The Portsmouth Harbor Land & Hotel Company v. United States case in 1922 revolved around the issue of land condemnation by the U.S government for public use, specifically for fortification purposes. The plaintiffs, Portsmouth Harbor Land and Hotel Company along with others, owned a piece of land that was seized by the federal government under its power of eminent domain. They argued that they were not adequately compensated for their property as required by the Fifth Amendment to the Constitution which states that private property cannot be taken without just compensation. However, it was ruled against them on grounds that fair market value had been paid based on an assessment at time of taking possession rather than when proceedings began or ended. This ruling set a precedent regarding how 'just compensation' is determined in cases where private lands are seized under eminent domain.

In the dissenting opinion for Portsmouth Harbor Land & Hotel Company v. United States, Justice Holmes disagreed with the majority's decision to award compensation to the plaintiffs whose land was devalued due to government action. He argued that while it is true that a decrease in property value can be considered a form of 'taking', not all decreases should warrant compensation under the Fifth Amendment. According to him, if every change in general regulations which adversely affects individual property values were deemed as 'takings', then it would become impossible for any government regulation or legislation without paying large sums of money in damages. This could potentially cripple governmental functions and impede progress on public works projects designed for common good. Therefore, he believed that only direct physical invasion or appropriation by the government should qualify as compensable takings under constitutional law.