In the case of Burlington Northern Railroad Co. v. Woods et al., 1986, the United States Supreme Court was asked to determine whether a state rule allowing for an automatic penalty against unsuccessful appellants in civil cases was preempted by federal law. The Alabama courts had imposed a 10% penalty on Burlington Northern when it unsuccessfully appealed a judgment in favor of Woods and others, as per Alabama's procedural rules. However, Burlington argued that this state rule conflicted with Federal Rule of Appellate Procedure 38 which only allows penalties for frivolous appeals at the court’s discretion. The Supreme Court ruled in favor of Burlington Northern, holding that where there is direct collision between federal and state law - such as here with regard to appellate penalties - federal law takes precedence under the Supremacy Clause of Constitution. Therefore, they found that Alabama's mandatory penalty provision could not be applied because it directly contradicted discretionary provisions within Federal Rule 38.

In the dissenting opinion for Burlington Northern Railroad Co. v. Woods, Justice White argued that federal law should not supersede state law in matters of civil procedure unless there is a direct conflict between them. He believed that the majority's decision to apply Federal Rule of Appellate Procedure 38 (which allows courts to award damages against appellants who bring frivolous appeals) over Alabama's rule was unnecessary and infringed upon states' rights to govern their own judicial systems. Justice White contended that both rules aimed at deterring frivolous appeals, but differed only in how they calculated penalties; thus, no irreconcilable conflict existed between them. He also pointed out inconsistencies in previous court decisions regarding similar issues and expressed concern about potential negative impacts on federalism principles if this trend continued.