In the case of Federal Power Commission v. East Ohio Gas Co., 1949, the U.S Supreme Court ruled that the Federal Power Commission (FPC) had jurisdiction over sales for resale of natural gas in interstate commerce, even if such sales were made by a company not engaged in transportation. The FPC sought to regulate wholesale rates charged by East Ohio Gas Company and others who sold natural gas produced from their own wells to pipeline companies for resale across state lines. The defendants argued that they were producers rather than transporters or distributors and thus outside FPC's regulatory authority under Natural Gas Act of 1938. However, the court held that Congress intended to give FPC broad powers to regulate all aspects of interstate natural gas industry including wellhead sales for resale regardless of whether seller was also involved in transporting or distributing gas.

In the dissenting opinion for Federal Power Commission v. East Ohio Gas Co., it was argued that the majority's decision to uphold federal regulation of direct sales of natural gas from producers to consumers extended beyond constitutional limits. The dissenters contended that such transactions were intrastate commerce, not interstate, and thus should be outside the jurisdiction of a federal agency like the Federal Power Commission (FPC). They believed this interpretation distorted both statutory language and legislative intent behind regulating only those activities directly affecting wholesale rates in interstate commerce. Furthermore, they expressed concern about potential overreach by federal agencies into areas traditionally regulated by states or left to free markets if such broad interpretations were allowed to stand unchallenged.