In the 1913 U.S. Supreme Court case Russell v. Sebastian, the court examined a Los Angeles city ordinance that prohibited construction of new billboards without consent from neighboring property owners and required existing billboards to be removed after five years. The plaintiff, who owned several billboard structures in LA, argued this violated his Fourteenth Amendment rights by depriving him of his property without due process and equal protection under law. However, the Supreme Court upheld the ordinance as constitutional on grounds it was within police power for cities to regulate use of private property so as not to infringe upon public welfare or safety. The court found no violation of due process since there was reasonable notice given before enforcement action would be taken against non-compliant properties; nor did they find any violation of equal protection because all billboard owners were equally affected by these regulations.

The dissenting opinion in the case of Russell v. Sebastian disagreed with the majority's interpretation of California law and its application to this particular case. The dissent argued that under California law, a city has no power to grant an exclusive franchise for public utilities without explicit authorization from the state legislature. In this instance, there was no such authorization given by the state legislature for Los Angeles to grant an exclusive contract for gas supply within its limits. Therefore, according to Justice Holmes who wrote the dissenting opinion, any ordinance passed by Los Angeles granting such exclusivity would be void as it is beyond their powers granted by state legislation. He further stated that even if there were some ambiguity about whether or not a city could do so under general laws, those doubts should be resolved against finding such extraordinary powers exist unless they are clearly expressed in statute.