In the case of State of Missouri ex rel. Southwestern Bell Telephone Company v. Public Service Commission of Missouri, et al., 1922, the U.S Supreme Court ruled in favor of Southwestern Bell Telephone Company (SBTC). The company had challenged a decision by the Public Service Commission that prevented it from increasing its rates for telephone services without prior approval. SBTC argued this was unconstitutional as it violated their rights under the Fourteenth Amendment's due process clause and interfered with interstate commerce. The court agreed with SBTC stating that while states have power to control utilities within their borders, they cannot interfere when such utilities are used for interstate communication or commerce which falls under federal jurisdiction.

In the dissenting opinion for the case of State of Missouri ex rel. Southwestern Bell Telephone Company v. Public Service Commission of Missouri, Justice Holmes argued that the court should not have interfered with the decision made by a state commission regarding rates set for public utilities. He believed that it was not within their jurisdiction to do so and that such matters should be left to local authorities who are more familiar with specific conditions and needs in their areas. Furthermore, he expressed concern over setting a precedent where federal courts could intervene in state decisions about utility rates without clear evidence of constitutional violations or other serious legal issues at stake.