In the 1923 case of Dillingham v. McLaughlin, the U.S. Supreme Court dealt with a dispute between banking institutions and state regulators in New York. The plaintiffs were officials from two national banks who challenged an order by the Superintendent of Banks of New York that required them to make good on certain obligations related to insolvent state banks under their control. They argued this was beyond his authority as it conflicted with federal law governing national banks' operations and insolvency procedures. The court ruled against the plaintiffs, upholding the superintendent's actions as within his purview under state law without conflicting with federal statutes or infringing upon federally chartered entities' rights. It held that while national banks are created and regulated primarily by federal laws, they also exist within states which have legitimate interests in protecting their citizens from financial harm caused by these institutions’ mismanagement or failure.

In the dissenting opinion for Dillingham v. McLaughlin, it was argued that the majority's ruling failed to adequately consider the rights of shareholders in a corporation undergoing liquidation. The dissenting justices believed that when a state official takes control of an insolvent bank and begins liquidating its assets, they effectively become trustees for all parties with financial interests in those assets - including shareholders. Therefore, these officials should be required to act in good faith towards all interested parties and not just creditors. They also felt that federal courts should have jurisdiction over cases involving such matters because they often involve questions of constitutional law or other important issues beyond mere state insolvency laws.