In the case of Newton, Attorney General of the State of New York, et al. v. New York & Queens Gas Company in 1921, the Supreme Court ruled on a dispute involving gas rates set by state law and whether they were confiscatory and thus violated due process rights under the Fourteenth Amendment. The New York & Queens Gas Company argued that a rate reduction imposed by legislation was so severe it amounted to property seizure without just compensation. However, after examining evidence regarding company value and profits under these new rates, the court found no constitutional violation had occurred as there was no clear proof that enforcing such laws would be unjust or unreasonable for this utility company's operations or its ability to make fair returns on investments.

In the dissenting opinion for Newton v. New York & Queens Gas Company, Justice Holmes disagreed with the majority's decision to invalidate a law that allowed gas companies to charge higher rates in certain areas of New York. He argued that there was no constitutional issue at stake and believed it was within the state's power to regulate utilities as they saw fit. Holmes felt that if a company did not want to comply with these regulations, they could simply choose not to do business in those areas. He also pointed out inconsistencies in how the Court had previously ruled on similar cases involving rate regulation, suggesting this demonstrated an arbitrary application of judicial review rather than adherence to established legal principles.