In the case of Portland Railway, Light and Power Company v. Railroad Commission of Oregon (1912), the Supreme Court ruled in favor of the state commission. The dispute arose when Portland Railway was ordered by the Railroad Commission to install safety devices on its streetcars. The railway company argued that this order was an infringement upon their property rights without due process as guaranteed by the Fourteenth Amendment, asserting that it should be compensated for any additional expenses incurred from installing these devices. However, after reviewing previous rulings and considering arguments from both sides, Justice Hughes concluded that public utility companies are subject to reasonable regulation under state police power for ensuring public safety and welfare. Therefore, such regulations do not constitute a violation of constitutional rights if they are deemed necessary for protecting public interests.

In the dissenting opinion for Portland Railway, Light and Power Company v. Railroad Commission of Oregon, it was argued that the state's regulation of rates charged by a private utility company constituted an unconstitutional taking without just compensation. The justice contended that while states have broad powers to regulate businesses in the public interest, this power does not extend to setting prices so low as to deprive companies of a reasonable return on their investments. This would amount to confiscation rather than regulation. Furthermore, he pointed out that if such rate-setting were allowed, it could discourage investment in utilities and other industries subject to government oversight because investors might fear they would not be able to earn back their money due either inadequate returns or outright losses imposed by regulatory bodies.