In the case of Clearfield Trust Co. et al. v. United States, 1942, the U.S Supreme Court ruled that federal common law, not state law, determines the rights and obligations of the United States on commercial paper it issues. The dispute arose when a check issued by a government agency was fraudulently endorsed and paid out to an unauthorized party by Clearfield Trust Company. When the US Government sought reimbursement from Clearfield for paying out on a fraudulent endorsement, Clearfield argued that under Pennsylvania state law (where they were located), their liability had expired due to passage of time since payment was made - essentially arguing that statute of limitations applied in this case based on local laws. The court disagreed with this argument stating that when dealing with obligations and rights associated with federal instruments like government-issued checks; it is federal common law rather than state-specific regulations which apply because these matters are substantially related to unique federally created relationships or transactions.

The dissenting opinion in the Clearfield Trust Co. v. United States case argued that federal common law should not be applied to disputes involving commercial paper issued by the U.S government, as it would create unnecessary confusion and inconsistency within state jurisdictions where such matters are typically resolved. The dissenters believed that existing state laws were sufficient for resolving these issues and there was no need for a separate set of rules at the federal level. They also expressed concern about potential conflicts between federal and state courts if both were allowed to interpret commercial paper laws differently, which could lead to legal uncertainty and unpredictability for parties involved in such transactions.