In Doran v. Salem Inn, Inc., the U.S. Supreme Court addressed a dispute involving three corporations that operated bars featuring topless female dancers in North Hempstead, New York. The town passed an ordinance banning topless dancing and the businesses sued to prevent its enforcement, arguing it violated their First Amendment rights of freedom of expression. While the case was pending in district court, two establishments were granted preliminary injunctions preventing enforcement of the law against them; however, one establishment was denied this relief because they had already been prosecuted under the new law. The Supreme Court held that federal courts have discretion to grant or deny preliminary injunctions based on whether there is a substantial likelihood of success on merits and irreparable injury if it's not granted. However, for those who have already been prosecuted under such laws (like one bar), they must exhaust state judicial remedies before seeking federal relief unless extraordinary circumstances exist which would make requiring exhaustion unjust.

In the dissenting opinion for Doran v. Salem Inn, Inc., Justice William Rehnquist argued that federal courts should abstain from deciding on state law issues until they have been addressed by state courts. He believed that the majority's decision to grant preliminary injunctions against enforcing a local ordinance prohibiting topless dancing in bars was an overreach of federal judicial power. According to him, this case involved complex and unsettled questions of New York constitutional and statutory law which should be resolved by New York courts first before any intervention from federal judiciary. Furthermore, he contended that there were no exceptional circumstances or irreparable harm present in this case warranting such immediate action from a federal court.