The U.S. Supreme Court case Smith et al., Constituting the Illinois Commerce Commission, et al. v. Illinois Bell Telephone Company in 1930 revolved around a dispute over telephone rates set by the Illinois Commerce Commission (ICC). The ICC had ordered a reduction in rates charged by the Illinois Bell Telephone Company, which was challenged as unconstitutional on grounds that it deprived the company of its property without due process and denied it an opportunity to earn a fair return on its investment. However, the Supreme Court upheld ICC's decision stating that there was no constitutional right guaranteeing utility companies a specific rate of return on their investments and affirmed state regulatory authority over utilities' operations within their jurisdiction. It ruled that while corporations are entitled to reasonable returns on their investments, they are not guaranteed profits at expense of public interest.

In the dissenting opinion for Smith et al., Constituting The Illinois Commerce Commission, et al. v. Illinois Bell Telephone Company, Justice Stone argued that the majority's decision to overturn a state regulatory commission's rate-setting was an overreach of judicial power. He believed that courts should not interfere with administrative decisions unless there is clear evidence of unconstitutionality or illegality. In this case, he saw no such evidence and felt that the court had substituted its judgment for that of experts in telephone service regulation without sufficient cause. Furthermore, he disagreed with the majority's interpretation of "fair value" as it pertains to rate-making and suggested their approach could lead to unjust results by ignoring current economic conditions and market values in favor of historical cost data.