In the case of Gully v. First National Bank in Meridian, 1936, the U.S. Supreme Court ruled that a state tax collector could not be sued by a national bank in federal court over an alleged unconstitutional state tax law unless there was a clear and substantial federal question involved. The First National Bank had argued that as it was established under federal laws, any dispute involving its operations should automatically qualify for consideration by the federal courts - this principle is known as "federal ingredient jurisdiction". However, Justice Benjamin N. Cardozo rejected this argument on behalf of the unanimous court stating that if every legal claim implicating a federally chartered institution were to give rise to 'arising under' jurisdiction then many cases would be unnecessarily shifted from state to federal courts which would disrupt the balance between them.

In the dissenting opinion for Gully v. First National Bank in Meridian, Justice Stone argued that the majority's interpretation of jurisdiction was too narrow and failed to consider Congress' intent when it enacted legislation allowing national banks to sue or be sued in federal courts. He contended that this law was intended to provide a neutral forum for resolving disputes involving national banks, which often operate across state lines and are subject to both federal and state laws. By limiting jurisdiction only to cases where a federal question is presented on the face of the plaintiff's complaint, he believed that the Court had effectively denied many national banks access to federal courts even though they may have valid claims or defenses based on federal law. This could potentially leave them at a disadvantage if forced into litigation in state courts biased against out-of-state corporations or unfamiliar with complex issues of banking regulation.