Osborne v. Mobile was a United States Supreme Court case that was decided in 1872. The case involved a dispute between the City of Mobile, Alabama and the Mobile and Ohio Railroad Company. The City of Mobile had granted the railroad company a franchise to build a railroad through the city, but the company had failed to build the railroad within the time frame specified in the franchise. The City of Mobile then sought to revoke the franchise and the railroad company sued to prevent the revocation. The Supreme Court held that the City of Mobile had the right to revoke the franchise, as the railroad company had failed to fulfill its obligations under the franchise agreement. The Court also held that the City of Mobile was not obligated to pay damages to the railroad company for the revocation of the franchise. The Court reasoned that the City of Mobile had acted in good faith and had not acted in a manner that would have caused the railroad company to suffer any damages. The decision in Osborne v. Mobile established that a municipality has the right to revoke a franchise if the franchisee fails to fulfill its obligations under the franchise agreement. The decision also established that a municipality is not liable for damages if it revokes a franchise in good faith.

In Osborne v. Mobile, the Supreme Court was asked to decide whether a state court had jurisdiction over an action brought by a citizen of one state against another in which the amount in controversy exceeded $500. The majority opinion held that it did not have such jurisdiction and reversed the judgment of the lower court. However, Justice Field dissented from this decision arguing that under Article III Section 2 of the Constitution, Congress has granted federal courts exclusive original jurisdiction over all cases where citizens of different states are involved regardless of how much is at stake. He further argued that if states were allowed to exercise their own authority on matters involving citizens from other states then there would be no uniformity or consistency between them and chaos would ensue as each state could make its own rules with regards to interstate disputes. Therefore, he concluded that only federal courts should have original jurisdiction when two parties from different states are involved regardless of how much money is at stake in order for justice to be served uniformly across all jurisdictions within our nation's borders.