In the case of Cooper et al. v. Federal Reserve Bank of Richmond, 1983, the Supreme Court ruled that federal instrumentalities such as the Federal Reserve Banks are immune from both direct and indirect taxation by state governments under Section 5319 of Title 12 in U.S.C., which prohibits states from taxing these entities' obligations or income. The court held that this immunity extended to a Virginia tax on bank franchise measured by net capital, where part of its value was derived from federal obligations owned by a national bank. This decision reinforced the principle that states cannot directly or indirectly tax instruments used for carrying out constitutional functions of government.

In the dissenting opinion for Cooper et al. v. Federal Reserve Bank of Richmond, Justice Brennan disagreed with the majority's decision to uphold a lower court ruling that dismissed an age discrimination lawsuit filed by employees against their employer, the Federal Reserve Bank of Richmond. He argued that Congress intended for federal instrumentalities such as the bank to be subject to lawsuits under Age Discrimination in Employment Act (ADEA). The justice believed that there was no clear evidence indicating Congress meant to exclude entities like this from ADEA coverage and thus, he felt it was inappropriate for courts to infer such exclusion without explicit legislative intent. Furthermore, he contended that excluding these institutions would undermine ADEA’s purpose which is protecting older workers from arbitrary employment decisions based on age.