In the case of Nebbia v. New York in 1933, the U.S Supreme Court ruled that a state has the right to regulate prices of commodities under its police power if it serves public interest and is not discriminatory or arbitrary. The case arose when Leo Nebbia, a grocery store owner in Rochester, New York was convicted for selling milk below the minimum price set by a Milk Control Board established during Great Depression to stabilize milk market and protect farmers and consumers. He appealed on grounds that this violated his Fourteenth Amendment rights as it interfered with freedom of contract without due process of law. However, Justice Owen Roberts writing for majority held that there was no closed class or category of businesses affected with public interest; thus regulation could extend beyond utilities or industries having definite relation to public service if circumstances warranted such intervention.

In the dissenting opinion for Nebbia v. New York, Justice James Clark McReynolds argued that the law in question, which allowed New York to set minimum prices for milk, was a violation of individual liberty and property rights protected by the Fourteenth Amendment. He contended that there was no emergency justifying such regulation and that it interfered with free competition. Furthermore, he believed this case represented an overreach of state power into private economic affairs without sufficient justification or public interest at stake. The justice warned against allowing states to control pricing as it could lead to arbitrary price fixing and potentially harm consumers more than protect them.