In the case of Pacific Gas & Electric Company v. City and County of San Francisco, 1923, the U.S Supreme Court ruled in favor of Pacific Gas & Electric (PG&E). The dispute arose when San Francisco attempted to enforce a provision that required PG&E to obtain approval from city officials before making any changes or repairs to its gas infrastructure within city limits. The court held that this was an unreasonable interference with interstate commerce as it could potentially disrupt service not only within San Francisco but also in other states where PG&E operated. This decision reinforced the principle that local governments cannot impose regulations on businesses operating across state lines if those regulations interfere with interstate commerce.

In the dissenting opinion for Pacific Gas & Electric Company v. City and County of San Francisco, Justice Holmes argued that the majority's decision was inconsistent with previous rulings on similar issues. He contended that a city should be allowed to operate its own utility services without interference from private companies, as long as it does not infringe upon their rights or property. In this case, he believed that San Francisco had acted within its constitutional powers by attempting to establish a municipal power plant and did not violate any rights of Pacific Gas & Electric Company. Furthermore, he disagreed with the majority's interpretation of 'public use,' arguing instead for a broader definition which would include public ownership and operation of utilities. He also criticized the court’s reliance on expert testimony in determining whether there was an actual need for additional electricity supply in San Francisco.