[2] The Court defined the constitutional limits of governmental power to set railroad and utility rates by stating that regulated industries have the right to a "fair return".

[3][4] The decision in Smyth v. Ames was unanimous and Justice John M. Harlan delivered the opinion of the Court in writing.

However, in the Munn case, the Court ruled that all property was held subject to legislative regulation if it was "affected with a public interest".

The court found that it is not enough to show a tariff – even if the tax is in the public interest – still leaves a company enough money to pay operating expenses and stock dividends.

[12] The ruling was overturned in the 1944 case of Federal Power Commission v. Hope Natural Gas Co.[3][4] The named plaintiff in the case, Nebraska Attorney General Constantine Joseph Smyth, later served as Chief Justice of the Court of Appeals of the District of Columbia.