The State Highway Commission of Wyoming v. Utah Construction Company case in 1928 revolved around a dispute over the construction of a highway in Wyoming. The state had contracted with the Utah Construction Company to build part of this road, but later claimed that the company had not fulfilled its contractual obligations and sought damages for alleged deficiencies in workmanship and materials used. The Supreme Court ruled against Wyoming, stating that it could not sue on grounds related to contract performance because it was acting as a sovereign entity when entering into contracts for public works projects like highways. Therefore, any disputes arising from such contracts were subject to arbitration rather than litigation in court. This ruling established an important precedent regarding how states can enforce their contractual rights and responsibilities.

In the dissenting opinion for State Highway Commission of Wyoming v. Utah Construction Company, Justice Stone argued that the majority's decision to allow a state agency to sue in federal court was inconsistent with previous rulings and threatened states' rights. He contended that allowing such suits could lead to an increase in litigation against states, which would undermine their sovereignty and potentially burden them with significant legal costs. Furthermore, he suggested that this ruling could open up a Pandora's box of potential lawsuits against other types of government entities as well. In his view, it was not appropriate or necessary for federal courts to intervene in disputes between state agencies and private companies; these matters should be resolved at the state level instead.