In the 1924 case of People of the State of New York ex rel. Rosevale Realty Company v. Kleinert, Superintendent, et al., the U.S Supreme Court dealt with a dispute over property rights and taxation. The Rosevale Realty Company owned land in New York that was being used by a railroad company under an agreement which stated that if any part of it were to be taken for public use, compensation would be paid to both parties according to their respective interests. When some parts were indeed taken for public use and subsequently taxed as real estate belonging solely to the railroad company, Rosevale contested this on grounds they still held interest in those lands and should not bear tax liability alone. However, upon reaching the Supreme Court after lower courts' decisions favoring Kleinert (Superintendent), it ruled against Rosevale's claims stating that since they had transferred possession and control over these lands without retaining any substantial right or power over them except receiving rent payments from railway operations thereon; hence such transfer constituted complete divestiture making them no longer liable for taxes levied.

In the dissenting opinion for People of the State of New York ex rel. Rosevale Realty Company v. Kleinert, Superintendent, et al., Justice McReynolds disagreed with the majority's decision to uphold a state law that allowed tenants who were unable to pay their rent due to financial hardship caused by World War I and its aftermath to remain in their homes without fear of eviction. He argued that this legislation was unconstitutional because it violated property owners' rights under the Fourteenth Amendment, which guarantees all citizens equal protection under the law. According to Justice McReynolds, allowing financially distressed tenants to stay in their rented properties without paying rent unfairly shifted economic burdens from one group (tenants) onto another group (landlords). This constituted an arbitrary use of government power and thus infringed on landlords' constitutional rights.