In the 1907 case of Fauntleroy v. Lum, the U.S. Supreme Court dealt with a dispute over jurisdiction and legal procedure involving two parties from different states. The plaintiff, a resident of Missouri, had sued the defendant in Mississippi for breach of contract related to cotton futures transactions that were deemed illegal under Missouri law but not Mississippi's. The defendant argued that since these contracts were valid where they were made (Mississippi), they should be enforceable there as well. The Supreme Court ruled in favor of the defendant, upholding his right to have the case heard in Mississippi courts rather than those of Missouri - despite acknowledging that this could potentially allow individuals to evade laws by simply crossing state lines for certain transactions. This decision was based on principles established by prior cases which held that matters relating to contractual obligations are generally determined by local law where contracts are formed or performed unless such enforcement would violate public policy.

In the dissenting opinion for Fauntleroy v. Lum, Justice Harlan argued that Mississippi courts should have jurisdiction over the case because it involved a dispute between citizens of different states. He contended that federal courts were not intended to supersede state courts in such matters and believed that allowing this would undermine state sovereignty. Furthermore, he disagreed with the majority's interpretation of Article III, Section 2 of the Constitution which grants federal jurisdiction in cases involving citizens from different states only when they are "controversies" rather than mere "cases." In his view, this distinction was crucial and had been overlooked by his colleagues who ruled in favor of federal jurisdiction. Thus, he concluded that Mississippi law should apply to resolve this dispute as opposed to resorting to an overarching national legal framework.