In the case of Florida Department of Revenue v. Piccadilly Cafeterias, Inc., the U.S. Supreme Court was asked to determine whether a company could use federal bankruptcy law to avoid paying certain taxes owed to a state government. The issue arose when Piccadilly Cafeterias filed for Chapter 11 bankruptcy and sold its assets in order to pay off creditors. However, it did not pay transfer taxes on those sales as required by Florida law because it believed that under Section 1146(a) of the Bankruptcy Code, which provides an exemption from stamp or similar tax for asset transfers "under a plan confirmed" in bankruptcy proceedings, they were exempted from such payment. The court ruled against Piccadilly Cafeterias stating that this provision only applies after a bankruptcy plan has been approved by the court and since their asset sale occurred before confirmation of their reorganization plan, they were liable for these unpaid taxes.

In the dissenting opinion for FLA. DEP'T OF REVENUE v. PICCADILLY CAFETERIAS, INC., Justice Scalia argued that the majority misinterpreted Section 1146(a) of the Bankruptcy Code, which provides a stamp-tax exemption for asset transfers "under a plan confirmed" in bankruptcy proceedings. He contended that this provision should apply only to post-confirmation transfers because it is more consistent with both statutory text and structure. The majority's interpretation would extend tax exemptions to pre-confirmation sales approved by courts as part of reorganization plans, an outcome not intended by Congress according to Scalia. He also criticized their reliance on legislative history and policy considerations instead of clear statutory language.