In the case of Ohio Public Service Company v. Ohio Ex Rel. Fritz, 1926, the Supreme Court was asked to determine whether a state could regulate and limit rates charged by private utility companies without violating constitutional protections against confiscation of property without due process. The Ohio Public Service Company challenged an order from the State's Public Utilities Commission that reduced its gas rates, arguing it would not allow them to earn a reasonable return on their investment and thus constituted as unconstitutional confiscation of property. The Supreme Court upheld the rate reduction order in a decision that affirmed states' rights to regulate utilities for public benefit while also protecting businesses from unreasonable regulation. The court held that while a business has legitimate interest in earning profits on investments made under government franchise, this does not prevent government from adjusting returns so long as they are not so low as to be confiscatory or violate principles of fairness.

In the dissenting opinion for Ohio Public Service Company v. Ohio Ex Rel. Fritz, Justice Stone argued that the majority's decision to uphold a state law requiring utilities to provide service at uniform rates was an unconstitutional violation of due process rights under the Fourteenth Amendment. He contended that this ruling effectively allowed states to confiscate private property without just compensation by forcing utility companies to operate at a loss in certain areas while making profits in others. Furthermore, he believed it was not within the purview of courts or legislatures to determine what constitutes "reasonable" business practices and suggested such decisions should be left up to market forces instead.