In the case of Spring Valley Water Company v. City and County of San Francisco et al., 1917, the Supreme Court was asked to determine whether or not a municipality had the right to take over a privately-owned water company through eminent domain. The Spring Valley Water Company argued that it was unconstitutional for San Francisco to seize its property without just compensation. However, the court ruled in favor of San Francisco, stating that under California law and with appropriate compensation provided by city officials, municipalities have every right to acquire private utilities if they believe it is necessary for public use. This decision set an important precedent regarding municipal rights and eminent domain laws.

In the dissenting opinion for Spring Valley Water Company v. City and County of San Francisco, it was argued that the majority's decision to allow San Francisco to set rates for water services provided by a private company violated constitutional protections against government interference in private contracts. The dissenters believed that this ruling effectively allowed the city to determine its own costs, which could lead to unfair pricing and potential abuse of power. They also expressed concern about the implications this case might have on future disputes between public entities and privately-owned utilities, arguing that it could discourage investment in such industries due to fears of governmental overreach.