In the case of De Rees v. Costaguta et al., 1920, the United States Supreme Court was tasked with determining whether a lower court had jurisdiction over an action brought by a foreign corporation against another foreign corporation and its partners for breach of contract. The plaintiff, De Rees, was a French company that entered into an agreement with David Costaguta & Company to purchase silk in Japan and sell it in France. However, due to World War I disrupting trade routes between Japan and France, delivery became impossible leading to alleged losses for De Rees who then sued Costaguta & Co in New York where they were based. The defendants argued that as both parties were foreign corporations (De Rees being French and Costaguta Italian), the US courts did not have jurisdiction over their dispute. The Supreme Court disagreed stating that since the defendant's business operations were located within New York State at time of suit filing; hence local courts could exercise jurisdiction regardless of corporate nationality or domicile location. This ruling established precedent regarding international commercial disputes involving American-based entities even if all involved parties are from outside U.S., thereby reinforcing U.S.'s position as global hub for commerce.

In the dissenting opinion for De Rees v. Costaguta, Justice Holmes argued that the majority's decision to uphold a lower court ruling in favor of Costaguta was incorrect. He believed that the case should have been remanded back to state courts for further consideration due to insufficient evidence presented at trial. According to him, there were significant questions about whether or not De Rees had fulfilled his contractual obligations and if he was entitled to compensation from Costaguta as claimed. Furthermore, he disagreed with the majority's interpretation of New York law regarding contracts and felt it did not accurately reflect its intent or application in this particular situation. Ultimately, Justice Holmes concluded that by affirmatively deciding on these issues without proper examination or understanding of relevant state laws and facts at hand, the Supreme Court overstepped its jurisdictional boundaries.