In the case of Milwaukee Electric Railway Light Company v. State of Wisconsin ex rel. City of Milwaukee (1919), the U.S Supreme Court was asked to determine whether a state had the authority to regulate rates charged by public utilities, even when those utilities were owned and operated by private entities. The court ruled in favor of the state, asserting that it did indeed have such power under its police powers doctrine. This decision upheld an order from Wisconsin's Railroad Commission which reduced streetcar fares in Milwaukee from 7 cents to 6 cents per ride after determining that higher rates were unjust and unreasonable for consumers. The ruling affirmed states' rights to protect their citizens against unfair practices by privately-owned public service corporations operating within their borders.

The dissenting opinion in the case of Milwaukee Electric Railway Light Company v. State of Wisconsin Ex Rel. City of Milwaukee argued that the majority's decision was a departure from established precedent regarding state regulation and control over public utilities. The dissent contended that states have traditionally held broad powers to regulate public utilities, including setting rates, as these entities serve vital public interests and are often granted special privileges or monopolies by the state. It further asserted that judicial review should be limited to ensuring such regulations do not violate constitutional protections against confiscatory rates, rather than delving into questions about reasonableness or fairness which are better left to legislative bodies with more expertise in economic matters.