In the case of Raton Water Works Company v. City of Raton, 1918, the U.S Supreme Court dealt with a dispute over water rights between a private company and a municipality in New Mexico. The city had granted an exclusive franchise to the company for supplying water but later sought to establish its own system by condemning the company's property through eminent domain. The court ruled that while municipalities have broad powers under eminent domain, they cannot use these powers to take over assets or operations of utilities where they have previously granted an exclusive franchise without providing just compensation. This decision upheld principles of contract law and protected businesses from arbitrary government action.

In the dissenting opinion for Raton Water Works Company v. City of Raton, the justice argued that the majority's decision was a departure from established principles regarding eminent domain and compensation. The justice contended that while it is true that a municipality has the right to acquire property for public use, this does not mean it can do so without providing just compensation to its owner. In this case, he believed that fair market value should have been used as a measure of compensation rather than depreciated reproduction cost because it would provide an accurate reflection of what someone would be willing to pay for such property in an open market transaction under normal conditions. Furthermore, he disagreed with how depreciation was calculated by considering only physical deterioration and ignoring other factors like obsolescence or changes in economic conditions which could also affect value over time.