In the case of Phoenix Railway Company v. Geary et al., Corporation Commission of Arizona, 1915, the Supreme Court ruled on a dispute between a railway company and the state regulatory commission. The Phoenix Railway Company had been ordered by Arizona's Corporation Commission to install safety devices at certain crossings in response to public complaints about dangerous conditions. The railway company argued that this order was unconstitutional because it constituted an unlawful taking of property without just compensation under the Fifth Amendment. However, the Supreme Court disagreed with this argument and upheld the order from Arizona's Corporation Commission as constitutional. In its decision, it stated that states have broad power to regulate businesses for public safety purposes even if these regulations impose costs on those businesses.

In the dissenting opinion for Phoenix Railway Company v. Geary et al., Corporation Commission of Arizona, Justice Holmes disagreed with the majority's decision to uphold a state law that required railroads to provide free transportation for members of the state railroad commission and their staff. He argued that this requirement was an unconstitutional taking of property without just compensation under the Fifth Amendment. According to Justice Holmes, although states have broad powers to regulate industries within their borders, they cannot compel companies to provide services or goods without payment in return. He believed that such actions were akin to forced labor and violated fundamental principles of fairness and justice enshrined in the Constitution.