Tennessee law, its actions were sufficiently connected with governmental authority to be considered 'state action'. Therefore, it must comply with constitutional requirements when disconnecting services - including providing adequate notice and an opportunity for customers like Crafts to challenge billing errors before termination occurs.

In the dissenting opinion for Memphis Light, Gas & Water Division v. Craft, Justice William Rehnquist argued that the majority's decision to extend due process protections to public utility customers was a significant departure from established precedent. He contended that such an extension would unnecessarily burden public utilities and potentially lead to higher costs for consumers. Furthermore, he disagreed with the majority's interpretation of "property" under the Fourteenth Amendment, arguing that it should not include intangible interests like utility services. Instead, he believed property rights were traditionally associated with tangible assets or legally protected entitlements - neither of which applied in this case according to him. Therefore, he concluded that there was no constitutional requirement for a hearing before termination of service.