In the case of Joseph, Comptroller, et al. v. Carter & Weekes Stevedoring Co., 1946, the U.S Supreme Court ruled in favor of Carter & Weekes Stevedoring Co., a company that had been contracted by the federal government to perform stevedoring operations at military bases during World War II. The issue arose when New York State attempted to impose unemployment compensation taxes on wages paid for these services under its Unemployment Insurance Law. The court held that such state taxation was unconstitutional as it interfered with federal governmental functions and violated principles of intergovernmental tax immunity. This decision reinforced the doctrine that states cannot directly tax the Federal Government or those with whom it does business.

In the dissenting opinion for Joseph, Comptroller, et al. v. Carter & Weekes Stevedoring Co., Justice Frankfurter disagreed with the majority's interpretation of New York state law and its application to this case. He argued that the state had a legitimate interest in regulating businesses within its borders and ensuring they were financially capable of meeting their obligations under workers' compensation laws. The justice believed that requiring stevedoring companies to maintain certain financial reserves was not an unreasonable burden on interstate commerce but rather a necessary measure to protect injured workers and ensure they received due compensation. Furthermore, he contended that it was inappropriate for federal courts to interfere in matters related primarily to state law unless there was clear evidence of constitutional violation or conflict with federal statutes.