The U.S. Supreme Court case Federal Trade Commission v. Pacific States Paper Trade Association in 1926 involved the Federal Trade Commission (FTC) accusing the Pacific States Paper Trade Association of violating the Sherman Antitrust Act by fixing prices and creating a monopoly within their industry. The association argued that they were not engaged in interstate commerce, thus exempting them from FTC jurisdiction under this act. However, the court ruled against them stating that even if their activities did not directly involve interstate commerce, it still had a significant effect on it due to its monopolistic nature which was enough for federal regulation to apply under antitrust laws.

In the dissenting opinion for Federal Trade Commission v. Pacific States Paper Trade Association, Justice Stone argued that the majority's decision to uphold a cease and desist order against Pacific States was an overreach of judicial power. He contended that the court had no jurisdiction in this case because it involved a private trade association rather than a public corporation or entity engaged in interstate commerce. Furthermore, he believed that there was insufficient evidence to prove any violation of antitrust laws by Pacific States as alleged by FTC. The mere existence of price-fixing agreements among members did not necessarily constitute restraint on trade or competition unless they were shown to have actual detrimental effects on market conditions. Thus, according to him, without such proof, FTC’s action amounted to unwarranted interference with private business operations based on speculative assumptions about potential harm.