In the case of New Orleans City and Lake Railroad Company v. New Orleans (1891), the Supreme Court ruled in favor of the city, upholding its right to regulate fares on a privately owned railroad that operated within its boundaries. The court found that while states could not interfere with interstate commerce, they retained their police powers over local matters such as public transportation. This decision affirmed municipal authority over local businesses providing essential services and reinforced principles of federalism by delineating between state and national jurisdictional spheres.

In the dissenting opinion for New Orleans City and Lake Railroad Company v. New Orleans, Justice Lamar disagreed with the majority's ruling that a city ordinance requiring street railway companies to pave and maintain the areas between their tracks and two feet beyond was constitutional. He argued that this requirement constituted an unlawful taking of private property without just compensation, violating the Fifth Amendment. According to him, while cities have broad powers to regulate businesses in public interest, they cannot impose undue burdens on specific entities under guise of regulation or require them to bear costs related solely to public use of streets. He contended that such paving is part of general road maintenance which should be funded by all taxpayers rather than imposed upon individual corporations operating within those roads.