In the Northwestern Laundry v. City of Des Moines case in 1915, the U.S Supreme Court ruled on a dispute between a laundry company and the city over water rates. The city had increased its water rates, which Northwestern Laundry argued was unreasonable and discriminatory because it disproportionately affected businesses that used large amounts of water like laundries. The court held that while municipalities have the right to charge for public utilities, these charges must be reasonable and not unfairly discriminate against certain users. However, they also noted that what constitutes "reasonable" is largely up to local authorities' discretion unless there's clear abuse of power or discrimination involved. In this particular case though, no such abuse or discrimination could be proven by Northwestern Laundry so their claim was dismissed.

In the dissenting opinion for Northwestern Laundry v. City of Des Moines, Justice Holmes argued that the city's action did not constitute a taking under the Fifth Amendment. He reasoned that while it was true that Northwestern Laundry had suffered economic losses due to the city's construction of a sewer system which polluted water used by their business, this damage was incidental and not direct or intentional. The company still retained ownership and control over its property; they were just unable to use it in exactly the same way as before because of changes in surrounding conditions caused by public improvements made for general benefit. Therefore, according to Holmes, there should be no compensation required from government since such indirect harm is part of risks assumed when one chooses to live within society where everyone must endure some inconvenience or loss for common good.