In the 1920 case Johnson v. State of Maryland, the United States Supreme Court ruled in favor of a federal employee who had been fined by the state for performing his duties without obtaining a local license. The plaintiff, Mr. Johnson was an electrician employed by the U.S. Post Office Department and was tasked with installing mailboxes on rural routes in Maryland when he was fined $5 for not having a state-issued electrician's license as required under Maryland law. The court held that while states have power to regulate certain businesses within their borders, they cannot interfere with or control operations of federal government agencies or employees carrying out their official duties under lawful authority from Congress. This decision reaffirmed principles established earlier in McCulloch v. Maryland (1819) about supremacy of federal over state laws where both jurisdictions overlap but conflict. Justice Joseph McKenna delivered opinion stating: "It would be intolerable if each could tax or regulate him [a Federal officer] out of office...". Thus, this ruling reinforced doctrine that states may not directly impede valid exercises of power by Federal Government through licensing requirements imposed upon its officers/employees engaged in performance of their federally mandated tasks.

In the dissenting opinion for Johnson v. State of Maryland, Justice Holmes disagreed with the majority's decision that a state could not regulate federal employees' conduct while they were performing their duties. He argued that states should have some authority over federal activities within their borders unless explicitly prohibited by Congress or if it interferes with the execution of those duties. Holmes believed that there was no constitutional provision or act of Congress which prevented Maryland from requiring a federally employed driver to obtain a state license before operating an automobile on its roads. He contended this did not interfere with his performance as a postal employee but rather promoted public safety and welfare, which are under state jurisdiction.