In the 1968 case Daniel et al. v. Paul, the U.S Supreme Court ruled that a privately-owned recreational facility in Alabama was subject to federal anti-discrimination laws because it engaged in interstate commerce. The Lake Nixon Club denied entry to African Americans and only allowed white people as members or guests, which led five black residents of Little Rock to file a lawsuit against the club's owner under Title II of the Civil Rights Act of 1964. The District Court dismissed their complaint on grounds that this private establishment did not fall within any category covered by Title II since it didn't serve food or lodging and wasn't an entertainment venue like a stadium or arena. However, upon appeal, Justice Hugo Black delivered the opinion for an 8-1 majority at Supreme Court level stating that even though no food was served there except snack bar items such as sandwiches and soft drinks; these were enough to bring it under 'place of exhibition' clause mentioned in Title II making them liable for racial discrimination charges.

In the dissenting opinion for Daniel et al. v. Paul, Justice Hugo Black argued that the majority's interpretation of the Civil Rights Act was too broad and could potentially infringe on private property rights. He contended that while it is important to fight against racial discrimination, this should not come at the expense of other fundamental rights such as property ownership. Furthermore, he disagreed with the majority's view that a business becomes "public" simply because it serves food or offers entertainment; instead, he believed these factors alone do not make an establishment public under federal law unless its operations significantly affect interstate commerce. Thus, according to Justice Black’s dissenting opinion in this case involving a racially segregated recreational facility in Alabama (Lake Nixon Club), there was insufficient evidence to prove that Lake Nixon Club had substantial impact on interstate commerce and therefore fell within jurisdiction of Congress' power under Commerce Clause.