In the case of Owensboro v. Owensboro Waterworks Co., 1903, the U.S Supreme Court was tasked with determining whether a city had the right to purchase a water company's property against its will for public use under eminent domain laws. The City of Owensboro, Kentucky sought to acquire and operate the local waterworks system owned by the private corporation, Owensboro Waterworks Company. The latter resisted this move arguing that their charter contract protected them from such action without their consent. However, upon review of both state law and constitutional provisions regarding eminent domain rights in relation to private corporations serving public needs, it was determined that no such protection existed within these documents or legal precedents. Therefore, ruling in favor of the City of Owensboro on grounds that municipalities have inherent powers under eminent domain laws to take over properties for public utilities even if they are privately owned; provided just compensation is given as per Fifth Amendment protections.

In the dissenting opinion for Owensboro v. Owensboro Waterworks Co., it was argued that the city of Owensboro had not violated any contract with the water company when they reduced water rates, as there was no explicit agreement about maintaining specific rates in their original contract. The justice believed that a municipality has an inherent right to regulate public utilities and protect its citizens from excessive charges, even if this means altering previously agreed upon terms. They contended that such regulation does not constitute impairment of contracts but is rather an exercise of police power by local governments to ensure fair pricing for essential services like water supply. Therefore, they disagreed with the majority's decision which ruled in favor of the Waterworks Company on grounds of contractual violation.