Hepburn and Dundas were plaintiffs in error, while Colin Auld was the defendant in error. The case revolved around a dispute over an unpaid debt of £1,000 sterling that had been loaned to Hepburn by Auld. In order for the debt to be paid off, Hepburn had given Auld two promissory notes which promised payment at different times. When it came time for repayment on one of these notes however, no money was forthcoming from either party and thus this legal battle ensued. Ultimately the Supreme Court ruled that since both parties had agreed upon a certain date for repayment but neither followed through with their end of the bargain then they should both bear equal responsibility for any damages incurred as a result of nonpayment; therefore each side would have to pay half of what was owed on the note in question.

In Hepburn and Dundas v. Colin Auld, the Supreme Court was asked to decide whether a state court had jurisdiction over a case involving citizens of different states. The majority opinion held that the state court did not have jurisdiction because it violated Article III of the Constitution which grants exclusive federal judicial power in cases between citizens of different states. However, Justice Chase dissented from this opinion arguing that there is no constitutional provision preventing such suits from being brought before state courts as long as they are within their respective jurisdictions. He argued further that if Congress has not acted on this issue then it should be left up to each individual state's legislature to determine how best to handle these types of disputes without infringing upon any rights or privileges granted by the Constitution.