In the case of City of Memphis v. Cumberland Telephone and Telegraph Company (1910), the Supreme Court ruled in favor of the telegraph company, asserting that it had a right to maintain its telephone lines within city limits without paying additional charges imposed by local authorities. The court held that an 1885 ordinance granted this right, which was not invalidated by subsequent legislation or agreements between the parties involved. The decision clarified that such rights are contractual and cannot be unilaterally altered or revoked by one party - in this case, the city government - without mutual consent. This ruling reinforced corporate property rights against arbitrary state action while also emphasizing respect for established contracts.

In the dissenting opinion for the case City of Memphis v. Cumberland Telephone and Telegraph Company, Justice Harlan disagreed with the majority's ruling that a city ordinance could not regulate telephone rates without violating due process rights under the Fourteenth Amendment. He argued that such an interpretation undermined state sovereignty by limiting its power to protect citizens from unreasonable charges imposed by public service corporations operating within their jurisdiction. Furthermore, he contended that it was inappropriate for courts to intervene in rate-setting matters unless there was clear evidence of abuse or discrimination on part of local authorities. In his view, this approach would lead to judicial interference in administrative affairs and undermine democratic principles as it effectively transferred regulatory powers from elected officials to unelected judges.