In the case of Allied Chemical Corp. et al. v. Daiflon, Inc., 1980, the Supreme Court ruled on a dispute over jurisdiction in an antitrust lawsuit. The original suit was filed by Daiflon, Inc., and others against Allied Chemical Corp., alleging that they had conspired to monopolize and restrain trade in the industrial diamond market violating federal antitrust laws. The District Court issued a stay order pending resolution of related criminal proceedings against some defendants but refused to issue writs of mandamus requested by petitioners (Allied) which would have directed court's vacation of its stay orders or alternatively ordered it to proceed with pretrial activities during pendency of criminal proceedings. The Supreme Court held that under these circumstances appellate courts do not have discretion to issue writs except under extraordinary conditions where denial would result in damage and hardship which could not be effectively remedied after final judgment has been rendered following trial on merits; such conditions were found lacking here.

In the dissenting opinion for Allied Chemical Corp. et al. v. Daiflon, Inc., Justice William Rehnquist argued that the majority's decision to allow federal courts to stay state court proceedings in cases involving removal jurisdiction was a departure from traditional principles of federalism and comity between state and federal courts. He contended that this ruling would lead to an unnecessary expansion of federal judicial power at the expense of states' rights, undermining their ability to adjudicate matters within their own jurisdictions independently. Furthermore, he expressed concern about potential abuse by litigants seeking strategic advantages through forum shopping or delay tactics via invoking such stays inappropriately.