In the case of Newton, as Attorney General of the State of New York, et al., v. Consolidated Gas Company of New York in 1923, the Supreme Court ruled on a dispute over gas pricing regulations. The state had passed legislation to cap gas prices at $1 per thousand cubic feet and appointed a commission to oversee compliance with this law. However, Consolidated Gas argued that this price was too low and would prevent them from earning a fair return on their investment. They claimed it violated their Fourteenth Amendment rights by depriving them of property without due process or just compensation for public use (eminent domain). The court sided with the state's right to regulate utilities for public benefit but also acknowledged that such regulation must allow companies an opportunity to earn reasonable profits; otherwise it could be considered confiscatory and unconstitutional under eminent domain principles. Therefore, they remanded back down lower courts for further proceedings consistent with these guidelines.

In the dissenting opinion for Newton v. Consolidated Gas Company of New York, Justice Oliver Wendell Holmes Jr., joined by Justices Brandeis and Butler, argued that the majority's decision to strike down a state law regulating gas prices was an overreach of judicial power. He contended that it is not within the purview of courts to determine whether or not a business can operate profitably under certain rates set by legislation; rather, this should be left up to legislative bodies themselves. The justices further stated their belief that if businesses find such regulations unprofitable or untenable, they have every right to cease operations but do not have grounds for challenging these laws in court on constitutional bases. They maintained that unless there is clear evidence demonstrating confiscation as opposed to mere reduction in profits due to regulation, courts should refrain from interfering with legislative decisions regarding rate setting.