In the case of New Orleans Waterworks Company v. Louisiana, 1901, the U.S. Supreme Court was tasked with determining whether a state law that required water companies to provide free service to public institutions violated the Contract Clause of the Constitution. The New Orleans Waterworks Company had entered into a contract in 1833 which stipulated they would supply water for free to public buildings and fire hydrants in exchange for exclusive rights to operate within certain city limits. However, when new legislation passed requiring further provision of services without compensation, they argued this constituted an impairment of their contractual obligations under Article I Section 10 (the Contract Clause) of the Constitution. The court ruled against them stating that while contracts are generally protected from legislative interference by states under this clause, there is an exception when it comes to fulfilling police powers related duties such as protecting health and safety or promoting general welfare; these responsibilities cannot be contracted away by any government entity because they're inherent sovereign powers always subjecting private rights including those based on contracts.

In the dissenting opinion for New Orleans Waterworks Company v. Louisiana, it was argued that the majority's decision to uphold a state law allowing New Orleans to take over a privately-owned water company without compensation violated the Fourteenth Amendment's due process clause. The dissenting justices believed that this action constituted an unlawful seizure of private property by the government and infringed upon contract rights. They contended that while states have broad powers under their police authority, these powers do not extend to seizing private property without just compensation or nullifying contracts between private parties. Furthermore, they disagreed with the majority's interpretation of previous court decisions on similar issues and maintained that those cases did not support such extensive use of state power at the expense of individual rights.