The U.S. Supreme Court case Federal Power Commission v. Sunray DX Oil Co., et al., in 1967, revolved around the issue of whether or not the Federal Power Commission (FPC) had jurisdiction over sales of natural gas by independent producers to interstate pipelines for resale when such sales were made under long-term contracts at fixed prices subject to periodic renegotiation. The court held that FPC did have jurisdiction and could regulate these types of transactions as per Section 1(b) of the Natural Gas Act which gives FPC control over transportation and sale for resale, in interstate commerce, but does not apply to production or gathering processes. This decision was significant because it expanded federal regulatory power into areas traditionally controlled by states.

In the dissenting opinion for Federal Power Commission v. Sunray DX Oil Co., it was argued that the majority's decision to uphold the Federal Power Commission's (FPC) order, which effectively allowed natural gas producers to bypass state regulatory bodies and sell directly to consumers at unregulated prices, was a misinterpretation of both legislative intent and statutory language. The dissenters believed that Congress intended for all sales of natural gas in interstate commerce - whether direct or indirect - to be regulated by FPC under Natural Gas Act. They contended that allowing such an exception not only undermines state authority but also threatens consumer protection from price gouging. Furthermore, they disagreed with the majority’s interpretation of “direct” versus “indirect” sales as being overly simplistic and failing to consider broader implications on market dynamics and public interest.