The Southern Iowa Electric Company v. City of Chariton, Iowa case in 1920 revolved around the issue of a city's right to establish and operate its own electric utility service. The Southern Iowa Electric Company had been providing electricity to the city under a franchise agreement that was set to expire. Before it did, however, the city decided to create its own municipal power plant and passed an ordinance for this purpose which included provisions for issuing bonds and setting rates. The company sued on grounds that such actions were unconstitutional as they interfered with their contract rights and amounted to taking property without due process or just compensation. However, the Supreme Court ruled in favor of Chariton City stating that there was no violation of constitutional rights because municipalities have inherent powers under state law not only regulate but also compete with private utilities within their jurisdictional boundaries if authorized by state legislation. Furthermore, it held that while franchises are contracts protected from impairment by states under Contract Clause (Article I Section 10), they do not grant exclusive privileges unless explicitly stated so; hence no infringement occurred here since exclusivity wasn't part of original agreement between company & city.

The dissenting opinion in the Southern Iowa Electric Company v. City of Chariton, Iowa case argued that the majority's decision to uphold a city ordinance which granted exclusive rights to one company for providing electricity was incorrect. The dissenters believed this violated both state law and the Fourteenth Amendment's Equal Protection Clause. They contended that granting such an exclusive privilege without any clear public benefit or necessity was discriminatory and arbitrary, thus violating equal protection principles. Furthermore, they disagreed with the majority’s interpretation of state law as permitting such monopolistic arrangements by municipalities; instead arguing that it should be read as prohibiting them unless explicitly authorized by statute.