In the case of Murray, doing business as The Pocatello Water Company, v. City of Pocatello (1912), the U.S Supreme Court ruled in favor of the city. The dispute arose when Mr. Murray's water company was denied a renewal for its 20-year franchise to supply water to Pocatello, Idaho and instead, the city decided to establish its own municipal water system. Mr. Murray sued on grounds that this action violated his Fourteenth Amendment rights by depriving him of property without due process and equal protection under law since other franchises were renewed while his was not. The court held that there was no violation because a municipality has discretion over whether or not it renews such contracts based on what it deems best for public interest; thus they can choose to operate their own utilities if desired without infringing upon constitutional rights.

In the dissenting opinion for Murray v. City of Pocatello, Justice Holmes disagreed with the majority's decision to uphold a lower court ruling that allowed the city of Pocatello to take over a private water company without providing just compensation. He argued that this violated the Fourteenth Amendment’s due process clause, which prohibits states from depriving any person or entity of property without due process of law. Holmes contended that when a public utility is taken by eminent domain, it should be valued not merely as physical property but also in terms of its earning capacity and potential future profits. This would ensure fair compensation for owners who have invested time and resources into building their businesses. The justice believed that failing to consider these factors resulted in an unjust seizure by the state.