In the case of Avco Corp. v. Aero Lodge No. 735, International Association of Machinists & Aerospace Workers et al., the U.S Supreme Court was asked to determine whether a federal court could issue an injunction against a labor strike when there was already an existing collective bargaining agreement in place that included a no-strike clause and arbitration provisions for disputes resolution. The dispute arose from disagreements over wage rates between Avco Corporation and its employees represented by Aero Lodge No. 735 union, leading to strikes despite the existing agreement prohibiting such actions without first exhausting arbitration procedures outlined in their contract. The District Court initially granted an injunction against the strike but this decision was reversed by the Sixth Circuit Appeals Court which held that jurisdiction belonged with National Labor Relations Board (NLRB) under Norris-LaGuardia Act's anti-injunction provisions. However, upon reaching Supreme Court, it ruled in favor of Avco Corp., holding that Section 301(a) of Labor Management Relations Act preempted state law on contractual obligations and allowed federal courts jurisdiction to enforce collective bargaining agreements including issuing injunctions where necessary even if they involved labor disputes typically within NLRB's purview.

In the dissenting opinion for AVCO Corp. v. Aero Lodge No. 735, Justice Douglas argued that federal courts should not have jurisdiction over labor disputes unless they involve a "substantial question of federal law." He contended that this case did not meet such criteria and therefore should be handled by state courts as it was essentially a breach-of-contract dispute between private parties. Furthermore, he expressed concern about the potential implications of allowing federal court intervention in all cases where collective bargaining agreements are involved, suggesting it could lead to an unnecessary expansion of federal power into areas traditionally governed by state law.