In the case of New York ex rel. Woodhaven Gas Light Company v. Public Service Commission, 1925, the Supreme Court ruled on whether a state could regulate utility rates without violating due process rights under the Fourteenth Amendment. The Woodhaven Gas Light Company challenged an order from New York's Public Service Commission that reduced its gas prices by nearly half, arguing it was confiscatory and violated their constitutional rights to due process and equal protection. However, the court upheld the commission's decision stating that states have broad powers to regulate public utilities in order to protect consumers' interests against unreasonable or excessive charges as long as they do not interfere with interstate commerce or violate other federal laws. The court also noted that while companies are entitled to a fair return on their investments, this does not guarantee them profits at levels they might achieve in unregulated markets.

In the dissenting opinion for New York ex rel. Woodhaven Gas Light Company v. Public Service Commission, Justice McReynolds argued that the majority's decision was a violation of due process rights under the Fourteenth Amendment. He contended that by allowing state regulation to arbitrarily reduce rates without considering whether it would result in confiscation or not, they were infringing upon property rights protected by the Constitution. Furthermore, he expressed concern over how this ruling could potentially impact other industries and businesses if left unchecked. In his view, such an approach could lead to unjust outcomes where companies are forced into insolvency because their rates have been reduced too drastically through regulatory action without proper consideration of its effects on their financial viability.