In the case of George Campbell Painting Corp. v. Reid et al., Members of New York City Housing Authority, 1967, the Supreme Court was asked to consider whether a public housing authority could legally reject a contractor's bid on a painting contract due to concerns about labor unrest and work stoppages that might result from hiring this particular contractor. The court ruled in favor of the housing authority, stating that it had acted within its rights when it rejected George Campbell Painting Corp.'s bid for these reasons. The court found that there were reasonable grounds for believing such disruptions would occur if this company was awarded the contract and therefore concluded that protecting against potential delays or interruptions in providing essential services justified rejecting their bid.

In the dissenting opinion for George Campbell Painting Corp. v. Reid et al., the justice argued that the majority's decision was flawed because it failed to consider important factors in determining whether a contractor had fulfilled its obligations under a contract with New York City Housing Authority (NYCHA). The dissenting justice believed that NYCHA acted arbitrarily and capriciously when it declared George Campbell Painting Corp. in default of their contract, without considering whether there were valid reasons for any delays or non-performance on part of the company. Furthermore, they disagreed with how damages were calculated by NYCHA, arguing that these should be based on actual losses suffered rather than an arbitrary percentage stipulated in the contract. They also pointed out inconsistencies between this case and previous rulings where contractors were given more leeway to prove their cases before being declared in default.