In the 1964 case of California et al. v. Lo-Vaca Gathering Co. et al., the Supreme Court of the United States addressed a dispute over natural gas prices between several states and private gas companies, including Lo-Vaca Gathering Company. The controversy arose from an agreement made in 1956 where these companies agreed to sell natural gas at fixed rates to interstate pipelines for twenty years, with no provision for price adjustments due to changes in production costs or market conditions. When they attempted to increase their prices later on, it led to legal action by various state governments who argued that this violated federal law which required approval from Federal Power Commission (FPC) before any rate increases could be implemented. The Supreme Court ruled against the private gas companies stating that under Natural Gas Act of 1938, all proposed rate changes must first receive FPC approval regardless if there is a pre-existing contract stipulating otherwise or not; thus reaffirming regulatory power over interstate commerce held by federal agencies such as FPC.

The dissenting opinion in the case of California et al. v. Lo-Vaca Gathering Co. et al., 1964, argued that the majority's decision to dismiss the complaint was premature and potentially harmful to both parties involved in this interstate natural gas dispute. The dissent emphasized that while there may be a need for further factual development before a final judgment can be made, dismissing the case outright could lead to unnecessary litigation costs and delays if it is later found that federal courts do indeed have jurisdiction over such disputes between states and private companies operating across state lines. Furthermore, they expressed concern about setting a precedent where states are left without recourse when seeking redress against out-of-state entities allegedly violating their laws or causing harm within their borders.