In the case of Seattle Gas Co. v. Seattle in 1933, the Supreme Court ruled on a dispute between a gas company and the city of Seattle over rates for gas services. The City had enacted an ordinance establishing maximum rates that could be charged by the company, which was challenged as being confiscatory and thus violating constitutional rights to due process under Fourteenth Amendment. The Supreme Court held that while municipalities have power to regulate utility rates, they cannot set them so low as to be confiscatory - this would amount to taking property without just compensation or due process of law. However, it also stated that courts should not interfere with such regulatory powers unless there is clear infringement upon constitutional rights; mere errors or mistakes are insufficient grounds for judicial interference.

In the dissenting opinion for Seattle Gas Co. v. Seattle, it was argued that the city of Seattle did not have the right to regulate and fix gas rates without providing a fair return on investment for the company. The justice believed that this action violated due process rights under the Fourteenth Amendment by depriving property owners (in this case, shareholders of a private corporation) of their property without just compensation or due process of law. They contended that while cities do have some regulatory powers in relation to utilities, these should not extend so far as to effectively confiscate private property or destroy its value through regulation - which they felt was happening here with excessively low rate caps being imposed on what could be charged for gas services.