In Heiser v. Woodruff et al., the Supreme Court ruled on a case involving bankruptcy law and its intersection with state laws regarding debt collection. The issue at hand was whether or not a creditor who had obtained judgment against a debtor in one state could pursue assets of that debtor held in another state, even if the debtor had since declared bankruptcy. The court found that under federal law, once an individual has been adjudicated as bankrupt, all their property wherever located becomes part of the estate in bankruptcy and is therefore protected from seizure by creditors seeking to satisfy judgments obtained prior to the declaration of bankruptcy. This decision effectively limited states' rights to enforce their own laws when they conflicted with federal statutes governing insolvency proceedings.

In the dissenting opinion for Heiser v. Woodruff et al., Justice Frank Murphy argued that the majority's decision was inconsistent with principles of federalism and comity, as well as previous Supreme Court rulings. He contended that a state court judgment should be given full faith and credit by federal courts unless it is shown to violate fundamental fairness or public policy. In this case, he believed there was no such violation; therefore, the federal court should have respected Colorado's determination of its own laws regarding creditor-debtor relationships rather than imposing its own interpretation. Furthermore, he disagreed with the majority’s view on bankruptcy law application in this case stating it undermined states' rights to regulate their internal affairs without interference from federal authorities or courts.