In the case of Howard Delivery Service, Inc., et al. v. Zurich American Insurance Co., the U.S. Supreme Court had to decide whether an insurance company's claim for unpaid workers' compensation premiums could be considered as an "excise tax" under bankruptcy law and thus given priority status in a bankruptcy proceeding. The court ruled 6-3 against Zurich American Insurance Company, stating that unpaid workers’ compensation insurance premiums do not qualify as “excise taxes” on a debtor’s transactions or gross receipts under Bankruptcy Code §507(a)(8)(E). Therefore, such claims are not entitled to priority payment in bankruptcy proceedings over other unsecured creditors' claims. This decision clarified how certain types of debts should be prioritized during bankruptcies.

In the dissenting opinion for Howard Delivery Service, Inc., et al. v. Zurich American Insurance Co., Justice Kennedy argued that workers' compensation premiums should be considered as benefits to employees and thus given priority status in bankruptcy proceedings. He contended that these premiums are a necessary cost of doing business and contribute directly to an employee's welfare by providing insurance against work-related injuries or illnesses. Therefore, they should not be treated as general unsecured claims but rather granted higher priority during bankruptcy distribution. This view contrasts with the majority opinion which held that such premiums do not qualify for wage-priority status under the Bankruptcy Code because they do not constitute "wages earned" by employees.