In the case of Railroad Commission of California et al. v. Pacific Gas & Electric Co., 1937, the Supreme Court ruled in favor of Pacific Gas & Electric Co (PG&E). The dispute arose when the state's Railroad Commission ordered PG&E to provide natural gas service to a new community at rates that were lower than what PG&E considered reasonable and fair. The company argued that this violated their constitutional rights under the Fourteenth Amendment, which prohibits states from depriving any person or entity "of life, liberty, or property without due process of law." In its decision, the court held that while states do have broad powers to regulate public utilities for purposes such as preventing discrimination and ensuring adequate service quality and coverage; they cannot force a utility company to operate at a loss by setting unreasonably low rates. This would constitute an unlawful taking of property without just compensation.

The dissenting opinion in the case of Railroad Commission of California et al. v. Pacific Gas & Electric Co., argued that the majority's decision to uphold a state law requiring utilities to obtain approval before selling assets was an overreach and violated constitutional protections against taking property without due process. The dissenters believed that this ruling gave too much power to regulatory bodies, potentially stifering economic growth and innovation by creating unnecessary bureaucratic hurdles for businesses seeking to sell or transfer their assets. They also expressed concerns about potential abuses of this power, arguing that it could be used arbitrarily or capriciously by regulators with little oversight or accountability. Furthermore, they contended that such regulations should be left up to individual states rather than being imposed at a federal level, respecting principles of federalism and state sovereignty.