The U.S. Supreme Court case Fidelity Federal Savings & Loan Association et al. v. De la Cuesta et al., 1981, revolved around the conflict between federal and state laws regarding mortgage contracts. The respondents, Mr. and Mrs. De La Cuesta, had taken out a loan from Fidelity Federal Savings & Loan Association to purchase their home in California with a deed of trust containing a due-on-sale clause that allowed the lender to declare the entire balance due if property was sold without its consent - which conflicted with California law prohibiting such clauses unless they were reasonable under certain circumstances or conditions set by statute or court decision. When the De La Cuestas transferred part ownership of their property to another party without notifying Fidelity, it sought foreclosure on grounds of breach of contract as per federal regulations issued by Federal Home Loan Bank Board (FHLBB). However, this action was challenged in lower courts citing violation against state law. In its ruling, the Supreme Court held that federal regulations superseded conflicting state laws when dealing with federally chartered savings and loan associations like Fidelity; thus upholding validity of due-on-sale clauses regardless of any contrary provisions in state legislation.

In the dissenting opinion for Fidelity Federal Savings & Loan Association v. De La Cuesta, Justice William Rehnquist argued that federal regulations should not supersede state law unless Congress explicitly states so. He emphasized the importance of preserving a balance between state and federal power, cautioning against an overreach by federal agencies in interpreting their own authority to preempt state laws. The majority's decision allowed federally chartered savings and loan associations to enforce due-on-sale clauses despite conflicting California law which prohibited such enforcement without lender consent or judicial process. However, Rehnquist contended that this was an unwarranted expansion of agency power at the expense of states' rights to regulate real property transactions within their borders.