In the case of Industrial Association of San Francisco, et al. v. United States in 1924, the Supreme Court upheld a lower court's decision that an association of employers had violated the Sherman Antitrust Act by conspiring to restrain trade and monopolize commerce among states. The Industrial Association sought to control labor conditions and wages in San Francisco through collective action which included blacklisting union workers and boycotting businesses that did not comply with their policies. The Court ruled this constituted illegal restraint on interstate commerce as it affected goods transported across state lines for construction projects within San Francisco, thus falling under federal jurisdiction via the Commerce Clause of the Constitution.

In the dissenting opinion for Industrial Association of San Francisco v. United States, Justice McReynolds argued that the majority's decision to uphold a federal injunction against a local business group was an overreach of judicial power. He contended that this case did not involve interstate commerce and therefore fell outside the jurisdiction of federal courts. Furthermore, he believed that it was inappropriate for these courts to intervene in what he saw as essentially a labor dispute between private parties. In his view, such disputes should be resolved through negotiation or state law rather than by imposing federally mandated solutions. This stance reflects Justice McReynolds' broader belief in limited government intervention and strict interpretation of constitutional powers.