In the case of Gordon, Secretary of Banking of Pennsylvania v. Ominsky et al., Receivers (1934), the Supreme Court examined whether a state banking department could be held liable for losses incurred by a bank under its supervision. The court ruled in favor of Gordon, stating that while the Department had supervisory powers over banks, it did not have direct control over their operations and therefore could not be held responsible for any mismanagement or fraud committed by bank officials. This decision reinforced the principle that government agencies are generally immune from liability for actions taken within their regulatory capacity unless they directly participate in wrongful conduct.

In the dissenting opinion for Gordon v. Ominsky, Justice Cardozo argued that Pennsylvania's Secretary of Banking had no right to take over a private bank without due process or just compensation. He believed that the state law allowing such action was unconstitutional and violated property rights protected by the Fourteenth Amendment. The majority ruled in favor of Gordon, but Cardozo disagreed with their interpretation of both federal and state laws regarding banking regulation. He contended that even during a financial crisis, constitutional protections should not be disregarded; instead, they should guide actions taken to resolve such crises.