In the case of Adams, Receiver v. Nagle et al., 1937, the U.S. Supreme Court was tasked with determining whether a receiver in equity appointed by a federal court could be sued without leave from that court in state courts for acts done within his authority as receiver and within the scope of his employment. The defendants were employees who had been discharged by the plaintiff (the receiver) and sought compensation under Alabama's labor laws through state courts. The Supreme Court held that while receivers are not immune to suits arising from their management, they cannot be sued without permission from appointing courts if such actions interfere with administration of properties entrusted to them or embarrass them in discharging their official duties. Therefore, it ruled that no suit can proceed against a federally-appointed receiver without leave from federal court first being obtained.

In the dissenting opinion for Adams v. Nagle, Justice Cardozo disagreed with the majority's interpretation of Section 2(a) of the Bankruptcy Act. He argued that a receiver in bankruptcy should not be allowed to recover payments made by an insolvent debtor during insolvency if those payments were made in good faith and without knowledge of insolvency. According to him, such an interpretation would discourage creditors from accepting payment from struggling businesses out of fear they might later have to return it, which could exacerbate financial difficulties for companies on the brink of bankruptcy. Furthermore, he contended that this ruling contradicted previous court decisions and disrupted established commercial practices based on them.