In the 1919 case Ex parte Peterson, the U.S. Supreme Court was asked to consider whether a federal court had jurisdiction over a dispute between two parties from different states when one of them was in receivership. The Interstate Coal Company, based in Kentucky but incorporated in Delaware, had been placed into receivership and its assets were being managed by Mr. Peterson under orders from a federal district court judge. A creditor of the company filed suit against Peterson as receiver for payment on an outstanding debt; however, this lawsuit was initiated at state level rather than through federal courts where bankruptcy proceedings typically occur. The Supreme Court ruled that because the coal company's assets were under control of a federally-appointed receiver operating under authority granted by a federal judge, any legal disputes involving those assets should be handled within the same judicial system - i.e., at federal level - to ensure consistency and avoid potential conflicts between state and national laws or rulings.

In the dissenting opinion for Ex parte Peterson, it was argued that the court erred in its decision to deny a writ of habeas corpus. The dissenting justices believed that the petitioner had been unlawfully detained and deprived of his liberty without due process of law. They contended that he should have been allowed to present evidence and witnesses in his defense before being held in contempt by a federal judge. Furthermore, they disagreed with the majority's interpretation of "contempt," arguing instead for a narrower definition which would not include acts committed outside the presence of the court or those not directly obstructing justice. They also expressed concern about potential abuses of power by judges who could use their authority over contempt proceedings to punish individuals arbitrarily or vindictively.