In Fornaris v. Ridge Tool Co., the Supreme Court of the United States addressed a dispute between a Puerto Rican distributor and an Ohio manufacturer over whether federal or local law should govern their contract. The plaintiff, Fornaris, argued that his distribution agreement with Ridge Tool was unfairly terminated in violation of Puerto Rico's Dealer's Contract Law 75 (Law 75), which protects distributors from arbitrary termination by manufacturers. On the other hand, Ridge Tool contended that their relationship was governed by federal antitrust laws rather than Law 75. The case reached the Supreme Court after lower courts sided with Ridge Tool. The Supreme Court ruled unanimously in favor of Fornaris, holding that there is no conflict between federal antitrust laws and Law 75 as they serve different purposes: while antitrust laws aim to promote competition for consumer benefit, Law 75 seeks to protect individual dealers against abusive practices by suppliers. Therefore, both can coexist without undermining each other’s objectives.

In the dissenting opinion for Fornaris v. Ridge Tool Co., it was argued that the majority's decision to apply Ohio law, instead of Puerto Rican law, in determining whether a contract existed between parties was incorrect. The dissenting justices believed that this case should have been decided based on Puerto Rico’s laws since all significant elements related to the alleged agreement occurred there. They also disagreed with the majority's view that applying Puerto Rican law would violate due process or full faith and credit clauses of U.S Constitution because they felt these constitutional provisions were not applicable in this situation. Furthermore, they expressed concern about potential negative implications of ruling otherwise; suggesting it could undermine local legal systems by allowing stateside corporations to avoid liability under territorial laws simply by incorporating elsewhere.