In the case of Federal Power Commission v. Texaco Inc., 1963, the Supreme Court ruled in favor of the Federal Power Commission (FPC). The issue at hand was whether or not natural gas producers who sold their product to interstate pipelines were subject to regulation by FPC under Natural Gas Act. Prior to this case, such sales had been considered part of production and gathering process which fell outside FPC's jurisdiction. However, due to changes in industry practices where producers began selling directly into interstate pipelines rather than local distribution companies, it became necessary for court to reconsider scope of FPC's regulatory power. In a unanimous decision led by Justice William J Brennan Jr., court held that these direct sales did indeed fall within purview of Natural Gas Act and thus could be regulated by FPC.

In the dissenting opinion for Federal Power Commission v. Texaco Inc., Justice Harlan argued that the majority's decision to uphold the Federal Power Commission's (FPC) jurisdiction over independent producers of natural gas was a misinterpretation of both legislative intent and previous court decisions. He contended that Congress, in passing the Natural Gas Act, did not intend for FPC regulation to extend beyond "natural-gas companies" involved in interstate transportation or sale of natural gas. Independent producers like Texaco were not considered as such under this definition. Furthermore, he believed that prior Supreme Court rulings had established clear boundaries between state and federal regulatory authority over different aspects of natural gas production and sales; boundaries which were blurred by this ruling. In his view, extending FPC jurisdiction would disrupt these carefully balanced divisions of power without any clear indication from Congress authorizing such an expansion.