The U.S. Supreme Court case Cunard Steamship Company, Ltd., et al. v. Mellon, Secretary of the Treasury, et al., 1922 revolved around the interpretation and enforcement of Prohibition laws on international waters by American authorities. The Cunard Steamship Company challenged a directive from Andrew W. Mellon, then Secretary of the Treasury that required foreign vessels to dispose or lock up all alcoholic beverages while in U.S territorial waters (within three miles off coast). The company argued this violated international law and infringed upon their rights as a British corporation operating under British law where alcohol was legal at that time. However, the Supreme Court ruled in favor of Mellon stating that once within US territorial waters foreign ships must comply with local laws including prohibition regardless if they were not intended for importation into America or consumption aboard ship while in port. This ruling established an important precedent regarding jurisdictional authority over foreign entities within national boundaries and further solidified Prohibition-era policies until its repeal through Amendment XXI in 1933.

In the dissenting opinion for Cunard Steamship Company, Ltd. v. Mellon, Justice McReynolds argued that the Eighteenth Amendment and Volstead Act should not apply to foreign vessels traveling in American waters if no transactions occur within U.S jurisdiction. He contended that international law traditionally allows ships of all nations freedom while passing through territorial waters unless their actions are detrimental to peace or good order. The majority's interpretation would mean an unwarranted extension of domestic legislation into a realm where it has no rightful place and could potentially lead to serious international complications by imposing our national policies on other countries' citizens aboard their own vessels. Furthermore, he pointed out inconsistencies in applying this rule only to alcoholic beverages but not other items like firearms or lottery tickets which were also prohibited under U.S laws at the time.