In the 1935 case of Acker et al. v. United States et al., the Supreme Court ruled on a matter concerning federal income tax law and its application to state municipal bonds. The appellants, who were bondholders, argued that their interest from Alabama highway bonds was exempt from federal taxation under Section 22(b)(4) of the Revenue Act of 1928 because they believed it fell into the category of "securities issued by…a State." However, this argument was rejected by both lower courts and eventually by the Supreme Court as well. The court held that while states have immunity against direct taxes imposed by Congress, this does not extend to private citizens or corporations within those states even if they are receiving income from state securities. Therefore, despite being derived from state-issued securities, such income is still subject to federal taxation under existing laws at that time. This decision underscored an important principle in U.S constitutional law: although states themselves enjoy certain immunities under our system of dual sovereignty (federalism), these protections do not necessarily shield private parties who engage in commerce with them.

In the dissenting opinion for ACKER et al. v. UNITED STATES et al., Justice Stone argued that the majority's decision was inconsistent with previous rulings and principles of federalism, which respect states' rights to regulate their own internal affairs without interference from the federal government. He contended that Alabama had a legitimate interest in regulating its liquor industry and preventing illegal sales, even if it meant imposing restrictions on interstate commerce. According to him, Congress did not intend to preempt state laws when it passed the Webb-Kenyon Act or Wilson Act; rather, these acts were designed to support state efforts against alcohol trafficking by closing loopholes in existing legislation. Therefore, he believed that Alabama's law should be upheld as a valid exercise of its police powers under the 21st Amendment.