In Clearwater v. Meredith et al., the Supreme Court of the United States was asked to decide whether a state court had jurisdiction over an action brought by citizens of another state against citizens of that same other state. The plaintiffs, all citizens of New York, sought to recover damages from defendants who were also residents and citizens of New York for injuries sustained in Pennsylvania due to negligence on their part. The Supreme Court held that the State Courts did not have jurisdiction over such cases because it would be contrary to public policy and violate principles established in Article IV Section 1 Clause 2 (the Full Faith and Credit Clause) which requires states give full faith and credit to each other's laws. Therefore, this case was dismissed as being beyond the scope of any particular State’s judicial power or authority.

In Clearwater v. Meredith et al., the Supreme Court was asked to decide whether a state court had jurisdiction over a case involving citizens of different states. The majority opinion held that it did not, as such cases were within the exclusive jurisdiction of federal courts. However, in dissent Justice Nelson argued that while Congress has authority to regulate interstate commerce and disputes between citizens of different states, this does not necessarily mean they have exclusive control over all matters concerning them. He reasoned that if Congress intended for federal courts to have exclusive jurisdiction in these types of cases then they would have explicitly stated so when passing legislation on the matter; since they did not do so he concluded that state courts still retain some power with regard to such issues.