In the case of Southern Wisconsin Railway Company v. City of Madison, 1915, the Supreme Court ruled in favor of the city. The dispute arose when Southern Wisconsin Railway Company refused to pay for paving improvements made by Madison around its tracks and between them on a street where it operated its cars. The railway company argued that this was an unfair burden as they were already paying taxes and should not be required to contribute further towards public improvements. However, the court held that such requirements did not constitute double taxation or violate equal protection rights under Fourteenth Amendment because these costs were part of maintaining a franchise granted by local authorities which allowed them to operate within city limits. Therefore, requiring railroads to bear some cost for road maintenance was seen as reasonable regulation rather than unjust punishment or discrimination against railroad companies.

In the dissenting opinion for Southern Wisconsin Railway Company v. City of Madison, Justice Holmes disagreed with the majority's ruling that a city ordinance requiring street railway companies to maintain and repair streets between their tracks and two feet on either side was unconstitutional. He argued that such an obligation could be reasonably inferred from the original franchise agreement, which granted these companies special privileges in using public streets for private gain. Furthermore, he contended that this requirement did not constitute an unlawful taking of property without just compensation as it merely represented a legitimate exercise of police power aimed at ensuring public safety and welfare. According to him, since railways derive substantial benefits from their use of public roads, they should bear some responsibility for maintaining them in good condition.