In Levin v. Mississippi River Fuel Corp., the Supreme Court of the United States was asked to consider whether a stockholder could bring a derivative suit on behalf of a corporation in federal court, even though state law required that such suits be brought only by holders of at least 5% of the company's shares. The plaintiff, Levin, held less than this percentage and had been denied standing to sue in state court as a result. However, he argued that these restrictions violated his rights under federal diversity jurisdiction rules which allow citizens from different states to litigate disputes in federal courts regardless of their nature or size. The Supreme Court ruled against Levin finding that there was no conflict between state law and federal diversity jurisdiction rules because both were designed with similar objectives: preventing frivolous litigation and protecting corporations from harassment by minority shareholders. Therefore, it upheld the dismissal of his case for lack thereof sufficient shareholding according to Missouri laws where Mississippi River Fuel Corp was incorporated.

In the dissenting opinion for Levin v. Mississippi River Fuel Corp., Justice Douglas argued that the Court's decision to uphold a state law allowing corporations to avoid paying taxes on income earned from federal securities was misguided and inconsistent with previous rulings. He contended that this ruling effectively allowed states to discriminate against federal bonds by taxing them indirectly through corporate shareholders, undermining their value in comparison with untaxed state bonds. Furthermore, he pointed out that such discrimination could potentially disrupt the national economy by discouraging investment in federal securities. In his view, it was essential for all levels of government to respect each other's sovereign rights and not interfere with their financial operations; thus, he believed that states should be prohibited from imposing any form of tax on income derived from federal securities.