In the case of State of Louisiana v. McAdoo, Secretary of the Treasury in 1913, the state of Louisiana sued William G. McAdoo, who was then serving as U.S. Secretary of the Treasury under President Woodrow Wilson. The lawsuit centered around a dispute over sugar tariff regulations and their impact on local industries in Louisiana. The Supreme Court ruled against Louisiana's claim that it had been unfairly treated by federal policies which favored beet sugar producers over cane sugar producers (which were more prevalent in Louisiana). In its decision, the court held that it did not have jurisdiction to interfere with executive decisions regarding tariffs unless there was clear evidence showing abuse or misuse of power by those implementing such policies.

In the dissenting opinion for the case of State of Louisiana v. McAdoo, Secretary of Treasury, Justice Holmes disagreed with the majority's decision to dismiss Louisiana's claim against a federal official over alleged misuse of public funds. He argued that while it was true that courts should not interfere in political questions or disputes between states and federal officials, this principle did not apply when there were clear legal rights at stake. In his view, if a state could show that its rights had been violated by an unlawful act committed by a federal officer - as Louisiana claimed in this case - then it should be allowed to bring suit to protect those rights. Therefore, he would have allowed Louisiana's lawsuit against Secretary McAdoo to proceed.