In Ballard v. Searls, the Supreme Court of the United States held that a state court’s decision to deny a motion to set aside a default judgment was not reviewable by the federal courts. The case arose when the plaintiff, Ballard, sued the defendant, Searls, in a state court for breach of contract. Searls failed to appear in court and a default judgment was entered against him. Searls then filed a motion to set aside the default judgment, which was denied by the state court. Searls then appealed to the federal court, arguing that the state court’s decision was wrong. The Supreme Court held that the federal court did not have jurisdiction to review the state court’s decision, as the state court’s decision was a matter of state law and not a federal question. The Court also held that the state court’s decision was not a final judgment, as it was not a final determination of the rights of the parties. As such, the Supreme Court held that the federal court did not have jurisdiction to review the state court’s decision.

In the dissenting opinion of Ballard v. Searls, Justice Frankfurter argued that the majority’s decision was an unwarranted extension of federal power and a violation of state sovereignty. He believed that Congress had not intended to expand its powers beyond those enumerated in Article I, Section 8 when it passed the National Bankruptcy Act (NBA). Furthermore, he argued that if Congress wanted to extend its authority over bankruptcy proceedings involving non-federal debtors then it should have done so explicitly in the NBA or through subsequent legislation. In addition, Justice Frankfurter asserted that allowing states to regulate their own bankruptcies would be more beneficial than having a single set of rules imposed by federal law as this would allow for greater flexibility and diversity among different jurisdictions. Finally, he noted how such an expansion could lead to further intrusions into areas traditionally reserved for state control which could ultimately undermine our system of dual sovereignty between federal and state governments.