In the 1946 case of Interstate Natural Gas Co., Inc. v. Federal Power Commission, the U.S Supreme Court ruled in favor of the Federal Power Commission (FPC). The dispute arose when Interstate Natural Gas Company challenged FPC's jurisdiction over its business operations under the Natural Gas Act of 1938. The company argued that it was not a natural gas company as defined by this act and therefore should not be subject to FPC regulation. However, the court held that since Interstate transported and sold natural gas in interstate commerce for resale, it fell within the definition provided by law and thus came under FPC's regulatory authority. This decision affirmed federal power to regulate private companies involved in interstate commerce activities related to energy resources.

In the dissenting opinion for Interstate Natural Gas Co., Inc. v. Federal Power Commission, Justice Frankfurter argued that the majority's interpretation of the Natural Gas Act was too broad and exceeded Congress' intent. He contended that while Congress intended to regulate interstate commerce in natural gas, it did not intend to give the Federal Power Commission (FPC) authority over all aspects of a company's operations simply because some part of its business involved interstate commerce. The FPC should only have jurisdiction over those activities directly affecting rates charged by companies engaged in interstate transportation or sale for resale of natural gas; other matters should be left to state regulation or private contract negotiation. Furthermore, he disagreed with how broadly "sale" was defined by the majority as this could potentially encompass transactions not meant to be regulated under federal law.