In the 1935 case Callaghan et al., Receivers, v. Reconstruction Finance Corp., the U.S Supreme Court ruled in favor of the Reconstruction Finance Corporation (RFC). The dispute arose when a bank that had received loans from RFC went into receivership and its assets were insufficient to repay all creditors. The question was whether RFC, as a government agency providing emergency financial assistance during the Great Depression, should be treated like an ordinary creditor or given priority over other creditors. The court held that Congress intended for RFC to have priority so it could effectively carry out its role stabilizing banks and protecting depositors' interests. Therefore, even though state law would normally determine priorities among competing claims on a failed bank's assets, federal law took precedence in this situation because of Congress's clear intent expressed through legislation creating and funding RFC.

In the dissenting opinion for Callaghan et al., Receivers, v. Reconstruction Finance Corp., Justice Cardozo disagreed with the majority's decision to allow a federal agency (the Reconstruction Finance Corporation) to sue in state court without consent from the defendants. He argued that this violated principles of comity and federalism by allowing a federal entity to bypass normal jurisdictional rules applicable to private parties. Furthermore, he contended that such an interpretation could lead to potential abuses of power as it would enable any federally-created corporation or agency to unilaterally decide where they wished their cases heard, regardless of whether it was convenient or fair for other parties involved. This view held that respect between different levels and branches of government should be maintained through mutual consent rather than unilateral action.