In the case of Hawaii v. Gordon, 1962, the Supreme Court of the United States was asked to determine whether a federal district court in Hawaii had jurisdiction over an action brought by the State against a resident of California for unpaid income taxes. The defendant, Mr. Gordon, argued that he was not subject to Hawaiian tax laws as he did not reside there during the time period in question and his business operations were based out of California. However, it was found that Mr. Gordon had significant financial interests and activities within Hawaii which led him to be classified as doing business within state lines under Hawaiian law. The Supreme Court held that due process does not prohibit a state from taxing income derived from sources within its borders even if earned by non-residents who do no other business there beyond receiving said income; therefore upholding jurisdiction on this basis would violate neither constitutional nor statutory principles regarding personal or extraterritorial jurisdiction. This decision affirmed states' rights to levy taxes on incomes generated within their boundaries regardless of where those earning such incomes may reside or primarily conduct their affairs.

The dissenting opinion in the case of Hawaii v. Gordon argued that the Supreme Court should not have taken jurisdiction over this case as it was a matter for state courts to decide. The justice believed that the issue at hand, which involved an interpretation of Hawaiian law regarding land rights and leases, did not warrant federal intervention or review by the highest court in the land. They contended that there were no significant constitutional questions raised by this dispute and thus it fell outside their purview. Furthermore, they expressed concern about setting a precedent where any disagreement involving state laws could potentially be escalated to federal level, undermining states' authority and autonomy in managing their own legal affairs.