In the 1919 case of Wagner et al., Partners, Doing Business Under The Name Of W. T. Wagner's Sons v. City of Covington, the U.S Supreme Court ruled in favor of the city regarding a dispute over property rights and taxation. The plaintiffs were partners operating under the name W.T Wagner’s Sons who owned land that was annexed by Covington from Kenton County in Kentucky for public use as a park without compensation to them, arguing it violated their Fourteenth Amendment rights (due process clause). However, they had previously agreed to this arrangement with an understanding that they would be exempt from certain taxes on other properties within city limits for ten years. When Covington sought to tax these properties before this period ended, they sued claiming breach of contract and violation of constitutional rights.The court held that since there was no physical taking or damage caused by public improvements on their property; hence no compensation required under eminent domain laws nor any due process violation occurred because adequate legal remedies existed at state level for alleged breach of contract.

In the dissenting opinion for Wagner et al., Partners, Doing Business Under The Name Of W. T. Wagner's Sons v. City of Covington, Justice Holmes disagreed with the majority ruling that upheld a city ordinance requiring businesses to obtain licenses and pay fees based on their gross receipts. He argued that this was an unconstitutional interference with interstate commerce as it imposed a tax on out-of-state transactions in violation of the Commerce Clause of the U.S Constitution. According to him, such regulation should be left to Congress rather than local governments because it affects national interests beyond state boundaries.