In the case of Bowen, Secretary of Health and Human Services, et al. v. Massachusetts (1987), the Supreme Court ruled in favor of Massachusetts by a 5-4 vote. The dispute arose when the federal government reduced its Medicaid reimbursement to the state, arguing that certain hospital services were overpriced. The state disagreed with this assessment and sued for recovery under the Administrative Procedure Act (APA). The central issue was whether such disputes could be resolved through suits in federal court or if they had to go through an administrative process first as argued by HHS Secretary Otis R. Bowen's legal team. The majority opinion held that states have a right to seek judicial review directly under APA without exhausting all administrative remedies first because it is not always feasible or efficient for them to do so especially when time-sensitive funding matters are involved which can significantly impact public health services delivery at local levels. This ruling reinforced states' rights against unilateral financial decisions made by federal agencies while also emphasizing on necessity for prompt resolution of fiscal disagreements between different tiers of governance within U.S.'s complex intergovernmental system.

In the dissenting opinion for Bowen, Secretary of Health and Human Services, et al. v. Massachusetts (1987), Justice Antonin Scalia argued that the Court had erred in its interpretation of the Administrative Procedure Act (APA). He contended that it was not Congress's intent to allow federal courts to review agency decisions regarding grant-in-aid programs under APA provisions. Instead, he believed such matters should be handled by an administrative hearing process within each respective agency before any judicial involvement occurs. Furthermore, he disagreed with the majority's view on sovereign immunity and asserted that states could not sue federal agencies for monetary relief without explicit congressional authorization. In his view, allowing such lawsuits would disrupt governmental functions by encouraging litigation over negotiation in disputes between state and federal governments.