In the 1941 case Cudahy Packing Co., Ltd. v. Holland, Administrator of the Wage and Hour Division, U.S. Department of Labor, the Supreme Court ruled in favor of Holland and upheld provisions within the Fair Labor Standards Act (FLSA) that regulated interstate commerce labor standards. The Cudahy Packing Company had argued that certain parts of their business were not subject to these regulations as they were not directly involved in interstate commerce but rather constituted intrastate activities or production for sale without any contractual obligation crossing state lines. However, Justice Frankfurter writing for a unanimous court held that even if an employee's activities related to goods destined for out-of-state shipment only indirectly or potentially, those employees are still engaged in interstate commerce under FLSA definitions because such activities have a close and immediate tie with the process of production for commerce.

In the dissenting opinion for Cudahy Packing Co., Ltd. v. Holland, Justice Owen Roberts disagreed with the majority's interpretation of interstate commerce and its application to labor laws. He argued that the Fair Labor Standards Act was not intended to regulate local activities such as those performed by maintenance workers at a meatpacking plant, even if they indirectly affected interstate commerce. According to him, this broad interpretation would give Congress unlimited power over all economic activity in states which he believed contradicted constitutional principles of federalism and state sovereignty. Furthermore, he expressed concern about potential abuses of power and warned against allowing federal intrusion into areas traditionally governed by state law without clear congressional intent.