In the 1951 case of Carson, Commissioner of Finance & Taxation v. Roane-Anderson Company et al., the U.S Supreme Court ruled in favor of Roane-Anderson Company and other property owners near Oak Ridge, Tennessee. The dispute arose when the federal government took over private properties during World War II for a nuclear project but continued to lease them back to their original owners after the war ended. The state attempted to tax these properties as if they were privately owned, while Roane-Anderson argued that since they were federally controlled, they should be exempt from local taxation under constitutional law which prevents states from taxing federal property without consent from Congress. In its decision, the court agreed with this argument and held that despite being leased back to their original owners by a corporation created by the United States (the Atomic Energy Commission), these properties remained immune from state taxation because ultimate possession and control still resided with the federal government.

In the dissenting opinion for Carson v. Roane-Anderson Company, Justice Douglas argued that the majority's decision was inconsistent with previous rulings of the Court and violated principles of federalism. He contended that Tennessee had a right to tax federally-owned property within its borders if it so chose, as long as such taxation did not interfere with any federal function or violate any constitutional provision. According to him, this case involved neither situation; therefore, he believed Tennessee should have been allowed to levy taxes on government-owned land leased by private entities like Roane-Anderson Company. Furthermore, he disagreed with the majority's interpretation of "exclusive jurisdiction," arguing instead that states retain some residual authority over federally owned lands unless explicitly denied by Congress.