In the case of Goggin, Trustee in Bankruptcy v. Division of Labor Law Enforcement of California (1948), the U.S Supreme Court ruled on a dispute over priority between wage claims and tax liens in bankruptcy proceedings. The State of California's Division of Labor Law Enforcement claimed that under state law, wage earners' claims had priority over federal tax liens when distributing assets from a bankrupt estate. However, Goggin as trustee argued that under federal law, specifically Section 67c of the Bankruptcy Act, federal tax liens took precedence over all other debts except for certain specified exceptions which did not include wages owed to workers by the bankrupt entity. The Supreme Court sided with Goggin and held that where there is conflict between state laws regarding priorities in bankruptcy cases and those established by Congress through legislation such as Section 67c; it is the latter which prevails due to Supremacy Clause enshrined within Article VI clause 2 of US Constitution. Therefore, despite any contrary provisions within Californian law or indeed any other states’ legislations; Federal Tax Liens would have superior claim compared to wage earners during distribution process following declaration & adjudication related to insolvency/bankruptcy.

In the dissenting opinion for Goggin v. Division of Labor Law Enforcement of California, Justice Frankfurter disagreed with the majority's interpretation that a trustee in bankruptcy could be considered an "employer" under California law and thus liable for unpaid wages to employees. He argued that this interpretation was inconsistent with federal bankruptcy laws which aim to protect trustees from personal liability. Furthermore, he contended that it undermined the primary purpose of these laws: to distribute assets equitably among creditors. By allowing state labor claims to supersede other debts, he believed it unfairly prioritized certain creditors over others and disrupted the balance intended by federal legislation. Therefore, while acknowledging states' rights to enforce their own labor laws within their jurisdiction, he maintained such enforcement should not interfere or conflict with overarching federal bankruptcy regulations.