Munn v. Illinois was a landmark Supreme Court case that established the power of the state to regulate private businesses. The case involved a grain storage facility owned by Charles Munn and his brother, who were sued by the state of Illinois for charging excessive storage fees. The state argued that the fees were a form of monopoly and violated the state's police power to regulate private businesses. The Supreme Court agreed, ruling that the state had the right to regulate private businesses in order to protect the public interest. The Court also held that the state's regulation of private businesses was a valid exercise of its police power, and that the state had the right to set reasonable limits on the fees charged by private businesses. The decision in Munn v. Illinois established the principle that the state has the power to regulate private businesses in order to protect the public interest. This decision has been cited in numerous cases since, and has been used to uphold the power of the state to regulate private businesses.

In Munn v. Illinois, the Supreme Court was tasked with determining whether a state legislature had the power to regulate grain warehouses and their rates of storage. The majority opinion held that it did have such authority, as long as those regulations were reasonable in nature. Justice Field dissented from this ruling on the basis that while states may be able to pass laws regulating certain industries for public safety or welfare reasons, they cannot do so if it interferes with private property rights without providing just compensation for any losses incurred by individuals due to these regulations. He argued that since grain warehouses are private businesses and not public utilities, they should not be subject to government regulation unless there is some form of compensation provided for any losses suffered by them due to said regulation. Thus he concluded that the law in question violated both federal and state constitutional protections against taking private property without just compensation and should therefore be declared unconstitutional.