In the case of Hostetter et al. v. Idlewild Bon Voyage Liquor Corp., 1963, the U.S Supreme Court ruled in favor of New York State's right to regulate liquor sales at John F. Kennedy Airport (formerly known as Idlewild). The dispute arose when a company selling duty-free alcohol was sued by state authorities for violating local laws prohibiting Sunday liquor sales and requiring a license for such transactions. The defendant argued that since JFK airport was under federal jurisdiction due to its international nature, it should be exempt from state regulations on alcohol sale timings and licensing requirements. The court disagreed with this argument, stating that while airports like JFK do have an international character, they are not extraterritorial or beyond the reach of domestic law enforcement unless explicitly stated by Congress - which had not been done in this instance. Therefore, New York State could enforce its own laws within the airport premises without infringing upon federal authority or disrupting interstate commerce.

In the dissenting opinion for Hostetter et al. v. Idlewild Bon Voyage Liquor Corp., Justice Douglas argued that New York State's attempt to regulate liquor sales at an international airport terminal violated the Commerce Clause of the U.S. Constitution, which gives Congress exclusive power over interstate commerce. He contended that once a passenger enters an international zone like Idlewild Airport (now JFK), they are effectively outside state jurisdiction and under federal control, making any state regulation inapplicable within this area. Furthermore, he pointed out that such regulations could potentially interfere with foreign policy by affecting diplomatic relations if other countries decided to reciprocate similar measures against American businesses abroad.