The U.S. Supreme Court case Gray, Director of the Bituminous Coal Division of the Department of Interior, et al. v. Powell et al., Receivers (1940) revolved around a dispute over coal mining regulations and their enforcement by federal authorities under the New Deal's Bituminous Coal Act 1937. The plaintiffs were receivers for two insolvent coal companies who argued that they should not be subject to penalties imposed by this act as it was unconstitutional due to its regulation of intrastate commerce and delegation of legislative power to private entities - in this case, coal producers themselves through National Bituminous Coal Commission established under the act. However, Justice Hugo Black writing for majority upheld constitutionality stating that Congress had ample authority to regulate even local activities if they have substantial economic effects on interstate commerce; also rejecting non-delegation doctrine argument saying commission merely aided in policy execution rather than making laws itself.

In the dissenting opinion for Gray v. Powell, Justice McReynolds argued that the Bituminous Coal Act of 1937 was unconstitutional because it violated principles of federalism and separation of powers. He believed that Congress had overstepped its bounds by attempting to regulate intrastate commerce, which he saw as a power reserved for individual states under the Constitution. Furthermore, he contended that Congress had improperly delegated legislative authority to an administrative agency (the Bituminous Coal Commission), thereby undermining the constitutional principle of separation of powers among different branches of government. In his view, these actions represented dangerous encroachments on fundamental constitutional protections against arbitrary governmental action.