In Hepner v. United States (1908), the U.S. Supreme Court ruled that a bankruptcy law passed by Congress in 1898 was constitutional, despite objections from creditors who argued it violated their Fifth Amendment rights to due process and equal protection under the law. The case involved a debtor named George Hepner who filed for bankruptcy and sought to discharge his debts under this new federal statute. His creditors challenged the constitutionality of this act, arguing that it unfairly deprived them of their property without just compensation or due process of law because they were not given an opportunity to contest the discharge before it took effect. However, Justice Oliver Wendell Holmes Jr., writing for a unanimous court, rejected these arguments and upheld the validity of the Bankruptcy Act on grounds that its provisions did not violate any constitutional protections afforded to creditors.

In the dissenting opinion for Hepner v. United States, Justice Harlan argued that the majority's interpretation of the Bankruptcy Act was incorrect and overly broad. He contended that Congress did not intend to give bankruptcy courts jurisdiction over all property held by a debtor at any point during their bankruptcy proceedings, but rather only over property within their possession or control at the time they filed for bankruptcy. This would exclude assets transferred prior to filing from being clawed back into the bankrupt estate unless there were fraudulent intent involved in such transfer. Furthermore, he believed this approach better aligned with principles of equity and fairness as it prevented creditors from benefiting unfairly at others' expense through retroactive application of laws on asset distribution in insolvency situations.